European web auction house QXL.com Plc saw its share price rise 16.6% yesterday after reporting encouraging user growth over its first quarter as a listed company, as well as an extension of its marketing partnership with AOL Europe. The London-based firm reported a loss of 11.7m pounds ($18.9m), compared to a loss of 300,000 pounds ($486,000) in the year ago quarter, on revenue up 269% at 1.9m pounds ($3.1m).
It said that the number of ‘registered users’ rose to 246,000 in the quarter. However, this number includes emailing list subscribers as well as those users who have parted with credit card details. The total number of members was 130,000 on September 30, and 160,000 on October 31, following a UK marketing campaign and the opening of a Dutch site at QXL.nl. In a market where subscriber growth is often more attractive to investors than financial figures, this was enough to push QXLÆs share price up.
QXL currently offers its consumer-to-consumer auctions free of charge, but says it will start charging a percentage of the sale price by the end of the year. Stan Laurent, marketing director at the firm, says he does not anticipate subscriber numbers to drop when this happens. QXL never closes customer accounts, so it is impossible to tell how many users are ‘active’ and determine a churn-rate.
QXL also extended its relationship with AOL Europe, the internet service provider joint venture of America Online Inc and Bertelsmann AG into Germany with AOL Deutschland GmbH. Following similar deals in the UK and France, AOL will give QXL access to editorial content, with AOL-special deals being offered to subscribers in return for QXL buying banner space on aol.de sites. This deal would seem to be dependant on AOL not following the lead of many of its competitors such as Yahoo Inc and Freeserve Plc and launching its own auction site at some point.
