EBay To Double PayPal Revenue To $7B By 2013

SAN JOSE, Calif. (AP) - EBay Inc. shares hit their highest point in more than three years on Thursday after the online marketplace operator said it will double revenue from its PayPal online payment service by 2013.

EBay is forecasting total revenue between $13 billion and $15 billion in 2013, which would mark an increase of 41 to 63 percent from the $9.2 billion in revenue it reported in 2010. The company forecast 2011 revenue of $10.3 billion to $10.6 billion in January.

Of its expected 2013 total, eBay predicted that PayPal's revenue will make up $6 billion to $7 billion in 2013; compared with the $3.4 billion it contributed last year. This business has grown rapidly as more people use it to make purchases on and off eBay and exchange funds. If it grows as forecast, that will make PayPal nearly as big a business as eBay's marketplaces business, which includes the core eBay.com website, and possibly bigger.

The company said it expects the marketplaces business, which has traditionally been its largest unit, to generate $7 billion to $8 billion in revenue in 2013. EBay CEO John Donahoe has said he thinks PayPal will surpass the marketplaces business in revenue within a few years simply because PayPal targets all of e-commerce while eBay is one of many online sales sites.

Shares of the San Jose, Calif.-based company rose $2.54, or 8 percent, to close at $34.49 on more than double average trading volume. Earlier they climbed as high as $34.78, their highest point since September 2007.