eBay warning of tough Christmas

Online auction site eBay has reported robust profits but warned that the slowing economy will hurt its business.

The firm's net profit was $492m (£286m)in the third quarter, after a loss of $936m in same period a year earlier.

Hard-up consumers are already reducing online purchases and this will affect the normally strong Christmas period, eBay said.

Besides its main auction site, eBay also runs internet call service Skype and web payments service Paypal.

"There is a high degree of economic uncertainty and turmoil in the business market and this is impacting consumer spending," said John Donahoe, the firm's chief executive.

Revenue rose 12% to $2.12bn in the quarter, slightly lower than analysts had anticipated.

EBay now expects 2008 revenues to total between $8.53bn and $8.68bn - below a previous estimate of $8.8bn to $9.05bn.

Meanwhile, in a further sign that retailers are expecting a tougher Christmas trading environment, online bookseller Amazon has cut its postage charges in the UK.

The amount customers have to spend to qualify for free delivery has been cut from £15 to £5.

"This means that UK customers can get over 90% of what Amazon sells delivered for free," said Brian McBride, from Amazon UK.

RELATED INTERNET LINKS
Ebay
The BBC is not responsible for the content of external internet sites