eBay 2008 Annual Report Download - page 9

Download and view the complete annual report

Please find page 9 of the 2008 eBay annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

PART I
FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that involve
expectations, plans or intentions (such as those relating to future business or financial results, new features or
services, or management strategies). You can identify these forward-looking statements by words such as “may,”
“will,” “would,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other
similar expressions. These forward-looking statements involve risks and uncertainties that could cause our actual
results to differ materially from those expressed or implied in our forward-looking statements. Such risks and
uncertainties include, among others, those discussed in “Item 1A: Risk Factors,” of this Annual Report on
Form 10-K as well as our consolidated financial statements, related notes, and the other financial information
appearing elsewhere in this report and our other filings with the Securities and Exchange Commission, or the SEC.
We do not intend, and undertake no obligation, to update any of our forward-looking statements after the date of this
report to reflect actual results or future events or circumstances. Given these risks and uncertainties, readers are
cautioned not to place undue reliance on such forward-looking statements.
ITEM 1: BUSINESS
Overview
eBay Inc. was formed as a sole proprietorship in September 1995 and was incorporated in California in May
1996. In April 1998, we reincorporated in Delaware, and in September 1998, we completed the initial public
offering of our common stock. Our principal executive offices are located at 2145 Hamilton Avenue, San Jose,
California 95125, and our telephone number is (408) 376-7400. When we refer to “we,” “our” or “eBay” in this
Annual Report on Form 10-K, we mean the current Delaware corporation (eBay Inc.) and its California predecessor,
as well as all of its consolidated subsidiaries. When we refer to “eBay.com,” we mean the online marketplace
located at www.ebay.com and its localized counterparts. When we refer to “PayPal,” we mean the online payments
platform located at www.paypal.com and its localized counterparts. When we refer to “Skype,” we mean the Voice
over Internet Protocol, or VoIP, offerings provided by our subsidiary Skype Technologies S.A.
Our purpose is to pioneer new communities around the world built on commerce, sustained by trust and
inspired by opportunity. We provide online marketplaces for the sale of goods and services as well as other online
commerce, or ecommerce, platforms, online payment solutions and online communications offerings to a diverse
community of individuals and businesses.
We operate three primary business segments: Marketplaces, Payments and Communications. Our Market-
places segment provides the infrastructure to enable global online commerce on a variety of platforms, including the
traditional eBay.com platform, our other online platforms, such as our online classifieds businesses, our secondary
tickets marketplace (StubHub), our online shopping comparison website (Shopping.com), our apartment listing
service platform (Rent.com), as well as our fixed price media marketplace (Half.com). Our Payments segment is
comprised of our online payment solutions PayPal and Bill Me Later (which we acquired in November 2008). Our
Communications segment, which consists of Skype, enables VoIP calls between Skype users and provides low-cost
connectivity to traditional fixed-line and mobile telephones.
We generate net transaction revenues from all three of our business segments. Our net transaction revenues
from our Marketplaces segment are derived primarily from listing and final value fees paid by sellers. For our
Payments segment, net transaction revenues are generated primarily by fees paid by merchants for payment
processing services. Our Communications segment net transaction revenues are generated primarily from fees
charged to users to connect Skype’s VoIP product to traditional fixed-line and mobile telephones. These fees are
charged on a per-minute basis or on a subscription basis and we refer to these minutes as SkypeOut minutes.
We generate marketing services and other revenues from all three of our business segments. Our marketing
services are derived principally from the sale of advertisements, revenue sharing arrangements, classifieds fees,
lead referral fees. Other revenues are derived principally from interest earned from banks on certain PayPal
1