Profits at eBay are going, going, gone through the roof

In the past three months, it made a record $291.6 million (166 million), up from $190.4 million for the same period last year. The US company, which allows people to bid for items as diverse as cars, castles and karaoke machines over the internet, also reported revenues up 40 per cent to $1.09 billion, exceeding its original forecasts of $1.04 billion.

The number of worldwide users who had either bid, bought or listed an item on the eBay site during the three months was 64.6 million, compared with 48 million during the same quarter last year.

Meg Whitman, the president and chief executive of eBay, which celebrates its tenth anniversary this year, said they were "remarkable results" and highlighted "excellent momentum in the US and Germany".

The rise in profits was welcome news for a company that has endured mixed fortunes in recent months.

Last month, eBay was criticised by Bob Geldof after it was revealed the firm had permitted the trading of tickets for the Live 8 charity concert in Hyde Park. After initially defending the sale of the tickets, Rick McCallum, the company's UK managing director, was forced to withdraw them and issue an apology.

And eBay's share price has dropped by 40 per cent since January, wiping $30 billion from the company's market value.

David Edwards, an analyst at American Technology Research, said: "There has been a lot of debate about eBay. It certainly has been the most controversial of the large internet stocks. Obviously, some pressure has been lifted with this report."

The drop in share prices began after eBay unveiled disappointing quarterly results at the start of the year. It has also been criticised for raising the charges for its sellers and failing to clamp down on so-called "mischief makers" who post fake goods or win bids then refuse to pay.

In Britain, however, the eBay phenomenon continues to grow apace. The company has 10 million registered users, with 600,000 new ones joining each month after a series of television adverts. In December 2001, two months after the UK edition was launched, there were only one million users.

Today, eBay UK is so successful that an estimated 10,000 people make their livelihood, or a large percentage of it, through trading on the website. This has attracted the attention of the Inland Revenue, which has previously ignored small sales of personal property through the internet, but last year officials visited the company's UK headquarters in Richmond-Upon-Thames. The company has since said it will be posting a link to the Inland Revenue's website to encourage traders to declare taxable earnings.

The UK company has also introduced an eBay Business Centre to persuade small and medium-sized businesses to register with the company and set up an eBay shop. Azita Qadri, of eBay, said: "It's a ready-made solution for a business to sell online. By trading on eBay, businesses have access to 10 million potential buyers in the UK."