eBay forecasts its main Marketplaces business will see just 0%-5% revenue growth in both 2015 and 2016. This was below the Street's forecast of 5.2% growth in 2015, according to Piper Jaffray analyst Gene Munster.
The company attributed the weak growth to a change in Google's (GOOGL) algorithm that hurt eBay's visibility in search results, as well as a hacking incident that forced a total password reset for buyers. Share were recently down 3.2%.
eBay's first-quarter earnings were largely propped up by PayPal, with PayPal revenue surpassing Marketplaces revenue for the first time ever. Gross merchandise volume for eBay's Marketplace business declined 2%. The last time Marketplace sales fell was in the third quarter of 2009, after the financial crisis.
On top of that, eBay is growing much more slowly than the e-commerce industry as a whole. In April, eBay's same-store sales grew 5.8%, according to ChannelAdvisor, compared to a rate of 15% for the e-commerce industry overall, according to ComScore results. Amazon (AMZN) same-store sales rose 22.6% for the month, according to ChannelAdvisor.
These numbers pose some looming questions for eBay as it prepares to sever its ties with PayPal in the third quarter.
"It's going to be an uphill battle for them," Piper Jaffray's Munster said. "For every one step forward for eBay, Amazon's doing three steps. Bottom line is Marketplace is currently growing below e-commerce. They attribute that to the Google algorithm change. We think that played some part, but a bigger part has been natural, related to their brand and indexing."