Just months after a cyberattack eBay's CEO is saying data wasn't the only victim. The incident has left a negative impact on a vital business component, John Donahoe says.
"The focus is now on recovery," said Donahoe, and a big part is trying to lure new users.
The announcement regarding financial impact came during eBay's second quarter earnings call. The San Jose, Calif., company said it has struggled since the event, which the company described as a "challenge."
That could be an understatement. PayPal chief David Marcus left the company during the debacle. PayPal is owned by eBay and some investors have lobbied to separate the two companies. Donahoe referred to the Marcus leaving as a "body blow."
Yet company earnings hit expectations, with $4.37 billion in second quarter revenue, up 13 percent over a year. The company reportedly predicted between $4.33 billion and $4.43 billion.
Furthermore, earnings actually exceeded analysts' expectations, totalling $868 million, or about 69 cents per share. That represents a 6 percent spike.
What eBay is struggling with, states a source, is attracting new users. It may be an uphill battle for a while.
Hackers had gained access to login information, a big problem for a company that stores financial data on behalf of users.
Overall, eBay's stock has sunk by 7.6 percent over the year. Sales in eBay's PayPal expanded 20 percent, however, it was reported.
One report noted Donahoe's analysis of the situation.
All eBay users, approximately 145 million, were advised to change passwords in May after the cyberattack. According to Donahue, only 85 percent of users have changed their passwords since the breach. But further telling is that account activity, even among those who made password changes, has decreased since the attack.
The online auction company earns revenue through charging listing fees on its users' auctions. Less account activity means lower listings fees and, therefore, less revenue for eBay.
The company was also widely criticized for how it handled the attack and the aftermath. Security experts questioned why there was so little email communication about the breach to users. Others say the password reset initiative was poorly implemented.
