eBay 2006 Annual Report Download - page 9

Download and view the complete annual report

Please find page 9 of the 2006 eBay annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

enhancements are focused on improving the user experience to increase buyer satisfaction and activity levels which
we believe will improve our conversion rates and, in turn, lead to higher GMV. For example, in 2006, we introduced
eBay Express, a specialty destination site for buyers looking to purchase new merchandise at fixed prices. eBay
Express targets existing registered users in an effort to increase their purchasing activity. Improvements to our Trust
and Safety policies are designed to ensure that buyers have a safe trading experience to drive repeat business.
Another element of our growth strategy is to build adjacent businesses. These adjacencies, which offer
opportunities for growth beyond our core GMV businesses, include new formats and new monetization models. We
will continue to grow our alternative format businesses — Shopping.com and our classifieds websites. In addition,
we intend to expand our monetization models through advertising partnerships and the development of a
pay-per-call platform.
Payments
Our global payments platform, PayPal, enables any individual or business with an email address to securely,
easily and quickly send and receive payments online. We believe our global payments platform makes online
commerce more efficient compared to traditional payment methods such as checks, money orders, and credit cards
via merchant accounts. These traditional payment methods present various obstacles to the online commerce
experience, including lengthy processing time, inconvenience, and high costs. PayPal delivers a product well-suited
for all online merchants and individuals by allowing them to send and receive online payments securely,
conveniently and cost-effectively. The PayPal network builds on the existing financial infrastructure of bank
accounts and credit cards to create a global, real-time payment solution.
PayPal Value Proposition
Providing more efficient and effective payment methods is essential to creating a faster, easier and safer online
commerce experience. Traditional payment methods such as checks, money orders and credit cards processed
through merchant accounts, all present various obstacles to the online commerce experience, including lengthy
processing time, inconvenience and high costs. Our PayPal online payments solution allows its account holders, as
well as users of other online businesses, to pay for their transactions securely, easily and quickly.
Buyer Value Proposition
PayPal enables buyers to pay merchants without sharing their sensitive financial information with them. To
make payments, buyers need to disclose only their email addresses to recipients. Many buyers wary of disclosing
financial information online find this high level of personal privacy attractive. Buyers also benefit from PayPal’s
buyer protection program.
Seller Value Proposition
PayPal offers online merchants an all-in-one payment processing solution that is less expensive than most
merchant accounts, offers industry-leading fraud prevention, and enables merchants to conduct business with
approximately 133 million PayPal customer accounts in over 100 markets. PayPal also offers merchants the ability
to maintain a direct relationship with their customers.
A merchant can open a PayPal account and begin accepting credit card payments within a few minutes.
Merchants are approved instantly for a PayPal account, and do not need to provide a personal guaranty, acquire any
specialized hardware, prepare an application, contact a payment gateway or encrypt customer data. Furthermore,
PayPal charges lower transaction fees than most merchant accounts, and charges no setup fees and no recurring
monthly fees.
The account-based nature of PayPal’s network helps us to detect and prevent fraud when funds enter the PayPal
network, as funds move within the network, and when they leave. Sellers can also reduce the risk of transaction
losses due to unauthorized credit card use and fraudulent chargebacks, if they comply with PayPal’s Seller
Protection Policy.
5