eBay 2005 Annual Report Download - page 57

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The successive year-over-year growth in net revenues from 2003 through 2005 was primarily the result of
increased auction and fixed-price transaction activity, reflected in the growth in the number of our confirmed
registered users, user activity, listings, gross merchandise volume and payment transactions processed by
PayPal.
eBay Marketplaces Net Transaction Revenues
Total net transaction revenues from the U.S. and International Marketplaces segments in aggregate
increased 36% in 2005, 48% in 2004, and 66% in 2003, compared to the respective prior year. The growth in
both U.S. Marketplaces and International Marketplaces segment net transaction revenues was primarily the
result of increased auction transaction activity, reflected in the growth of the number of registered users, active
users, listings and gross merchandise volume. Gross merchandise volume from the U.S. and International
Marketplaces segments together increased 30% in 2005, 44% in 2004 and 60% in 2003, compared to the
respective prior year. U.S. and International Marketplaces segment net transaction revenues as a percentage of
user gross merchandise volume was 7.7% for 2005, 7.3% for 2004, and 7.1% for 2003. The increases in 2005
reflected the growth in both domestic and international net transaction revenues due to increased transaction
activity, reflected in the growth of the number of registered users, active users, listings and gross merchandise
volume and revenue transactions from our acquired entities. The increases in 2004 and 2003 reflected
increased feature adoption and the impact of our fee increases implemented in those years. In addition, there
was gross merchandise volume growth across all major categories, with the motors, clothing & accessories,
consumer electronics, home & garden, books/movies/music, sports, and computer categories having the most
significant dollar impact.
The number of active users on the eBay platform increased 28% during 2005 to 71.8 million at
December 31, 2005. Active users increased 36% during 2004 to 56.1 million at December 31, 2004, from
41.2 million at December 31, 2003. We believe that increases in user activity are largely the result of our
promotional efforts 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, in addition to our international
expansion.
The number of items listed on eBay's trading platforms increased 33% to 1.9 billion in 2005, from
1.4 billion in 2004, and increased 45% in 2004 from 971.0 million in 2003. This percentage growth in listings
was experienced across our U.S. and, more significantly, our international platforms.
U.S. Marketplaces Segment
U.S. Marketplaces segment net transaction revenues increased 30% in 2005, 31% in 2004, and 43% in
2003, compared to the respective prior year. Gross merchandise volume from the U.S. Marketplaces segment
increased 19% in 2005, 27% in 2004 and 41% in 2003, respectively. Net transaction revenues derived from the
U.S. Marketplaces segment represented 39% of the total net transaction revenues in 2005. For 2005, the
growth in our U.S. Marketplaces segments net transaction revenues was primarily the result of continued
strong transaction activity and approximately $100 million in revenues from our recent acquisitions. We expect
net transaction revenues from our U.S. Marketplaces segment to increase in 2006, but to decrease as a
percentage of total eBay Marketplaces net transaction revenues as the International Marketplaces segment
grows in significance. In addition, even as the U.S. Marketplaces segment continues to grow in absolute terms,
we expect its growth rate in 2006 to be lower than that of 2005.
International Marketplaces Segment
International Marketplaces segment net transaction revenues increased 44% in 2005, 76% in 2004, and
121% in 2003, compared to the respective prior year. International Marketplaces segment net transaction
revenues as a percentage of total net transaction revenues was 38% in 2005, 36% in 2004 and 31% in 2003.
Gross merchandise volume from the International Marketplaces segment increased 42% in 2005, 70% in 2004,
and 102% in 2003, compared to the respective prior year. For 2005, the growth in our International
Marketplaces segment net transaction revenues, both in absolute terms and as a percentage of total net
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