eBay 2002 Annual Report Download - page 1

To our Stockholders, Partners, Employees and the eBay Community:
A DeÑning Year for eBay
The year 2002 was a deÑning time in eBay's history Ì a time when all the aspects of the business
came together to demonstrate the company's true potential. The eBay community led the company to
another year of record performance, reÖected in extraordinary growth across all metrics. Registered users
grew to nearly 62 million by the end of the year, an increase of 46% from the year-ago level. And those
users listed more than 638 million items in 2002, a 51% year-over-year increase. Gross merchandise sales,
which is the value of all items sold on eBay, totaled nearly $15 billion in 2002, a 60% increase over 2001.
For the Ñrst time in our history, net revenues surpassed $1 billion, totaling $1.21 billion for the full year.
This growth strengthens our conÑdence in the depth of the US market, the potential of international
expansion, and the promise of online payments. But more importantly, the outstanding momentum we
achieved in 2002 fully validates our long-term strategy, and sets the stage for an even broader, larger and
more engaged community and a stronger company for years to come.
As we look back on the year, there were a few powerful trends that strengthened and expanded the
eBay marketplace:
e-commerce continues to broaden its appeal. Consumers are becoming increasingly comfortable with
shopping online, as reÖected in the fact that more people are coming online than ever before and more
Internet users are shopping each month, both in the US and around the world. According to the
US Department of Commerce, total retail e-commerce in the United States jumped 27% in 2002 to more
than $45 billion. eBay is beneÑting from this trend as it is one of the Ñrst places that consumers want to
visit.
eBay is now a global, mainstream shopping destination. A truly global marketplace, eBay ended
2002 with a presence in 27 markets around the world and 62 million users in more than 150 countries. As
a result, the eBay community fully reÖects the diversity of the Internet. And when these users come to
eBay, they are Ñnding unparalleled selection and value across a wide range of items, including everything
from collectibles to clothing, and everyday household items to automobiles. In total, our users can Ñnd
more than 16 million items listed in more than 27,000 categories on any given day. Providing this broad
and ever-changing selection are eBay sellers, now representing every link in the distribution chain, from
large manufacturers and wholesalers, to small businesses and individual merchants.
Our partnership with the eBay community continues to drive innovation and strengthen the
marketplace. Our sellers are quick to identify trends and oÅer new types of goods at a pace nearly
impossible anywhere else. Their constant innovation makes a compelling user proposition, which attracts
more shoppers and improves the overall marketplace.
eBay's strategy of managing the marketplace and listening to the community enables us to develop
features and functionality that assist sellers as well as buyers. We help our users become successful by
improving the experience, building out new and existing categories, helping sellers expand sales, attracting
and activating buyers, making online payments easier, and creating new communities around the world.
Perhaps nothing illustrates our role as marketplace manager better than our strategy to continuously
simplify and improve the trading process. eBay's most signiÑcant achievement in this area in 2002 was the
acquisition of PayPal, the leading online payment service that allows any business or consumer with an
email address to securely, conveniently, and cost-eÅectively send and receive payments online. Payment is
a vital function to trading on eBay and integrating PayPal's functionality into the eBay platform is
expanding trading, improving trust and safety, and making the eBay user experience easier, faster and safer
for everyone. Having only completed the acquisition of PayPal in October, our Payments business has
become a third major engine of growth, both on eBay and oÅ.