This was the year when discussions about eBay (EBAY) stopped veering toward selling junk from grandma’s attic or bidding on a charity lunch with Warren Buffett.

For finally proving that it is a balanced e-commerce and payments leader, enriching shareholders with prudent capital usage and pushing innovation in mobile commerce, eBay earned runner-up status to Bay Area neighbor Gap Inc. (GPS) as the Yahoo! Finance “Company of the Year” for 2012.

On the upswing for years under the steady strategic guidance of CEO John Donahoe, eBay in 2012 at last won the respect it deserves as a dominant player in online commerce and electronic payments and no longer a gimmicky virtual yard sale for haggling over stray goods and one-off experiences.

Related: Gap Named Yahoo Finance’s “Company of the Year”

Smart Operator

The stock market has awakened to eBay’s world-class assets and strong business execution. Its shares have rocketed about 70% in 2012 to a recent $51.34, easily outpacing the also-heady 50% gain in Amazon.com (AMZN).

In the first nine months of 2012, eBay’s revenue rose 22%, net income climbed 33% and operating earnings per share surged 49%, propelled by 20%-plus organic growth in by its category-killing PayPal transaction processor and steady increases in merchandise sold in its core marketplace business.

eBay has continued to grow its customer count, revenue and profits at impressive rates for a $66 billion market-capitalization company. From January through September alone, the number of registered PayPal users rose more than 10% to 117 million, which is 30% more than two years earlier. For the first time, PayPal users exceed Marketplace account holders, even as they grew 7% from Dec. 31.

Meantime, PayPal has been hustling to become a leader in the “mobile wallet” race, allowing shoppers at Home Depot (HD), for instance, to pay at the register via a secure PayPal account, with credit-card numbers never in transit, using only their mobile-phone number.

Source: FactSet, Yahoo! Finance, SEC filings, eBay Inc. *Founder Pierre M. Omidyar, the chairman, is counted here as a non-independent.

Donahoe, who arrived in 2008, has raised the corporate metabolism and morale at eBay, laying out a vision of the company as simply a global commerce platform, matching buyers and sellers in the most convenient and efficient ways. He early on vowed to increase the percentage of Marketplace sales at a fixed price, rather than via auctions, by cutting deals with major retailers and favoring top-ranked large sellers. While hobbyists and small sellers squawked, the strategy has paid off. Last quarter, two-thirds of Marketplace gross merchandise volume was at a fixed price, a more stable business model that works better for a broader pool of customers.

Related: Company of the Year: The Other Contenders

Our "Company of the Year" award takes in a variety of factors, including but not limited to financial performance. Corporate governance, shareholder rights, community service and employee satisfaction also helped put eBay in the running.

Just Missed

eBay appeared on Fortune magazine’s 100 Best Companies to Work For rankings, while three of its executives landed on the latest Silicon Valley “40 Under 40” list. The eBay Foundation is the first corporate philanthropic effort endowed with pre-IPO stock and has given more than $20 million in support of promoting economic opportunity, such as through microfinance grants.

eBay has also proven itself a shrewd player of the M&A game. The company cut loose Skype a couple of years ago for its lack of relevance to the rest of the business. But it has acquired complementary businesses such as ticket market StubHub, online payment utility Bill Me Later and GSI Commerce, an operator of online outlets for physical retailers. Separately, the company is quite transparent in sharing its crucial business metrics so that investors can track its performance clearly over time.

There are some legitimate quibbles with eBay that counted against it in the “Company of the Year” competition. Notably, this pick was about 2012, not the last five years and not the next five. The past year was a continuation of a multiyear turnaround at eBay vs. a truly remarkable turnaround at Gap.

In addition, despite fat profit margins, ample cash flow and more than $10 billion in cash on its books, eBay pays no regular dividend. That cash pile, too, mostly resides overseas, a result of the company routing profits through foreign locales and its refusal to bring it home, which would trigger tax expenses.

Yet these shortcomings are relatively modest -- and easily remedied -- compared to eBay’s impressive achievements this year, which finally got most everyone to start taking the company seriously.