eBay 2001 Annual Report Download

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IBM (1158)
2001
annual
report
[email protected] (69411)

Table of contents

  • Page 1
    ...(110) 1) thenetgearstore (988) prince_fantastic (111) 16736) 805) allof (1591) spo kaytun zeeayen ( (115) wizaa kellybeans (200) 2001 annual report 492) 1552) oka anyt finderscheapers (1443) 69411) parrothead88 (28397) 6) all-of-fame-sports (5653) misskim llwall.com (35262) IBM (1158)

  • Page 2
    .... Early on, we felt that eBay could become a global trading platform, connecting people from all over the globe. Today, eBay and its aÇliates operate web sites that serve 27 markets around the world, and eBay is available to more than 500 million Internet users worldwide. More importantly, in the...

  • Page 3
    ... market, the eBay economy is shaped by its millions of customers who instantly act on changes in economic conditions and trading trends every day, expanding the business across geographies, categories, buying formats, types of users and services. As the manager of this global marketplace, our job...

  • Page 4
    ... As always, we want to express our sincere gratitude to eBay's stockholders, partners, and employees for their support. A special thanks goes to the eBay user community, whose tremendous dedication and innovation have helped make eBay the world's marketplace. We never lose sight of the fact that our...

  • Page 5
    .... Commission Ã'le number 000-24821 eBay Inc. (Exact name of registrant as speciÃ'ed in its charter) Delaware (State or other jurisdiction of incorporation or organization) 77-0430924 (I.R.S. Employer IdentiÃ'cation Number) 2145 Hamilton Avenue San Jose, California (Address of principal executive...

  • Page 6
    ... or premium art items, jewelry, consumer electronics and a host of practical and miscellaneous items. The eBay trading platform is a fully automated, topically arranged, intuitive, and easy-to-use service that supports an auction format in which sellers list items for sale and buyers bid on items of...

  • Page 7
    ... Online Trading Opportunity Our online trading platform has historically oÃ...ered the exchange of goods among buyers and sellers of traditional types, competing with classiÃ'ed advertisements, collectibles shows, garage sales, Ã-ea markets and other venues such as auction houses. As our service has...

  • Page 8
    ...& Bears DVDs & Movies Hobbies & Crafts Home & Garden Jewelry, Gems, Watches Motorcycles Music Musical Instruments Networking & I.T. PDAs Pottery & Glass Real Estate, Timeshares Sporting Goods Sports Memorabilia Stamps Tickets Tools Toys Travel TV Video Games Everything Else New Categories Specialty...

  • Page 9
    ...-use online service that is available on a 24 hours-a-day, seven-days-a-week basis that enables sellers to list items for sale in either auction or fixed-price formats, buyers to bid for and/or purchase items of interest, and all eBay users to browse through listed items from any place in the world...

  • Page 10
    ... at least 60 days. A seller may also specify that an auction will be a private auction. With this format, bidders' email addresses are not disclosed on the item screen or bidding history screen. Sellers generally pay a nominal listing fee to list items for sale. By paying incremental placement fees...

  • Page 11
    ...Before bidding on items listed for sale, eBay users are encouraged to review a seller's feedback proÃ'le to check their reputation within the eBay community. The terms of our user agreement prohibit actions that would undermine the integrity of the Feedback Forum, such as a person's leaving positive...

  • Page 12
    ... provides users the opportunity to create their own personal home page free of charge on eBay using step-by-step instructions. The About Me home page can include personal information, items listed for sale, eBay feedback ratings, images and links to other favorite sites. Customer Support We devote...

  • Page 13
    ... user registration information, billing accounts, current auctions and historical listings. All information is regularly archived for record-keeping and analysis purposes. The platform regularly updates a text-based search engine with the titles and descriptions of new items, as well as pricing...

  • Page 14
    ... improve search and listing functionality. This project is ongoing, with phased rollouts through 2003. We plan to time these rollouts in a way that minimizes the impact to our user community. Marketing Our marketing strategy is to promote our brand, attract new buyers and sellers to the eBay service...

  • Page 15
    ...we conduct business in order to limit access to and disclosure of our proprietary information. We aggressively protect our intellectual property rights by relying on a combination of trademark, copyright, patent, trade dress and trade secret laws and through the domain name dispute resolution system...

  • Page 16
    ... in the future, communications from users who did not receive the purchase price or the goods that were to have been exchanged. In some cases individuals have been arrested and convicted for fraudulent activities using our websites. While we can suspend the accounts of users who fail to fulÃ'll...

  • Page 17
    ...the seller's and winning bidder's name, email address and telephone number. We also disclose some personally identiÃ'able information to our subsidiaries and business partners in connection with the provision of services by these entities. We also will disclose customer information in our possession...

  • Page 18
    ... as licensure as an auto dealer or real estate broker. Several states have proposed legislation that would limit the uses of personal user information gathered online or require online services to establish privacy policies. The Federal Trade Commission has also settled several proceedings regarding...

  • Page 19
    ... a lawsuit, Gentry et.al. v. eBay, Inc. et.al, Ã'led in Superior Court in San Diego, California. The lawsuit was Ã'led on behalf of a purported class of eBay users who purchased allegedly forged autographed sports memorabilia on eBay. The lawsuit claims we were negligent in permitting certain named...

  • Page 20
    ...01-CV-736) alleging infringement of three patents (relating to online auction technology, multiple database searching, and electronic consignment systems) and seeking a permanent injunction and damages (including treble damages for willful infringement). We have answered this complaint, denying the...

  • Page 21
    PART II ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Price Range of Common Stock eBay's common stock has been traded on The Nasdaq Stock MarketSM under the symbol ""EBAY'' since September 24, 1998. The following table sets forth the high and low per share bid prices ...

  • Page 22
    ... Statement of Income Data: Net revenues Cost of net revenues Gross proÃ't Operating expenses: Sales and marketing Product development General and administrative Payroll expense on employee stock options Amortization of acquired intangible assetsÏÏ Merger related costs Total operating...

  • Page 23
    ... service permits sellers to list items for sale, buyers to bid on items of interest and all eBay users to browse through listed items in a fully-automated, topically-arranged, intuitive and easy-to-use online service that is available 24 hours-a-day, seven-days-a-week. Critical Accounting Policies...

  • Page 24
    ... condition of our customers and by the success of online promotions in general. Recently, the industry pricing of online advertisements has deteriorated. Our third-party advertising revenue is dependent in signiÃ'cant part on the performance of AOL Time Warner, Inc.'s, or AOL's, sales force, over...

  • Page 25
    ... future quarters may fall below the expectations of securities analysts or investors. Although accurate revenue forecasts are diÇcult, we believe that our business is seasonal as many of our users reduce their activities on our website during the Thanksgiving (in the U.S.) and Christmas holidays...

  • Page 26
    ... provisions for doubtful accounts receivable and authorized customer credits, customer support, and Internet connectivity. Costs that allow signiÃ'cant discretion as to timing and amount include marketing and business development promotions, acquisition related costs and business expansion costs. As...

  • Page 27
    ..., 1999 2000 2001 Net revenues Cost of net revenues Gross proÃ't Operating expenses: Sales and marketing Product development General and administrative Payroll expense on employee stock options Amortization of acquired intangible assets Merger related costs Total operating expenses Income...

  • Page 28
    ...1 ÃŒ The Company and Summary of SigniÃ'cant Accounting Policies, Revenue Recognition to the Consolidated Financial Statements.'' OÉine revenue is derived from a variety of sources including seller commissions, buyer premiums, bidder registration fees and auction-related services including appraisal...

  • Page 29
    ... to our online business as we continued to develop and expand our customer support and site operations departments. The increases were primarily the result of personnel costs, depreciation of the equipment required for site operations, software licensing fees, Internet connectivity charges and...

  • Page 30
    ...user and promotional costs. Our online advertising eÃ...orts target the acquisition of registered users through promotional agreements with Internet portals and other online service providers, while our oÉine advertising is spent primarily on television and print media placements. Sales and marketing...

  • Page 31
    ...and a majority interest in Internet Auction, which were accounted for as purchase business combinations. See ""Note 3 Ì Acquisitions to the Consolidated Financial Statements.'' Intangible assets are comprised of purchased customer lists, developed technology, trademarks, other intangible assets and...

  • Page 32
    ... elimination of the pooling of interests method of accounting, merger-related costs in future periods will be capitalized as a component of the purchase price. Non-Operating Items Interest and Other Income, Net 1999 Interest and other income, net As a percentage of net revenues 23,833 11% Percent...

  • Page 33
    ...Ã't is recognized as a component of stockholders' equity. We have provided a valuation allowance on the deferred tax assets relating to these stock option deductions due to the uncertainties associated with our future stock price and the timing of employee stock option exercises. To the extent that...

  • Page 34
    ... majority interest in Internet Auction, a South Korean company. In July 2001, we purchased the outstanding 30% interest in eBay Japan that we did not... tax beneÃ'ts on the exercise of stock options, other non-cash charges and were partially oÃ...set by changes in assets and liabilities. Net cash used in...

  • Page 35
    software for the development of our new platform architecture. The remaining balance will be used primarily for computer equipment, furniture and Ã'xtures and leasehold improvements. On March 1, 2000, we entered into a Ã've-year lease for general oÇce facilities located in San Jose, California. ...

  • Page 36
    ..., we entered a four-year marketing agreement with The Walt Disney Company, or Disney, to provide us with online and oÉine advertising and promotions and develop a co-branded version of our online service. Subject to certain Disney performance obligations, we were obligated to pay a minimum of $30...

  • Page 37
    ... working capital adjustments. NeoCom provides an online Chinese language marketplace for the trading of goods and services for both individual and business customers in Taiwan. NeoCom's corporate oÇce is located in Taipei, Taiwan and the acquisition is expected to close in April 2002. In March 2002...

  • Page 38
    .... In October 2001, the FASB issued SFAS No. 144, ""Accounting for the Impairment or Disposal of Long-Lived Assets,'' that develops one accounting model for long-lived assets that are to be disposed of by sale and expands the scope of discontinued operations. This Statement is eÃ...ective for Ã'scal...

  • Page 39
    ...our product oÃ...erings involving Ã'xed-price trading successfully; ‚ the ability of our land-based auction businesses to acquire high quality properties for auction; ‚ the timing, cost and availability of advertising in traditional media and on other websites and online services; ‚ the cost and...

  • Page 40
    ... and developing our websites, customer support and international and product expansion; ‚ increase our brand name awareness; and ‚ provide our customers with superior community and trading experiences. We are investing heavily in marketing and promotion, customer support, further development of...

  • Page 41
    ..., a French company with online trading operations in eight countries, primarily in Europe. In February 2002, we announced the acquisition of NeoCom in Taiwan. Expansion into international markets requires management attention and resources. We have limited experience in localizing our service to...

  • Page 42
    ... diÇculties in collecting accounts receivable and risks relating to foreign currency exchange rate Ã-uctuations. Disputes between our Korean subsidiary, Internet Auction, and credit card companies may harm our operations in Korea. The credit card companies providing payment services to our majority...

  • Page 43
    ... relationships and market opportunities. Our business may be harmed by the listing or sale by our users of illegal items. The law relating to the liability of providers of online services for the activities of their users on their service is currently unsettled. We are aware that certain goods, such...

  • Page 44
    ... relating to the listing or sale of unlawful goods on our websites. This negative publicity could damage our reputation and diminish the value of our brand name. It also could make users reluctant to continue to use our services. Our business may be harmed by the listing or sale by our users...

  • Page 45
    ... auctions, thereby harming us. As our activities and the types of goods listed on our site expand, state regulatory agencies may claim that we are subject to licensure in their jurisdiction, either with respect to our services in general, or in order to sell certain types of goods (e.g., real estate...

  • Page 46
    ... to impose sales or use tax collection or record keeping obligations on companies such as ours that engage in or facilitate online commerce. Several proposals have been made at the state and local level that would impose additional taxes on the sale of goods and services through the Internet. These...

  • Page 47
    ... harm our business. We are subject to intellectual property and other litigation. On April 25, 2000, we were served with a lawsuit, Gentry et.al. v. eBay, Inc. et.al, Ã'led in Superior Court in San Diego, California. The lawsuit was Ã'led on behalf of a purported class of eBay users who purchased...

  • Page 48
    ... listed by users, the volume of user transactions that are successfully completed and the Ã'nal prices paid for the items listed. We need to expand and upgrade our technology, transaction processing systems and network infrastructure both to meet increased traÇc on our site and to implement new...

  • Page 49
    .... We expect that these data center assets, now owned by Cable and Wireless plc, will continue to be branded using the Exodus name. We do not maintain fully redundant systems or alternative providers of hosting services, and we do not carry business interruption insurance suÇcient to compensate us...

  • Page 50
    ... as licensure as an auto dealer or real estate broker. Several states have proposed legislation that would limit the uses of personal user information gathered online or require online services to establish privacy policies. The Federal Trade Commission also has settled several proceedings regarding...

  • Page 51
    ... websites require users to make publicly available personal information that some potential users may be unwilling to provide. These concerns may increase as additional publicity over privacy issues on eBay or generally over the Internet increase. Market acceptance for recently introduced services...

  • Page 52
    ... supply of high quality auction property, particularly Ã'ne and decorative arts and collectibles and collectible automobiles, respectively. There is intense competition for these pieces with other auction companies and dealers. In addition, a small number of key senior management and specialists...

  • Page 53
    ... or potentially compete with a number of companies serving particular categories of goods as well as those serving broader ranges of goods. The Internet provides new, rapidly evolving and intensely competitive channels for the sale of all types of goods. We expect competition to intensify in the...

  • Page 54
    ... have longer company operating histories, larger customer bases and greater brand recognition in other business and Internet spaces than we do. Some of these competitors also have signiÃ'cantly greater Ã'nancial, marketing, technical and other resources. Other online trading services may be...

  • Page 55
    ... its product categories such as Amazon.com, which oÃ...ers a directly competitive service, as well as with traditional oÉine and online sellers of new and used books, videos and CD's, consumer electronics, sporting goods and other products. The oÉine auction business is intensely competitive. Butter...

  • Page 56
    ...an unsuccessful attempt to promote and maintain our brand, our business would be harmed. We may be unable to protect or enforce our own intellectual property rights adequately. We regard the protection of our trademarks, copyrights, patents, domain names, trade dress and trade secrets as critical to...

  • Page 57
    ... property may not prevent misappropriation of our technology or deter independent third-party development of similar technologies. We pursue the registration of our domain names, trademarks and service marks in the U.S. and internationally. EÃ...ective trademark, copyright, patent, trade dress, trade...

  • Page 58
    ..., we maintain our portfolio of cash equivalents, short-term and long-term investments in a variety of securities, including government and corporate obligations and money market funds. These securities are generally classiÃ'ed as available for sale and consequently are recorded on the balance sheet...

  • Page 59
    ... oÃ...set one another. As of December 31, 2001, the fair value of the forward contract was immaterial. ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Annual Financial Statements: See Part IV, Item 14(a)(1) of this Annual Report on Form 10-K. ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS...

  • Page 60
    ...reference to the Proxy Statement for our 2002 Annual Meeting of Stockholders to be Ã'led on or before April 30, 2002. ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Incorporated by reference to the Proxy Statement for our 2002 Annual Meeting of Stockholders to be Ã'led on or...

  • Page 61
    .... San Jose, CA 95125 (408) 376-7400 In addition, the Securities and Exchange Commission maintains a website that provides access to all Ã'lings made electronically by eBay at www.sec.gov. eBay's website is located at www.ebay.com. Information contained on eBay's website is not a part of this Annual...

  • Page 62
    ...Option Plan.(3) Registrant's Amended and Restated 1998 Employee Stock Purchase Plan. FILED HEREWITH. Registrant's 1999 Global Equity Incentive Plan.(8) Employment Letter Agreement dated January 16, 1998, between Margaret C. Whitman and Registrant.(1) Employment Letter Agreement dated August 14, 1998...

  • Page 63
    ... 8-K on October 29, 2001, setting forth the press release issued in connection with a presentation to our analysts and updating the risk factors aÃ...ecting our business, Ã'nancial condition, results of operations and cash Ã-ows. (c) See the Exhibits listed under Item 14(a)(3) above. (d) The Ã'nancial...

  • Page 64
    ... statements, assessing the accounting principles used and signiÃ'cant estimates made by management, and evaluating the overall Ã'nancial statement presentation. We believe that our audits provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP San Jose, California January 15, 2002...

  • Page 65
    ...678,529 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued expenses and other current liabilities Deferred revenue and customer advances Short-term debt Income taxes payable Total current liabilities Long-term debt Other liabilities Minority interests Total...

  • Page 66
    ..., 1999 2000 2001 Net revenues Cost of net revenues Gross proÃ't Operating expenses: Sales and marketing Product development General and administrative Payroll expense on employee stock options Amortization of acquired intangible assets Merger related costs Total operating expenses Income...

  • Page 67
    ... income Unrealized losses on cash Ã-ow hedges Estimated tax beneÃ't (provision Net change in other comprehensive income (loss) before cumulative eÃ...ect of change in accounting principle Cumulative eÃ...ect of change in accounting principle Comprehensive income $ 9,567 (58) 8,883 ÃŒ ÃŒ (3,731...

  • Page 68
    ... paid-in-capital: Balance, beginning of year Common stock issued Common stock repurchased Contributions from partners and minority interest Unearned stock-based compensation Tax beneÃ't related to acquisitions Stock option income tax beneÃ't Balance, end of year Notes receivable from...

  • Page 69
    ... equity investments Minority interests and other Changes in assets and liabilities, net of acquired businesses: Accounts receivable Other current assets Intangible and other assets Deferred tax assets Accounts payable Accrued expenses and other liabilities Deferred revenue and customer...

  • Page 70
    ..., New Zealand, Singapore, South Korea, Spain, Sweden, Switzerland and the United Kingdom. We pioneered online trading by developing a Web-based community in which buyers and sellers are brought together to buy and sell almost anything. The eBay online service permits sellers to list items for sale...

  • Page 71
    ...because of the short-term maturity of these instruments. Short and long-term investments, which include marketable equity securities, municipal, government and corporate bonds are classiÃ'ed as available-for-sale and reported at fair value using the speciÃ'c identiÃ'cation method. Realized gains and...

  • Page 72
    ... assets Intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are estimated by management based on the fair value of assets received. Intangible assets include acquired customer lists, workforce, technological know how, covenants not...

  • Page 73
    ... condition of our customers and by the success of online promotions in general. Recently, the industry pricing of online advertisements has deteriorated. Our third-party advertising revenue is dependent in signiÃ'cant part on the performance of AOL Time Warner, Inc.'s (""AOL'') sales force, over...

  • Page 74
    ... the fair value of eBay's stock and the exercise price. We account for stockbased arrangements issued to non-employees based on the fair value of the stock granted using the BlackScholes option pricing model at the date of grant. Income taxes We account for income taxes using an asset and liability...

  • Page 75
    ... the method of accounting used in previous business combinations accounted for under the pooling-of-interest method. In...Accounting for the Impairment or Disposal of Long-Lived Assets,'' that develops one accounting model for long-lived assets that are to be disposed of by sale and expands the scope...

  • Page 76
    .... The Kruse Companies conduct auctions and perform appraisal services. The aggregate consideration exchanged for the acquisition was 1,574,624 shares of eBay common stock for all shares of capital stock of the Kruse Companies. The acquisition was accounted for as a pooling of interests. Billpoint...

  • Page 77
    ...and is the largest auction house headquartered on the West coast specializing in Ã'ne art, antiques and collectibles with sales galleries in San Francisco and Los Angeles and representatives located throughout the Midwest and Western U.S. ButterÃ'eld's Credit Corporation, Inc. (""BCCI'') is a wholly...

  • Page 78
    ...company for $120.8 million in cash and incurred $1.1 million of direct acquisition costs. Internet Auction introduced online trading in Korea when it launched in April 1998. Shares of Internet Auction are listed on the KOSDAQ. The transaction was accounted for using the purchase method of accounting...

  • Page 79
    ... in MercadoLibre. We accounted for this investment in MercadoLibre using the cost method, and no gain or loss was recognized on the exchange. Pro forma Ã'nancial information The following unaudited pro forma Ã'nancial information presents the combined results of eBay, Internet Auction and iBazar as...

  • Page 80
    ... had eBay, Internet Auction and iBazar constituted a consolidated entity during such periods. See ""Note 1 ÃŒThe Company and Summary of SigniÃ'cant Accounting Policies, Recent Accounting Pronouncements.'' Note 4 ÃŒ Segment Information: We have identiÃ'ed two reporting segments: online services and...

  • Page 81
    ...,909 $1,182,403 Online Net revenues from external customers Operating income (loss), as adjusted Interest and other income and expense, net Impairment of certain equity investments Interest expense Amortization of certain non-cash items Income (loss) before income taxes and minority interest...

  • Page 82
    ... (in thousands): Gross Amortized Cost Short-term investments: Municipal bonds and notes Corporate securities Government securities Total Long-term investments: Restricted cash and investments Municipal bonds and notes Government securities Equity instruments Total 112,488 21,193 219,674...

  • Page 83
    ... in accounting method relating to the interest rate swaps was an immaterial gain on net income and an unrealized loss, net of tax, of approximately $2.6 million on other comprehensive income. During the year ended December 31, 2001, the derivative losses reclassiÃ'ed into rent expense were oÃ...set by...

  • Page 84
    ...Property and equipment, net: Land and buildings, including building improvements Computer equipment and software Leasehold improvements Furniture and Ã'xtures Vehicles... $9.4 million and $6.7 million, respectively, for site-related software. Total depreciation and amortization expense was $18.6...

  • Page 85
    ...,111) $ 12,008 $ 11,404 Mortgage notes outstanding are on property owned by our ButterÃ'elds subsidiary. The notes have variable interest rates, payment terms and are collateralized by certain land, buildings and improvements. Generally, the principal and interest are paid on a monthly basis. 81

  • Page 86
    ...general oÇce facilities located in San Jose, California. This Ã've-year lease is commonly referred to as a synthetic lease because it represents a form of oÃ...-balance sheet Ã'nancing under which an unrelated third-party funds 100% of the costs of the acquisition of the property and leases the asset...

  • Page 87
    ... renewal options and have rent escalation clauses tied to changes in the Consumer Price Index. Under the terms of the leases, the tenants are generally responsible for the payment of property taxes, insurance and maintenance costs related to the leased property. The following schedule provides...

  • Page 88
    ... a lawsuit, Gentry et.al. v. eBay, Inc. et.al, Ã'led in Superior Court in San Diego, California. The lawsuit was Ã'led on behalf of a purported class of eBay users who purchased allegedly forged autographed sports memorabilia on eBay. The lawsuit claims we were negligent in permitting certain named...

  • Page 89
    ... of 2001, Internet Auction has been putting into place certain user veriÃ'cation and site-monitoring processes that it believes have substantially reduced this type of credit card misuse on its system. The credit card companies are requesting that Internet Auction enter into new agreements that...

  • Page 90
    ... a less than 5% equity interest in Autotrader.com LLC (""Autotrader''). Under the terms of the marketing and services agreement, we developed the co-branded eBay Motors site and Autotrader refers customers desiring an auction pricing format to the co-branded site in exchange for a referral fee...

  • Page 91
    ... stock. In July 2000, we entered into an advertising and promotions agreement, which we subsequently amended in December 1999 and April 2000, with a privately held company that provides a real estate solution to home buyers and sellers. Under the terms of this agreement, we recognized revenues...

  • Page 92
    ... average prices of $4.02, $8.43 and $43.72 per share, respectively. At December 31, 2001, approximately 1.7 million shares were reserved for future issuance. On each January 1, the aggregate number of shares reserved for issuance under the employee stock purchase plan will be increased automatically...

  • Page 93
    eBay Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ÃŒ (CONTINUED) 401(k) Savings Plan We have a savings plan, which qualiÃ'es under Section 401(k) of the Internal Revenue Code. Participating employees may contribute up to 25% of their annual salary, but not more than statutory limits. We ...

  • Page 94
    ...to our initial public oÃ...ering, the fair value of option grants was determined using the BlackScholes option pricing model with volatility assumptions based on actual or expected Ã-uctuations in the price of our common stock. Generally accepted accounting principles provide companies with the option...

  • Page 95
    ... such option grants in our Prospectus Ã'led with the Securities and Exchange Commission on September 25, 1998 in connection with our initial public oÃ...ering under the headings ""Management ÃŒ Director Compensation'' and ""Management ÃŒ Compensation Arrangements.'' At December 31, 2001, there were...

  • Page 96
    eBay Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ÃŒ (CONTINUED) The provision for income taxes is composed of the following...taxed at diÃ...erent rates S Corporation loss Acquisition related expenses Stock-based compensation Subsidiary loss net beneÃ'tted Tax-exempt interest income State taxes...

  • Page 97
    ...to certain working capital adjustments. NeoCom provides an online Chinese language marketplace for the trading of goods and services for both individual and business customers in Taiwan. NeoCom's corporate oÇce is located in Taipei, Taiwan and the acquisition is expected to close in April 2002. 93

  • Page 98
    ... on a fully diluted basis, in exchange for $30.0 million in cash. EachNet provides an online marketplace for the trading of goods and services for both individual and business customers in the Peoples Republic of China. We will account for the investment using the equity method of accounting. 94

  • Page 99
    ...acquisitions of Billpoint, ButterÃ'elds, Kruse, alando.de.ag and Half.com, which were accounted for as poolings of interest. Quarterly Financial Data... 31 214,062 273,580 Quarter Ended June 30 September 30 2000 Net revenues Gross proÃ't Net income Net income per share-basic Net income per share...

  • Page 100
    ... Securities Exchange Act of 1934, as amended, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Jose, State of California, on the 22nd day of March, 2002. eBay Inc. /s/ MARGARET C. WHITMAN Margaret C. Whitman President...

  • Page 101
    ... any eBay member's User ID, there is a Feedback Rating number in parentheses ( ). For example: iwin (180) means that this member's User ID is iwin and the member has received positive feedback comments from at least 180 other eBay members. Positive comments on character and business practices build...