eBay 2004 Annual Report Download - page 22

marketplace and our global payments platform, and the proÑtability of our business and to evaluate the
eÅectiveness of investments that we have made and continue to make in the areas of international expansion,
customer support, product development, marketing and site operations. We believe that an understanding of
these key operating and Ñnancial measures and how they change over time is important to investors, analysts
and other parties analyzing our business results and future market opportunities.
Our expectations for growth
We expect that our growth in net revenues during 2005 will result primarily from increased net
transaction revenues across our U.S. Marketplace, International Marketplace and Payments segments. We
continue to make investments in our business and infrastructure to help us achieve our long-term growth
objectives. We expect to continue our investments in the areas of international expansion for both our eBay
Marketplace and our PayPal businesses, customer support, site operations, marketing and various corporate
infrastructure areas. We believe these investments are necessary to support the long-term demands of our
growing business as well as to build the infrastructure necessary to support long-term growth. In addition, to
the extent that the U.S. dollar strengthens against foreign currencies, and, in particular, the Euro and the
British pound, the remeasurement of these foreign currency denominated transactions into U.S. dollars will
negatively impact our consolidated net revenues and, to the extent that they are not hedged, our net income.
The detailed discussion of our consolidated Ñnancial results contained herein is intended to provide
information to assist investors, analysts and other parties reading this report in understanding the key operating
and Ñnancial measures summarized above as well as the changes in our consolidated results of operations from
year to year, and the primary factors that accounted for those changes.
Seasonality
The following table sets forth, for the periods presented, our total net revenues and the sequential
quarterly growth of these net revenues.
March 31 June 30 September 30 December 31
(In thousands, except percentages)
2002
Net revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $245,106 $266,287 $288,779 $ 413,928*
Current quarter vs prior quarterÏÏÏÏÏÏÏÏÏÏ 12% 9% 8% 43%
2003
Net revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $476,492 $509,269 $530,942 $ 648,393
Current quarter vs prior quarterÏÏÏÏÏÏÏÏÏÏ 15% 7% 4% 22%
2004
Net revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $756,239 $773,412 $805,876 $ 935,782
Current quarter vs prior quarterÏÏÏÏÏÏÏÏÏÏ 17% 2% 4% 16%
* Includes net revenues from PayPal subsequent to our acquisition on October 3, 2002.
As our business matures, transaction activity patterns on our websites increasingly mirror general
consumer buying patterns, both online and oÉine. We have historically experienced our strongest quarters of
sequential growth in the Ñrst and fourth Ñscal quarters. We expect this pattern of seasonality to continue.
Business Combinations
Through both domestic and international acquisitions, we have continued to expand eBay's global online
marketplace. The Ñnancial results of entities acquired in purchase transactions are reÖected in our consoli-
dated results from the eÅective dates of each acquisition. The aggregate purchase price for completed
acquisitions totaled $1.0 billion in 2004, $246 million in 2003, and $1.6 billion in 2002. We accounted for each
acquisition as a purchase transaction and, accordingly, each purchase price has been allocated to the tangible
and intangible assets acquired and liabilities assumed on the basis of their respective estimated fair values on
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