eBay 2001 Annual Report Download - page 7

The Internet oÅers the Ñrst opportunity to create a compelling global business that overcomes the
ineÇciencies associated with traditional trading among buyers and sellers of all types. An Internet-based,
centralized marketplace oÅers the following beneÑts:
‚ facilitates buyers and sellers meeting, listing items for sale, exchanging information, interacting with
each other and, ultimately, consummating transactions;
‚ allows buyers and sellers to trade directly, bypassing traditional intermediaries and lowering costs
for both parties;
‚ is global in reach, oÅering buyers a signiÑcantly broader selection of goods to purchase and
providing sellers the opportunity to sell their goods eÇciently to a broader base of buyers;
‚ oÅers signiÑcant convenience, allowing trading at all hours and providing continuously updated
information;
‚ fosters a sense of community through direct buyer and seller communication, thereby enabling
interaction between individuals with mutual interests; and
‚ establishes fair market prices for items where no eÇcient market exists, for example, for rare items,
distressed and surplus goods.
The Online Trading Opportunity
Our online trading platform has historically oÅered the exchange of goods among buyers and sellers of
traditional types, competing with classiÑed advertisements, collectibles shows, garage sales, Öea markets
and other venues such as auction houses. As our service has evolved, its applicability has expanded to
broader categories of items, and to a broader and more global user base. As a result, our product mix has
shifted from primarily collectible items to a mix that now includes practical everyday items, such as
household goods, computers, consumer electronics and other items. Our user base has grown from
individual consumers to also include merchants, small to mid-sized businesses, global corporations and
government agencies.
eBay's Strategy
Our objective is to build upon our position as the world's leading community-commerce model and
the most compelling commerce platform on the Internet. Our vision is to help practically anyone buy or
sell practically anything in the world. The key elements of our strategy are to broaden the eBay trading
platform, develop global markets, enhance features and functionality, and foster eBay community aÇnity.
Broaden the eBay Trading Platform
The eBay service was originally introduced in September 1995, to create an eÇcient forum for
individuals to trade with one another. Since our beginning as a grassroots online trading community, we
have attracted a signiÑcant number of buyers and sellers through word of mouth and by providing buyers
and sellers a place to socialize, discuss topics of common interest and ultimately to trade goods with one
another. The number of categories where eBay users can list goods for sale has grown from 10 when eBay
was Ñrst introduced, to more than 18,000 as of December 31, 2001. To continue the rapid growth of our
business, we are pursuing a strategy focused primarily on category development, geographic expansion and
improving the quality and range of services oÅered to eBay users.
As the number of transactions on the eBay platform continues to expand, trading activities in individual
categories often evolve into unique communities of buyers and sellers. A large portion of our user programs,
marketing and other business development activities are designed to support the acceleration of trading in the
most active categories, including various collectibles, computers, consumer electronics, jewelry, motors,
books, music and movies, real estate, tickets and travel. We support existing and new product categories by
introducing category-specific bulletin boards and chat rooms, integrating category-specific content, advertising
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