eBay 2004 Annual Report Download - page 26

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The number of items listed on eBay's trading platforms increased 45% to 1.4 billion in 2004, from
971.0 million in 2003, and increased 52% in 2003 from 638.3 million in 2002. This percentage growth in
listings was experienced across our U.S. and, more signiÑcantly, our international platforms.
U.S. Marketplace Segment
U.S. Marketplace segment net transaction revenues increased 31% in 2004, 43% in 2003, and 51% in
2002, compared to the respective prior year. Gross merchandise volume from the U.S. Marketplace segment
increased 27% in 2004, and 41% in 2003 and 2002, respectively. The U.S. Marketplace is our largest and most
developed business. Net transaction revenues derived from the U.S. Marketplace segment represented 42% of
the total net transaction revenues in 2004. We expect net transaction revenues from our U.S. Marketplace
segment to increase in 2005, but to decrease as a percentage of total eBay Marketplace net transaction
revenues as the International Marketplace segment grows in signiÑcance. In addition, even as the
U.S. Marketplace segment continues to grow in absolute terms, we expect its growth rate in 2005 to be lower
than that of 2004.
International Marketplace Segment
International Marketplace segment net transaction revenues increased 76% in 2004, 121% in 2003, and
168% in 2002, compared to the respective prior year. International Marketplace segment net transaction
revenues as a percentage of total net transaction revenues was 36% in 2004, 31% in 2003 and 27% in 2002.
Gross merchandise volume from the International Marketplace segment increased 70% in 2004, 102% in 2003,
and 126% in 2002, compared to the respective prior year. For 2004, the growth in our International
Marketplace segment net transaction revenues, both in absolute terms and as a percentage of total net
transaction revenues, was primarily the result of strong performances in the United Kingdom and South Korea
and a solid performance in Germany. The relative strength of foreign currencies against the U.S. dollar
resulted in increased net revenues of approximately $117.0 million during 2004, when compared to the results
if the weighted-average foreign currency exchange rates used in the preparation of our 2003 consolidated
Ñnancial statements were used. Changes in foreign currency rates will impact our operating results and, to the
extent that the U.S. dollar strengthens, our foreign currency denominated net revenues will be negatively
impacted. We expect that the growth rates of our International Marketplace segment transaction net revenues
will continue to decline in 2005, although we expect such revenues to grow in signiÑcance relative to our total
eBay Marketplace as we continue to develop and deploy our global online trading platform during 2005.
Payments Segment Net Transaction Revenues
Payments segment net transaction revenues increased 59% in 2004, 360% in 2003 and 452% in 2002,
compared to the respective prior year. Payments segment net transaction revenues as a percentage of total net
transaction revenues was 21% in 2004, 20% in 2003, and 8% in 2002. The growth in our Payments segment net
transaction revenues, both in absolute terms and as a percentage of total net transaction revenues is primarily
the result of increases in PayPal transaction volume driven primarily by the growth in the eBay Marketplace
and, for 2003 and 2002, our acquisition of PayPal in October 2002.
During 2004, over $18.9 billion in total payment volume was transacted on the PayPal platform as
compared to $12.2 billion during 2003. As of December 31, 2004, PayPal had 63.8 million accounts, compared
to 40.3 million accounts at December 31, 2003. Our Payments segment net transaction revenues as a
percentage of total payment volume was 3.6% in 2004 and 3.5% in 2003. The growth in Payments net
transaction revenues was positively aÅected by PayPal's continued penetration of eBay Marketplace transac-
tions in all countries, particularly in the United States and the United Kingdom. Further, Payments net
transaction revenues have grown in connection with the increase in our eBay Marketplace gross merchandise
volume during 2003 and 2004. The relative strength of foreign currencies, primarily the Euro, against the
U.S. dollar and the British pound, resulted in increased net revenues of approximately $12.9 million during
2004 when compared to the results if the weighted-average foreign currency exchange rates used in the
preparation of our 2003 consolidated Ñnancial statements were used.
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