EBAY Company apologizes for glitch in service

EBay says it has its best people fixing the problems with PayPal.
SAN FRANCISCO (AP) -- Executives at eBay Inc. apologized to frustrated customers who were frozen out of the online auction giant's payment transaction service, which experienced at least five days of intermittent outages earlier this month.
The mea culpas came as eBay reported sizzling earnings, nearly doubling from the previous year, as revenue also soared.
The company's highest-ranking executives emphasized Wednesday that technical glitches wouldn't dent the company's lofty profits, and eventually the popular PayPal service would be more reliable, faster and "scalable" so it would be able to handle more than its current 56.7 million user accounts.
"We let our community down, and I want to apologize to our users who were affected by these issues," chief executive Meg Whitman said in a conference call with investors.
Whitman promised the PayPal service would remain "robust," particularly during the holiday shopping season, when tens of thousands of small businesses rely on the e-commerce giant to reach customers.
PayPal's total transaction volume was $4.6 billion in the quarter that ended Sept. 30, up 52 percent from the same period last year.
Upgrades
PayPal began faltering early last week, after programmers tried to install sweeping software upgrades.
The computer code behind PayPal, which lets online shoppers and sellers who don't know each other make secure credit card or bank account payments between each other, has relied on the same software architecture since its founding in 1999, said eBay chief financial officer Rajiv Dutta.
When the upgrades didn't go as smoothly as technicians hoped, customers received error messages or online notices saying the site was temporarily down and asking them to return later.
"There's no question that we probably had some customers who weren't able to transact using PayPal," Dutta said Wednesday in an interview. "The good news is that we absolutely understand the issues, we have the best people on this and it will not impact the fourth quarter. We hate when these things happen, and we apologize to our community for it."
Earnings
Company officials said they remain optimistic about the fourth quarter and reported strong sales during the recent back-to-school shopping season. Third-quarter profit squeaked past Wall Street's expectations and jumped more than 76 percent.
On Wednesday, the company announced third-quarter earnings of $182.35 million, or 27 cents per share, compared with $103.25 million, or 16 cents per share in the same period of 2003.
Excluding special items, eBay earned $194.97 million, or 28 cents per share, up from $118.33 million, or 18 cents per share, in the third quarter of 2003.
Analysts expected San Jose, Calif.-based eBay to earn 27 cents per share, excluding special items, on sales of $779.74 million.
For the three months ended Sept. 30, the company reported revenue of $805.88 million, up 52 percent from the same period last year.