Shares in online auction house eBay fell 12% in after-hours trade on Wednesday, after its quarterly profits failed to meet market expectations.
Profits were up but Wall Street had hoped for more
Despite seeing net profits rise by 44% to $205.4m (£110m) during October to December, from $142m a year earlier, Wall Street had expected more.
EBay stock fell to $91.01 in late trade, from a $103.05 close on Nasdaq.
Its net revenues for the quarter rose to $935.8m from $648.4m, boosted by growth at its PayPal payment service.
Excluding special items, eBay's profit was 33 cents a share, but analysts had expected 34 cents.
"I think Wall Street has gotten a bit ahead of eBay this quarter and for the 2005 year," said Martin Pyykkonen, an analyst at Janco Partners.
For 2004 as a whole, eBay earned $778.2m on sales of $3.27bn.
EBay president and chief executive Meg Whitman called 2004 an "outstanding success" that generated "tremendous momentum" for 2005.
"I'm more confident than ever that the decisions and investments we're making today will ensure a bright future for the company and our community of users around the world," she said.
EBay was founded in the US in 1995 and started business in Europe, including the UK, in 1999.
It plans to increase investment from $200m to $300m in 2005, focusing on key areas such as China and its internet payment system PayPal.
It plans to invest $100m, or 2%, of its expected global revenue in China in 2005.
EBay has already been in China for three years, having paid $30m for a 33% stake in Shanghai-based EachNet.
1995 Set up in by Pierre Omidyar, although it is a myth that he did so because his wife, an avid Pez sweet dispenser collector, wanted to trade with other collectors over the net
1995 Mr Omidyar sells his first item - his own broken laser pointer - for $14
1997 Meg Whitman joins eBay
1999 Sets up in the UK, Germany
1999 Site crashes for 22 hours
2000 Sets up in Japan
2001 Overtakes Amazon as the most visited e-commerce site
2002 Moves into China
2002 Buys online payment service PayPal
2002 Pulls out of Japan
2004 moves into South Korea and India, giving it a foothold in 29 international markets
EBay has not said when it expects to make money in China, where both competition and potential rewards are huge.
The online auction site's last attempt to crack a major Asian market ended when it pulled out of Japan in 2002.
It was widely perceived to have been slow off the mark and found itself losing market share to rival Yahoo's auction site.
"It's not a slam dunk that they're going to be as dominant in China" as they are in the United States, said Mr Pyykkonen.
And he questioned whether the US market was now saturated.
EBay now forecasts that its revenues in 2005 will be between $4.2bn and $4.35bn while earnings excluding items will be between $1.48 and $1.52 per share.
Analysts had previously estimated that eBay would achieve 2005 revenues of $4.37bn and earnings of $1.62 per share, excluding items.