eBay 1999 Annual Report Download - page 2

To Our Stockholders, Partners, Employees and the eBay Community:
A year in review
1999 was a historic year for eBay, filled with astonishing growth and rapid change.
We began the year with 2.2 million users, a vibrant community about the size of Portland, Oregon and ended
the year with over 10 million confirmed registered users—more than Michigan, the eighth largest state in the
country. And that phenomenal growth reflected itself in every measure of our business: the number of items listed
in 1999 totaled 129.6 million compared to 33.7 million in 1998. In the fourth quarter of 1999, every two tenths
of a second, someone, somewhere was listing an item for sale on eBay — that translates to $113 dollars of gross
merchandise sales per second. And, most impressive, gross merchandise sales grew an astounding 276 percent
from $745 million in 1998 to $2.8 billion in 1999. During 1999, our users generated more economic activity on
eBay than on any other consumer e-commerce site.
Underlying this strength is the incredible popularity of the site. In 1999, eBay became one of the most
recognizable Internet brands around the world, with numerous mentions in the media, business press and
television. eBay was featured in such high profile publications as Forbes, the Washington Post and Time
Magazine. In Time magazine, eBay was voted number one in their ‘‘Best of 1999’’ in the Cybertech area. eBay
also continues to be mentioned on television shows including ‘‘Who Wants to be a Millionaire?’’, ‘‘The
Simpsons’’, ‘‘The Tonight Show’’, ‘‘Suddenly Susan’’, ‘‘Sports Night’’ and of course, ‘‘David Letterman’s Top Ten
List’’.
During the year, we endeavored to make eBay a more vibrant marketplace by entering new trading regions.
We expanded to reach new areas of the world including the United Kingdom, Australia, Canada and Germany.
We entered regional markets to help bring trading closer to our users’ homes with the launch of 53 regional sites
across the country.
In addition, thanks to our strong relationship with AOL and new relationships with 50 other leading online
partners, eBay’s reach continues to expand. Our total online relationships now number over 200 partnerships.
We also have over 600 links in a variety of areas on AOL that bring customers to eBay in addition to our new
co-branded sites for AOL.com, Compuserve, Digital Cities and ICQ .
Of course, 1999 had its share of challenges as well. We experienced some tough times with issues like
service disruptions. Site stability has been and still is our number one priority. In November, the high-availability
system became operational. Although this system will not prevent all future technical problems, it is a big step
in our journey in maintaining site stability. We are also continuing our quest to ensure that there is no single
point of failure, that our systems continue to scale to handle future growth, and to continue to build operational
excellence into all of our engineering practices.
We saw the dynamics changing on eBay this past year. We are no longer just a collectibles site as evidenced
by the kind of items listed on our site. In fact, on almost any given day, approximately 60% of gross merchandise
sales listed consist of such non-collectible items as cars, photo and electronics, computers and sports equipment.
Along with this metamorphosis is the broadening of categories and eBay’s user base from collectors to the mass
market. We have expanded the number of categories for buying and selling on eBay from about 1,500 to nearly
3,000 over the year to reflect the increasing range of items on the site.
We also entered new trading areas to add to the variety of items in the marketplace. Last spring, we
announced the acquisitions of Butterfield & Butterfield and Kruse International. We leveraged these well-known
land-based brands into new online initiatives with the launch of Great Collections, a new area of eBay devoted
to fine antiques, art and rare collectibles, and the Automotive category devoted to the sale of used and
collector cars.