eBay 2006 Annual Report Download - page 52

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Net transaction revenues from Payments earned internationally totaled $533.2 million in 2006, $364.5 million
in 2005 and $207.6 million in 2004, representing 38.0%, 36.4% and 30.5% of total Payments segment net
transaction revenues, respectively. Payments net revenues were positively impacted by foreign currency translation
of approximately $4.3 million and $5.3 million in 2006 and 2005, respectively. 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.
In 2007, we expect the Payments net transaction revenues to increase in total and for net transaction revenues
earned internationally to increase in total and as a percentage of Payments net transaction revenues. We expect to
grow our merchant service business and continue to drive higher penetration rates on Marketplaces platforms. We
also expect that Payments net transaction revenues will increase as a percentage of total net transaction revenues in
2007.
Communications Net Transaction Revenues
Communications net transaction revenues were $192.8 million in 2006 as compared to $24.8 million in 2005
(net revenues from the acquisition date of October 14, 2005 through the end of 2005). The increase in net revenues
was primarily due to a full year of revenues generated from our VoIP offerings in 2006. The cumulative number of
Skype registered users increased to 171.2 million at December 31, 2006 from 74.7 million at December 31, 2005.
Additionally, SkypeOut minutes increased to 4.1 billion, which resulted in $177.7 million in revenue in 2006. The
growth was due to rapid user expansion.
Net transaction revenues from Communications earned internationally totaled $163.7 million in 2006 and
$21.4 million in 2005, representing 85% and 87% of total Communications net transaction revenues, respectively.
Communications net revenue was positively impacted by foreign currency translation of approximately $5.1 million
in 2006. 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 Communications net transaction revenues to increase during 2007 as we expect to continue to
increase both our user base and product offerings.
Advertising and Other Net Revenues
Advertising and other net revenues totaled $171.8 million in 2006, $123.4 million in 2005 and $94.3 million in
2004. These amounts represented 3% of total net revenues for all years presented. We continue to view our business
as primarily transaction-driven and we expect advertising and other net revenues to continue to represent a relatively
small proportion of total net revenues during 2007.
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