eBay 2000 Annual Report Download - page 79

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
eBay leases property and equipment under non-cancelable operating leases that expire at various dates.
Future minimum rental payments under non-cancelable operating leases subsequent to December 31, 2000,
are as follows (in thousands):
Year ending Operating
December 31, Leases
2001 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $10,383
2002 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,356
2003 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,351
2004 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,473
2005 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,269
Thereafter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 52
Total minimum lease payments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $43,884
Rent expense in the years ended December 31, 1998, 1999 and 2000 totaled $672,000, $3.9 million and
$4.8 million, respectively.
Advertising
GO.com
On February 6, 2000, eBay entered into a four-year marketing agreement with GO.com. In accordance
with the agreement, GO.com provided eBay with online and oÉine promotion, eBay and GO.com developed a
co-branded version of the eBay service and both companies developed a site featuring merchandise from
GO.com aÇliates. These aÇliates include but are not limited to The Walt Disney Company, ESPN and ABC.
In consideration for this agreement, eBay will pay a minimum of $30 million to GO.com over the four-year
term. See Subsequent Events Ì Note 16.
NEC
On February 17, 2000, eBay Japan Inc., a wholly owned subsidiary of eBay, entered into a shareholder
and marketing services agreement with NEC Corporation. In accordance with the shareholder agreement,
NEC acquired 30% of eBay Japan and eBay retained the remaining 70% interest in eBay Japan. eBay will
continue to consolidate eBay Japan due to a majority ownership interest and will reÖect a minority interest for
the equity interest of NEC.
In accordance with the marketing agreement, NEC provided marketing and services to eBay Japan in an
eÅort to deliver a minimum level of conÑrmed registered users. As compensation for the marketing and other
services performed by NEC, eBay Japan paid NEC an annual up-front fee of approximately $1.5 million. The
Ñrst payment was made in April, 2000, and additional payments will be payable on the anniversary of such
date in each of the subsequent three years as long as the contract is in eÅect. If NEC is unable to deliver the
minimum level of conÑrmed registered users, then eBay will have the right to repurchase shares of eBay Japan
from NEC.
AutoTrader.com
On March 6, 2000, eBay and Autotrader.com LLC (""Autotrader'') entered into a marketing and services
agreement whereby eBay and Autotrader developed a co-branded site, and Autotrader will refer customers
desiring an auction pricing format to eBay for a referral fee. Under the terms of the agreement, eBay has
committed to provide certain marketing expenditures for the promotion of the eBay service and additional
automobile related services oÅered by Autotrader. In consideration for these expenditures, eBay is committed
to pay $29 million over the 3.5-year term.
74