eBay 1999 Annual Report Download - page 64

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accept credit cards as payment for Internet-based sales transactions. Billpoint’s service is now being made
available to the Company’s users, providing the ability to accept credit cards for payment.
In connection with the acquisition, eBay issued 524,132 shares of eBay common stock to the existing
Billpoint shareholders as consideration for all shares of capital stock, and all options and warrants to purchase
shares of common stock of Billpoint outstanding immediately prior to the consummation of the merger were
converted into options and warrants to purchase shares of eBay common stock. The acquisition has been
accounted for as a pooling of interests.
The components of net revenues, operating expenses and net income (loss) during the years ended
December 31, 1996, 1997 and 1998 are as follows (in thousands):
Net
Revenues Operating
Expenses Net Income
(Loss)
Year Ended December 31, 1996
Kruse .......................................... $ 7,760 $ 6,024 $ (69)
B&B........................................... 23,919 12,699 3,259
$31,679 $18,723 $3,190
Year Ended December 31, 1997
Kruse .......................................... $ 7,520 $ 5,895 $ (237)
B&B........................................... 28,106 13,577 6,424
$35,626 $19,472 $6,187
Year Ended December 31, 1998
Kruse .......................................... $10,265 $ 8,119 $ (58)
Billpoint ........................................ — 74 (74)
B&B........................................... 28,512 14,745 5,007
$38,777 $22,938 $4,875
alando.de.ag
On June 15, 1999, eBay acquired all of the outstanding stock of alando.de.ag (‘‘alando’’). alando began
operations on February 19, 1999 and is Germany’s leading online personal trading community. The aggregate
consideration exchanged for the acquisition was 316,000 shares of eBay common stock. The acquisition has been
accounted for as a pooling of interests.
Note 4—Segment Information:
Effective January 1, 1998, the Company adopted the provisions of SFAS No. 131, ‘‘Disclosures about
Segments of an Enterprise and Related Information.’’ SFAS No. 131 establishes the standards for reporting
information about operating segments in annual financial statements and requires that certain selected
information about operating segments be reported in interim financial reports. It also establishes standards for
related disclosures about products and services and geographic areas. Operating segments are defined as
components of an enterprise about which separate financial information is evaluated regularly by the chief
decision-maker in order to allocate resources and in assessing performance.
eBay has identified two primary operating segments: online trading services and offline, traditional auction
services. The online trading services segment consists of the operations of eBay, Billpoint and alando. The
offline, traditional auction segment consists of the current operations of B&B and Kruse.
eBAY INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
59