eBay 2002 Annual Report Download - page 6

Growth of eBay User Activity
Our success has been largely dependent upon the success of our community of individual users. This
success is reÖected in the growth of conÑrmed, registered users from two million at December 31, 1998 to
62 million at December 31, 2002. At December 31, 2002, we had nearly 28 million active users, based on
activity over a trailing 12-month period, compared to nearly 18 million at December 31, 2001. We deÑne
an active user as any user who bid on, purchased, or listed an item during the prior 12 months. We attract
buyers and sellers to our community by oÅering:
Buyers Sellers
‚ Selection ‚ Access to broad markets
‚ Convenience ‚ Low distribution costs
‚ Entertainment ‚ Ability to maximize prices and increase
‚ Value sales
A Faster, Easier and Safer Trading Experience
Payment Services
Providing more eÇcient and more eÅective methods of payment is essential to creating a faster, easier
and safer online trading experience. Traditional payment methods such as checks, money orders, and credit
cards via merchant accounts all present various obstacles to the online trading experience, including
lengthy processing time, inconvenience, and high costs.
Through our acquisition of PayPal, Inc. on October 3, 2002, we intend to accelerate the velocity of
trade on eBay by eliminating the various obstacles presented by traditional payment methods. PayPal
enables any business or consumer with email access in 38 countries to send and receive online payments
securely, conveniently and cost-eÅectively. PayPal's network builds on the existing Ñnancial infrastructure
of bank accounts and credit cards to create an international payment system. PayPal delivers a product
well suited for small businesses, online merchants, individuals and others.
Our goal for PayPal is to become the Web's most convenient, secure, and cost-eÅective payment
solution. PayPal currently oÅers its account-based system in English to users in 38 countries including the
United States. For the post-acquisition period from October 4, 2002 through December 31, 2002, PayPal's
payment volume sent to business accounts, which we refer to as Total Payment Volume, or TPV, totaled
$2.1 billion. PayPal's TPV consists mainly of payments to small businesses. Currently, the majority of
these payments relate to sales of goods and services through online trading platforms, primarily on eBay.
As of December 31, 2002, PayPal had 23 million accounts. During the post-acquisition period from
October 4, 2002 through December 31, 2002, users of eight million of these accounts sent or received a
payment that resulted in a fee. As of December 31, 2001, PayPal had nearly 13 million total accounts, of
which eight million sent or received a payment that resulted in a fee during the year ended December 31,
2001.
PayPal has achieved its rapid growth through a combination of wide adoption on eBay.com and our
website in the United Kingdom, user convenience, competitive pricing and robust customer safeguards.
During the year ended December 31, 2002, PayPal's total number of accounts grew by 10.5 million, an
average of 29,000 per day. For the post-acquisition period from October 4, 2002 through December 31,
2002, PayPal processed an average of 440,000 payments per day, totaling $24.0 million in daily volume.
The average payment amount sent during this period was $55.
Geographic Expansion
The continued geographic expansion of the eBay marketplace is critical to creating a faster, easier and
safer online trading experience. In 2002, eBay, together with certain minority-owned companies,
unconsolidated subsidiaries and aÇliates, increased its geographic reach to 27 countries including websites
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