eBay 2004 Annual Report Download - page 25

(3) All users, excluding users of Baazee.com, Half.com, Internet Auction, Marktplaats.nl and mobile.de, who bid on, bought, or listed an
item within the previous 12-month period. Includes users of eBay EachNet in China since the migration to the eBay platform in
September 2004. Active user information not available for periods prior to 2001.
(4) All listings on eBay's trading platforms during the year, regardless of whether the listing subsequently closed successfully.
(5) Total value of all successfully closed listings between users on eBay's trading platforms during the year, regardless of whether the
buyer and seller actually consummated the transaction.
(6) Cumulative total of all personal, premier, or business accounts opened, excluding accounts that have been closed or locked.
(7) All accounts that sent or received at least one payment through the PayPal system within the previous three-month period.
(8) Total number of payments initiated through the PayPal system during the year, regardless of whether the payment was actually sent
successfully, or was reversed, rejected, or pending at the end of the year.
(9) Total dollar volume of payments initiated through the PayPal system during the year, regardless of whether the payment was actually
sent successfully, or was reversed, rejected, or was pending at the end of the year.
The U.S. Marketplace segment includes our U.S. marketplace trading platforms, other than our PayPal
subsidiary. The International Marketplace segment includes our international marketplace trading platforms
excluding our PayPal subsidiary. The Payments segment includes our global payments platform consisting of
our PayPal subsidiary. The Payments segment reÖects the historical operations of our former Billpoint
subsidiary and of PayPal's operations for the periods subsequent to our acquisition of PayPal on October 3,
2002. We completed our planned wind-down of Billpoint in the Ñrst half of 2003.
Our net revenues result from fees associated with our transaction, advertising and other services in our
U.S. Marketplace, International Marketplace and Payments segments. Net transaction revenues are derived
primarily from listing, feature and Ñnal value fees paid by sellers and fees from payment processing services.
Net revenues from advertising are derived principally from the sale of banner and sponsorship advertisements
for cash and through barter arrangements. Other non-transaction net revenues are derived principally from
contractual arrangements with third parties that provide transaction services to eBay and PayPal users and also
from oÉine services provided by our former ButterÑelds and Kruse subsidiaries, which were divested in the
second half of 2002.
The successive year-over-year growth in net revenues from 2002 through 2004 was primarily the result of
increased auction and Ñxed-price transaction activity, reÖected in the growth in the number of our conÑrmed
registered users, user activity, listings, gross merchandise volume and payment transactions processed by
PayPal. Our net revenue growth during the year ended December 31, 2003 also reÖects a full year of payment
transactions processed by PayPal, which we acquired in October 2002.
eBay Marketplace Net Transaction Revenues
Total net transaction revenues from the U.S. and International Marketplace segments in aggregate
increased 48% in 2004, 66% in 2003, and 73% in 2002, compared to the respective prior year. The growth in
both U.S. Marketplace and International Marketplace segment net transaction revenues was primarily the
result of increased auction transaction activity, reÖected in the growth of the number of registered users, active
users, listings and gross merchandise volume. Gross merchandise volume from the U.S. and International
Marketplace segments together increased 44% in 2004 and 60% in both 2003 and 2002, compared to the
respective prior year. U.S. and International Marketplace segment net transaction revenues as a percentage of
user gross merchandise volume was 7.3% for 2004, 7.1% for 2003, and 6.8% for 2002. The increases in 2004
and 2003 reÖected increased feature adoption and the impact of our fee increases implemented in those years.
In addition, there was gross merchandise volume growth across all major categories, with the motors,
clothing & accessories, consumer electronics, home & garden, books/movies/music, sports, and computer
categories having the most signiÑcant dollar impact.
The number of active users on the eBay platform increased 36% during 2004 to 56.1 million at
December 31, 2004. Active users increased 49% during 2003 to 41.2 million at December 31, 2003, from
27.7 million at December 31, 2002. We believe that increases in user activity are largely the result of our
promotional eÅorts and our emphasis on helping our user community be successful through the introduction of
new site features and functionality and expanded trust and safety programs, in addition to our international
expansion.
23