eBay 2002 Annual Report Download - page 27

Percent Percent
2000 Change 2001 Change 2002
(in millions, except percents)
Supplemental Operating Data:
ConÑrmed registered users at end of year ÏÏÏÏÏÏÏ 22.5 89% 42.4 45% 61.7
Number of items listedÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 264.7 60% 423.1 51% 638.3
Gross merchandise salesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $5,422 72% $9,319 60% $14,868
PayPal accounts at end of period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì 23.3
PayPal number of payments(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì 39.2
PayPal total payment volume(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì $ 2,138
(1) Amounts shown are for the post-acquisition period from October 4, 2002 through December 31, 2002.
Our net revenues result from fees associated with our transaction, third-party advertising, end-to-end
services, and oÉine services in our U.S., International and Payments segments. Transaction revenue is
derived primarily from listing, feature and Ñnal value fees paid by sellers and fees from payment processing
services. Revenue from third-party advertising is derived principally from the sale of online banner and
sponsorship advertisements for cash and through barter arrangements. End-to-end services revenue is
derived principally from contractual arrangements with third parties that provide transaction services to
eBay and PayPal users. OÉine services revenue is derived from a variety of sources including seller
commissions, buyer premiums, bidder registration fees and auction-related services including appraisal and
authentication.
The successive year-over-year growth in net revenues from 2000 through 2002, was primarily the
result of increased auction transaction activity, reÖected in the growth of the number of registered users,
listings and gross merchandise sales. Our acquisition of iBazar S.A. and of a majority interest in Internet
Auction Co., Ltd. during 2001 contributed less than 3% of our net revenues during the year ended
December 31, 2001. Acquisitions of PayPal, Inc., NeoCom Technology Co., Ltd. and the remaining 50%
interest in our Australian subsidiary during 2002, contributed approximately 6% of our net revenues during
the year ended December 31, 2002. Our revenue growth during these periods was also positively impacted
by fee increases in the U.S. and various international locations.
Revenue from U.S. and International Segments
Transaction Net Revenue
U.S. segment transaction net revenue increased 51% between 2000 and 2001 and 51% between 2001
and 2002. International segment transaction net revenue increased 297% between 2000 and 2001 and 168%
between 2001 and 2002. The successive year-over-year growth in U.S. and International segment
transaction net revenues from 2000 to 2002 was primarily the result of increased auction transaction
activity, reÖected in the growth of the number of registered users, listings and gross merchandise sales. We
experienced transaction net revenue growth across all categories during 2001 and 2002 with motors,
computers, consumer electronics, collectibles, and books/music/movies making the most signiÑcant
impact. International segment transaction net revenue as a percentage of consolidated transaction net
revenue was 8% in 2000, 18% in 2001 and 27% in 2002. This growth is primarily the result of strong
performance in Germany, the United Kingdom, Canada and South Korea. We expect international
segment transaction net revenues will continue to grow in signiÑcance to our business as we develop and
deploy our global marketplace. In addition, new regulations in the European Union relating to the
collection of value-added taxes, or VAT, on digital services will require us to collect and remit VAT on
our own fees beginning in July 2003. We intend to work with the relevant tax authorities to clarify our
obligations under these regulations and to change our software to permit the billing of these taxes. The
increased costs to our European users may reduce their activity on our websites and could adversely aÅect
our international transaction net revenues.
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