eBay 2006 Annual Report Download - page 6

We believe our Marketplaces segment websites make inefficient markets more efficient because:
• Our global community of users can easily and inexpensively communicate, exchange information and
complete transactions;
• Our Marketplaces include more than a hundred million items, creating a wide variety and selection of goods;
• We bring buyers and sellers together for lower fees than traditional intermediaries; and
• Our Marketplaces provide for efficient information exchange.
In particular, large markets with broad buyer and seller bases, wide product ranges, and moderate shipping
costs have been successful on our Marketplaces platforms. Generally speaking, our marketplaces are most effective,
relative to available alternatives, at addressing markets of new and scarce goods, end-of-life products and used and
vintage items.
Global Community of Buyers and Sellers
We have aggregated a significant number of buyers, sellers, and items listed for sale, which, in turn, has
resulted in a vibrant online commerce environment. Our sellers generally enjoy high conversion rates and our
buyers enjoy an extensive selection of broadly-priced goods and services. Key components of our community
philosophy are maintaining honest and open marketplaces and treating individual users with respect. We seek to
maintain the satisfaction and loyalty of our buyers and sellers by offering a variety of community and support
features, such as announcement and bulletin boards, customer support boards and personal pages, as well as other
topical or category-specific information exchanges. By applying a consistent set of policies to our community, we
seek to create a level playing field that lets individuals and businesses of all types and sizes access broad markets
and compete equally.
Our success has resulted largely from the growth of our community of confirmed registered users, which has
increased in size from approximately two million at the end of 1998 to approximately 222 million as of
December 31, 2006. As of December 31, 2006, we had approximately 82 million active users on the eBay.com
platforms, compared to approximately 72 million at the end of 2005. We define an active user as any user who bid
on, bought, or listed an item during the most recent 12-month period.
Marketplaces Platforms
Our Marketplaces platforms are fully automated, topically arranged, and easy-to-use online services that seek
to provide availability 24 hours a day, seven days a week, enabling sellers to list items for sale and buyers to bid for
and purchase items of interest, and all users to browse through listed items from any place in the world at any time.
The platforms include software tools and services, available either for no charge or for a fee, that allow buyers and
sellers to trade with one another more easily and efficiently. The Marketplaces platforms consist of our core online
commerce platform, eBay.com, and adjacent platforms consisting of Shopping.com, our classifieds websites and
Rent.com. Marketplaces earns revenue from listing, feature and final value fees paid by sellers, lead referral fees
and advertising fees.
eBay.com Platform
Our Marketplaces core platform, eBay.com, includes our traditional auction format, fixed price format and
eBay Stores. We offer the core platform on localized sites in 24 countries.
Auction Listing Format
At the core of our Marketplaces platform are our traditional auction format listings, in which a seller will select
a minimum price for opening bids, with the option to set a reserve price for the item, which is the minimum price at
which the seller is willing to sell the item. A seller with appropriate feedback ratings can also sell in a “Multiple
Item Auction” format, which allows a seller to sell multiple identical items to the highest bidders.
2