eBay 2006 Annual Report Download - page 51

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Marketplaces Net Transaction Revenues
Total net transaction revenues from Marketplaces increased 24% in 2006 and 36% in 2005, compared to the
respective prior year. The growth in net transaction revenues was the result of increased auction transaction activity,
reflected in the growth of the number of registered users, active users, listings and gross merchandise volume.
The number of registered users increased 23% during 2006 to 221.6 million at December 31, 2006. The
number of registered users increased 33% during 2005 to 180.6 million at December 31, 2005. The number of active
users on eBay.com increased 14% during 2006 to 81.8 million at December 31, 2006. Active users increased 28%
during 2005 to 71.8 million at December 31, 2005. We believe that increases in user activity are largely the result of
our promotional efforts, our emphasis on helping our user community be successful through the introduction of new
site features and functionality, our international expansion, and expanded trust and safety programs.
The number of items listed on eBay.com’s platforms increased 26% to 2.4 billion in 2006, from 1.9 billion in
2005, and increased 33% in 2005 from 1.4 billion in 2004. This percentage growth in listings was experienced
across our U.S. and international platforms. The number of stores increased by 55% and 51% in 2006 and 2005,
compared to the respective prior year, due to the cost effective nature for sellers to list items on our eBay Stores
format.
Gross merchandise volume increased 18% in 2006 and 30% in 2005, compared to the respective prior year.
The increases in 2006 and 2005 resulted from the domestic and international growth in the number of registered
users, active users and listings. In addition, there was gross merchandise volume growth across all major categories,
with the motors, consumer electronics, clothing & accessories, computers, home & garden, books/movies/music,
sports, and collectibles categories having the most significant dollar impact.
Marketplaces net transaction revenues earned internationally totaled $2.1 billion in 2006, $1.7 billion in 2005
and $1.2 billion in 2004, representing 50%, 49% and 46% of total Marketplaces net transaction revenues,
respectively. Marketplaces net revenues were positively impacted by foreign currency translation of approximately
$30.6 million and $6.7 million in 2006 and 2005, respectively. Changes in foreign currency rates will impact our
operating results and, to the extent that the U.S. dollar strengthens, our foreign currency denominated net revenues
will be negatively impacted.
In 2007, we expect Marketplaces net transaction revenues to continue to increase due to continued growth in
the global e-commerce market.
Payments Net Transaction Revenues
Payments net transaction revenues increased 40% in 2006 and 47% in 2005, compared to the respective prior
year. Payments net transaction revenues as a percentage of total net transaction revenues were 24% in 2006, 23% in
2005, and 21% in 2004. During 2006, over $37.8 billion in total payment volume was transacted on the PayPal
platform as compared to $27.5 billion during 2005 and $18.9 billion during 2004. As of December 31, 2006, PayPal
had 133.0 million accounts, compared to 96.2 million at December 31, 2005 and 63.8 million accounts at
December 31, 2004. Net transaction revenues as a percentage of total payment volume was 4% in all years
presented.
The growth in our Payments net transaction revenues, in all years, both in absolute terms and as a percentage of
total net transaction revenues, was primarily the result of increases in PayPal transaction volume driven by the
growth in PayPal Merchant Services transactions, the higher penetration of PayPal in the Marketplaces platforms
and growth in gross merchandise volume in the Marketplaces segment.
In 2006, our global Merchant Services total payment volume increased 59% compared to 2005, generating
total payment volume of $13.3 billion. In 2005, our global Merchant Services total payment volume increased 48%
compared to 2004, generating total payment volume of $8.4 billion. Furthermore, the growth in Payments net
transactions revenues in 2006 was positively affected by PayPal’s continued penetration of Marketplaces trans-
actions which increased to 57.2% in 2006 from 52.7% in 2005 and 46.7% in 2004. Payments net transaction
revenues have grown in connection with the increase in our Marketplaces gross merchandise volume which
increased to $52.5 billion in 2006 compared to $44.3 billion in 2005 and $34.2 billion in 2004.
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