eBay 2007 Annual Report Download - page 102

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Since October 14, 2005, the results from our Communications segment reflect Skype’s operations. The
following table summarizes the financial performance of our reporting segments (in thousands):
Marketplaces Payments Communications Consolidated
Year Ended December 31, 2005
Net revenues from external customers ......... $3,499,137 $1,028,455 $24,809 $4,552,401
Direct costs . ............................ 2,008,215 725,616 25,821 2,759,652
Direct contribution...................... 1,490,922 302,839 (1,012) 1,792,749
Operating expenses and indirect costs of net
revenues ........................... 351,042
Income from operations .................. 1,441,707
Interest and other income, net ............... 111,099
Interest expense.......................... (3,478)
Income before income taxes ................ $1,549,328
Marketplaces Payments Communications Consolidated
Year Ended December 31, 2006
Net revenues from external customers ......... $4,334,290 $1,440,530 $194,921 $5,969,741
Direct costs . ............................ 2,503,961 1,102,919 221,819 3,828,699
Direct contribution...................... 1,830,329 337,611 (26,898) 2,141,042
Operating expenses and indirect costs of net
revenues ........................... 718,086
Income from operations .................. 1,422,956
Interest and other income, net ............... 130,017
Interest expense.......................... (5,916)
Income before income taxes ................ $1,547,057
Marketplaces Payments Communications Consolidated
Year Ended December 31, 2007
Net revenues from external customers ......... $5,363,891 $1,926,616 $381,822 $7,672,329
Direct costs . ............................ 3,017,895 1,534,627 337,338 4,889,860
Direct contribution...................... 2,345,996 391,989 44,484 2,782,469
Operating expenses and indirect costs of net
revenues ........................... 2,169,289
Income from operations .................. 613,180
Interest and other income, net ............... 154,271
Interest expense.......................... (16,600)
Income before income taxes ................ $ 750,851
Direct contribution consists of net revenues from external customers less direct costs. Direct costs include
specific costs of net revenues, sales and marketing expenses, and general and administrative expenses over which
segment managers have direct discretionary control, such as advertising and marketing programs, customer support
expenses, bank charges, site operations expenses, product development expenses, billing operations, certain
92
eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)