eBay 2003 Annual Report Download - page 27

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The number of active users on the eBay platform (which excludes the Internet Auction and EachNet
websites) increased 49% during 2003 to 41.2 million at December 31, 2003. Active users increased 56%
during 2002 to 27.7 million at December 31, 2002, from 17.8 million at December 31, 2001. Active users
are the number of users on the eBay platform who bid, bought or listed over the trailing twelve months.
We believe that increases in user activity are largely the result of our promotional eÅorts and our emphasis
on helping our user community be successful through the introduction of new site features and
functionality and expanded trust and safety programs.
The number of items listed on eBay.com and our international sites increased by 52% to 971.0 million
in 2003, from 638.3 million in 2002, and increased 51% in 2002 from 423.1 million in 2001. This
acceleration in listing growth was experienced across our U.S. and international platforms.
Gross merchandise sales from the U.S. and International segments increased 60% in both 2003 and
2002. SigniÑcant contributions to this growth came from our U.S., German, U.K. and South Korean
operations. eBay transaction net revenues as a percentage of gross merchandise sales was 7.1% in 2003,
6.8% in 2002 and 6.3% in 2001.
During 2003, over $12.2 billion in TPV was transacted on the PayPal platform. As of December 31,
2003, PayPal had 40 million accounts, compared to 23 million accounts at December 31, 2002.
U.S. and International Segment Net Transaction Revenues
U.S. segment transaction net revenues increased 43% in 2003 and 51% in 2002. International segment
transaction net revenues increased 121% in 2003 and 168% in 2002. The successive year-over-year growth
in U.S. and International segment transaction net revenues 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 major categories with motors,
home & garden, computers, consumer electronics, clothing & accessories, and collectibles making the most
signiÑcant dollar impact.
International segment transaction net revenues as a percentage of total transaction net revenues was
31% in 2003, 27% in 2002 and 18% in 2001. This growth is primarily the result of strong performances in
Germany, the United Kingdom and South Korea. Additionally, the relative strength of foreign currencies,
primarily the Euro, against the U.S. dollar resulted in increased net revenues of approximately
$82.0 million during 2003, when compared to the weighted-average foreign currency exchange rates used
in the preparation of our 2002 Consolidated Financial Statements. Our operations located in Europe
experienced seasonally slower growth in July and August, with September and the fourth quarter of 2003
showing improved activity in all markets. We expect that International segment transaction net revenues
will continue to grow in signiÑcance to our business as we continue to develop and deploy our global online
trading platform during 2004.
On July 1, 2003, eBay began collecting value-added taxes, or VAT, on the fees we charge certain
sellers in the European Union, or EU. We continue to work with the relevant tax authorities to clarify our
obligations under these new regulations. There have been and will continue to be substantial ongoing costs
associated with complying with the VAT rules throughout the EU, and the increased costs to our
European users may reduce their activity on our websites and could adversely aÅect our international
transaction net revenues. We also believe that changes in foreign currency rates will impact our operations
and to the extent that the U.S. dollar strengthens, our foreign currency denominated transaction net
revenues will be negatively impacted.
Payments Segment Net Transaction Revenues
Payments segment transaction net revenues increased 360% in 2003 and 452% in 2002. The year-over-
year growth in 2003 reÖects a full year of transaction activity from PayPal and substantial increases in
transaction volume. The Payments segment contributed approximately 20% of our total net transaction
revenues in 2003 compared to 8% in 2002.
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