In EBay’s 2009 annual and fourth quarter earnings call the news was good. The marketplace giant increased revenue 16% from 2008, and successfully completed its $1.9 billion sale of 70 percent of Skype. The focus now will be on payments and marketplaces – i.e., PayPal and EBay, and the latter’s growing classifieds business. Several times the goals of becoming more customer focused and technology driven were mentioned.

John Donahoe, EBay’s president and CEO , called the PayPal quarter and annual results “terrific. For the first time total payment volume (TPV) exceeded $20 million in one quarter,” he told those of us on the call. PayPal now has 81 million active accounts, with annual revenue and TPV both exceeding EBay’s marketplace numbers. Donahoe said that merchants were realizing a higher conversion from shopper to buyer when PayPal was part of the payment option. In the U.S. PayPal’s market growth was ten times that of e-commerce numbers as a whole.

PayPal gets 40 percent of its trade volume from other countries, however, with cross-border trade accounting for 25 percent of TPV. In Japan, five leading gateways have signed PayPal agreements, and as the first major payment platform to open up to third-party developers, PayPal has signed up 12,000 of these developers. Some have already launched their new PayPal apps.

EBay itself has realized a 15 percent growth in its marketplace, with a year over year global increase in sold items of 11 percent. The Asia Pacific has realized the fastest growth, with growth merchandise volume (GMV) increasing nearly 50 percent over 2008. Exports from Chinese sellers doubled in Q409, and in Europe lower insertion fees to sellers almost doubled the number of live listings.

While plans for the U.S. marketplace will focus on making similar insertion fee changes, there is an obstacle here.

“One of the benefits we have in Europe,  particularly in Germany and the UK, is that we can clearly differentiate business sellers from consumer sellers,” said Donahoe, in response to an analyst’s question. ” We lowered insertion fees on fixed prices [the Buy it Now option, as opposed to auction bidding]. It allowed for a huge inflow from business sellers. Consumer sellers can do more in the auction format,  which seems to be a better way for them. In the U.S. we can’t mechanically differentiate so didn’t go to quite the extremes in insertion fee options – and we have more items.”

Top Seller Status was introduced on EBay, as was the Fashion Vault pilot in North America. The latter sold out popular items within hours of listings. The Top Seller Status is visible to all buyers. This tactic grew same-store sales by 10 percent in the U.S., 25 percent in Germany, and 35 percent in the UK.

“Sellers who deliver the very best experience on EBay and their consumers are benefiting,” said Donahoe.

Mobile is a big hit with EBay consumers, who’ve downloaded its smart phone and IPhone app seven million times. It produced $600 million GNP in 2009, an increase of more than 200 percent year over year.

“It’s fortunate for us that the engaging nature of EBay auctions can really be brought to the mobile space,” said Donahoe. “We intend to be all over it.  We don’t know how much of [mobile-enabled revenue] will be incremental or shift and we don’t care. You don’t see people necessarily doing all of the transaction on one device. They usually start on one and finish on another.” He gave the example of someone setting up their bid online and then standing in the supermarket check out line rebidding via their mobile phone.

Stubhub sales increased 50 percent YOY, and classifieds were up 20 percent, with Spain, France, Germany and Italy topping the classified revenue list. Bill Me Later realized gross sales of $673 million for Q4, and while its net charge-off increased slightly it was still better than the industry average,  EBay CFO Bob Swan told the audience.

Reminding us all of EBay’s March 2009 three-year growth plan, Donahoe said the firm is right on target to double PayPal revenue to $4-5 billion by 2011. Its objective of winning in a secondary market and growing adjacent markets such as classifieds is on track as well, with a goal of classified revenue at the same rate as e-commerce in 2010, and faster than e-commerce in 2011.

The plan for Bill Me Later is to integrate it into PayPal, leveraging their complements. Bill Me Later has a very strong merchant presence, while PayPal is used most by SMBs. Product integration launched in Q4, with another product launch planned for 2010.  “We now can offer our consumers more choices at a relatively low transaction expense,” said Swan. “We feel very good about its continued presence with merchants domestically.”

EBay’s take rate has changed drastically since Donahoe took the helm two years ago. “When I took over 24 months ago we had one take rate for all sellers all over the world,” he said. “So, we set out in what would be a three to four year process to make changes that would better align ourselves with our seller and make a robust marketplace.” Now pricing is category-based, and significant changes have been made in rebalancing front and back-end fees. What had been a 70:30 ratio of Buy it Now versus auction has changed to roughly 30:70. This is what Donahoe called aligning EBay incentives with that of the sellers, so that if sellers don’t succeed, EBay doesn’t either. Now, those sellers who offer the best incentives to buyers get the lowest rate from EBay.

The expectation by company executives is that consumers will increasingly choose Bill Me Later as a payment option, and its percentage of payment options will increase, though it’s still going to be a small percent of total PayPal volume. The credit decisions are going to remain strict to keep charge-offs relatively low, however.

What never came up on the call was the pending court decision of EBay’s Delaware Chancery Court case against Craigslist, and how this might affect revenue or practices going forward. For more on this story, see our latest post of many on the subject.

EBay ended the fourth quarter of 2009 with revenue of $2.4 billion. Here’s the complete earnings release.