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eBay Gives Investors 3 Billion Reasons to Cheer

While not flush with details, the online auction firm maps out how it will reach $3 billion in revenue.

SAN JOSE, Calif. -- Do you know what you're going to be doing in 2005?


(EBAY) - Get eBay Inc. Report

says it does: It will be

posting revenue of $3 billion. So said CEO Meg Whitman at the company's annual analyst day here, and investors liked her farsightedness, sending eBay's shares up 17%.

The analysts munching focaccia sandwiches at the

Silicon Valley Conference Center

certainly looked impressed as they passed their


pagers around midsession to watch eBay's shares heading higher. In contrast,

(AMZN) - Get, Inc. Report

could have used some of that mo. Its shares fell 8% on Wednesday, following its own analyst day Tuesday. The stock had run up recently, partly on the hope that Bezos & Co. would announce some super-duper initiative -- something along the lines of "we'll be profitable next quarter." That didn't happen.

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eBay, as management mentioned far more than once, is already profitable. And under the current capital-constrained conditions in the e-commerce market, that puts it in the catbird seat. With its main U.S. auction business extending its already-big lead on the auction businesses of Amazon and



, now it's time to take over the rest of the world. By the end of 2001, eBay will operate in 10 countries; by the end of 2005 (henceforth referred to as "the $3 billion year"), it will operate in 25 countries.

The strategy, according to Steve Westly, eBay's senior vice president of international operations, is, first, win Europe, expanding on its beachheads in Germany and the U.K. Its French and Italian sites will launch soon. Second, eBay needs to establish Asian beachheads -- its Japanese site currently lags Yahoo!'s. Partnerships, wireless applications and leverage from its other operations should help its Japanese site grow, Westly said.

eBay's head technology honcho, Maynard Webb, also announced the fourth-quarter launch of its API initiative, or applications program interface. That will let third parties license its site technology, opening it up a la


. Webb wouldn't give details about licensing fees. And the company talked up

, the person-to-person, fixed-price commerce site it acquired in July. Fixed-price sales may eventually be a bigger business than auctions, said Jeff Jordan, senior vice president of eBay's U.S. operations.

eBay wouldn't provide short-term earnings guidance, and it didn't lay out the specific assumptions that will let it meet its ambitious revenue target. What new initiatives will contribute to growth? What will API do for the top line? What about getting some extra money by selling ads to those 15 million-plus customers? Is


, eBay's automated payment system, going to be all that the company had hoped?

Lack of details didn't faze investors. On Wednesday, projecting a $3 billion year was reason enough to buy.