eBay 2010 Annual Report Download - page 2

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To Our Stockholders,
In 2010, eBay Inc. became a stronger, more customer-focused company that is creating better experiences
through technology-driven innovation. We extended our leadership in payments, strengthened and grew
Marketplaces, and continued to operate efficiently so that we could reinvest in growth. In short, we delivered on
our financial commitments to you, making progress against our goals and planting seeds for future growth.
Our net revenues increased 5 percent in 2010 to $9.2 billion, compared to $8.7 billion in 2009. Excluding 2009
revenue from Skype (sold in November 2009) of $620.4 million, net revenues would have increased 13 percent,
from $8.1 billion in 2009 to $9.2 billion in 2010. Diluted earnings per share decreased to $1.36 in 2010,
compared to $1.83 in 2009. This was driven primarily by the gain on sale of Skype, which was partially offset by
the impact of a Skype-related legal settlement charge in 2009. We achieved an operating margin of 22 percent in
2010 compared to 17 percent in 2009 and delivered $2.7 billion of operating cash flow for the year.
Extending our lead in payments
In 2010, we connected more buyers and sellers than ever before through PayPal. We ended the year with net total
payment volume (TPV) of $92 billion – a 28 percent increase over 2009 – and more than 94 million active,
registered accounts globally.
Globally, PayPal continues to expand its footprint, with 47 percent of revenues coming from international markets,
up from 44 percent in 2009. PayPal strengthened its local competitive offerings, creating innovative partnerships
with local governments, and leading banks and mobile providers in markets such as Mexico, Brazil and China.
We saw continued strong growth across our Merchant Services business, which today accounts for more than 60
percent of our total payment volume, and great synergy between eBay and PayPal: eBay is now the largest source
of new accounts and payment volume for Bill Me Later.
PayPal also introduced innovative, emerging payment technology in 2010. We unveiled PayPal for Digital
Goods, an in-context payment solution that lets consumers pay for digital goods – such as games, news, music
and videos – without having to leave a publisher’s site.
Delivering a better eBay experience for customers
Ending the year with more than 94 million active users, eBay is one of the most visited ecommerce sites in the
world. In 2010, we worked to strengthen our position by fixing the fundamentals of our business, with a focus on
trust, selection, value and user experience. We made progress on all fronts last year.
To help customers feel more confident buying bigger-ticket items, and buying more often on eBay, we promoted
eBay Buyer Protection and eBay Top-Rated Sellers, who provide the best experiences on eBay.
We continued to increase value and selection across key categories and markets in 2010, focusing on new, fixed
price items and bringing more brand-name merchandise onto eBay, particularly in fashion. And we improved
user experience across key markets, rolling out a new homepage for eBay.com, with many personalization and
search enhancements. Overall, the experience is now cleaner, faster and easier to navigate. Customers noticed –
and approved. Net Promoter Scores (NPS), our measure for customer loyalty, improved for six consecutive
quarters among eBay buyers.
Our adjacent businesses also made steady gains. StubHub set sales records in 2010, driven by demand for World
Series tickets and concerts. Our classifieds business also posted healthy results, with strong growth globally.
Kijiji Canada, for example, has become the leading classifieds site in the country in terms of traffic.
Expanding our capabilities
During the year, we made or announced acquisitions that strengthen and complement our key businesses and that
position us for growth in mobile, local and social commerce globally: brands4friends, Germany’s largest online
shopping club for fashion and lifestyle, bolstered eBay’s position as a leading online fashion destination in
Europe; RedLaser gave us a leading mobile barcode-scanning application, allowing comparison shopping on