eBay 2007 Annual Report Download - page 62

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(2) All users, excluding users of Half.com, StubHub and Internet Auction Co., our Korean subsidiary, who bid on,
bought, or listed an item within the previous 12-month period. Users may register more than once and as a
result, may have more than one account.
(3) Listings on eBay Marketplaces trading platforms during the period, regardless of whether the listing subse-
quently closed successfully.
(4) Total value of all successfully closed items between users on eBay Marketplaces trading platforms during the
period, regardless of whether the buyer and seller actually consummated the transaction.
(5) All registered accounts that successfully sent or received at least one payment or payment reversal through the
PayPal system within the previous 12-month period.
(6) Total dollar volume of payments, net of payment reversals, successfully completed through the PayPal system
during the period, excluding the payment gateway business.
(7) Cumulative number of unique user accounts, which includes users who may have registered via non-Skype
based websites, as of the end of the period. Users may register more than once and, as a result, may have more
than one account.
Marketplaces Net Transaction Revenues
Total net transaction revenues from Marketplaces increased 22% in 2007 compared to 2006. The increase in
net transaction revenues was the result of growth in our GMV-based businesses as well as growth in our non-GMV-
based businesses (Shopping.com, Rent.com and our classifieds websites), which continued to grow faster than our
overall Marketplaces businesses. GMV increased 13% during 2007 compared to 2006, and was due primarily to an
increase in conversion rates and average selling prices, a weaker U.S. dollar, and inclusion of our StubHub results
(which we acquired in February 2007). GMV growth in 2007 occurred across all major categories, with the motors,
consumer electronics, home and garden, clothing and accessories and tickets having the most significant positive
dollar impact when compared to 2006.
Total net transaction revenues from Marketplaces increased 24% in 2006 compared to 2005. The increase in
net transaction revenues was due primarily to growth in our GMV-based businesses as well as growth in our non-
GMV-based businesses. GMV increased 18% during 2006 compared to 2005, primarily driven by an increase in
listings and higher average selling prices offset by lower conversion rates. GMV growth in 2006 occurred across all
major categories, with the motors, consumer electronics, clothing and accessories, computers, home and garden,
books/movies/music, sports, and collectibles categories having the most significant dollar impact when compared
to 2005.
Marketplaces net transaction revenues earned internationally were $2.7 billion in 2007, $2.1 billion in 2006
and $1.7 billion in 2005, representing 52%, 50% and 49% of total Marketplaces net transaction revenues,
respectively. Based on changes in foreign currency rates year-over-year, Marketplaces net revenues were positively
impacted by foreign currency translation of approximately $222.4 million, $30.6 million and $6.7 million in 2007,
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 2008, we expect Marketplaces net transaction revenues to continue to increase, driven by increased levels of
GMV and continued growth from our non-GMV-based businesses. In January 2008, we announced changes to our
fee structure, as well as changes to our seller incentives and standards and feedback system, on the Marketplaces
platforms in an effort to increase user activity, particularly in our three largest markets, the U.S., U.K. and Germany.
The reaction of our community of buyers and sellers to these changes, as well as the other factors discussed above
under “Financial Summary” could impact our revenue growth and may affect future trends.
Payments Net Transaction Revenues
Payments net transaction revenues increased 31% and 40% in 2007 and 2006, respectively, which was
consistent with our year-over-year increase in net TPVof 33% and 37%, respectively, in those periods. Payments net
transaction revenues have grown primarily as a result of growth in our Merchant Services business and the increase
in PayPal’s penetration of eBay Marketplaces GMV. Payments net transaction revenues continue to be derived
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