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100 LORI RADULOVICH

EBay Inc. encompasses eBay.com, the online marketplace, PayPal, which refers to the
online payments platform, and Skype, the Voice over Internet Protocol (VoIP) offered by
eBay’s subsidiary Skype Technologies S.A. Corporate revenues are earned primarily from
three business segments: (1) Marketplaces, (2) Payments, and (3) Communications. The
Marketplaces segment generates revenues from listings and fees paid by sellers; the
Payments segment revenues are generated from fees paid by merchants for payment process-
ing services through PayPal and Bill Me Later. The Communications segment generates
usage revenues from Skype VoIP for connection to traditional fixed and mobile telephones
under eBay’s subsidiary Skype Technologies S.A. Communications fees are assessed either
on a subscription basis or per minute charge for “SkypeOut minutes.” Additional revenues
are also earned from advertising and revenue-sharing contracts with third parties that provide
transaction services to eBay and PayPal account users.
In 2008, eBay.com generated approximately $59.7 billion in gross merchandise revenues
with consumer electronics accounting for the largest percentage of trade at $6.0 billion
or 17 percent, as indicated in Exhibit 1. PayPal earned approximately $30.4 billion of net
total payment revenues directly from eBay.com transactions, which represented approxi-
mately 51 percent of PayPal’s net Total Payment Volume during 2008 and 9 percent of global
e-commerce transactions revenue (eBay.com 2009a). Why is eBay so popular?

The eBay Marketplace
EBay transformed the Internet and the way many of us shop and do business worldwide.
EBay’s marketplace, or “marketspace,” is an online virtual trading platform for the sale of
goods and services by a community of users that comprises individual buyers and sellers,
as well as small business owners. EBay provides the virtual marketplace auction where the
market determines the price of items sold. EBay offers millions of items for trade through
auction-style and fixed-price trading in 39 markets and boasts 86.3 million active global
users as of 2008. In 2007, eBay sold nearly $60 billion goods, which equates to worldwide
eBay users trading more than $1,900 worth in goods every second. As of December 31,
2008, eBay Inc. employed approximately 16,200 people.

EXHIBIT 1 eBay Gross Merchandise Volume by Category

eBay
Annualized 4th Quarter 2008
Gross Merchandise Volume by Category
(in billions)

Consumer Electronics $6.90 17.51%
Computers $3.60 9.14%
Clothing & Accessories $5.00 12.69%
Home & Garden $3.80 9.64%
Collectibles $2.40 6.09%
Books/Music/Movies $2.60 6.60%
Sports $2.60 6.60%
Business & Industrial $2.10 5.33%
Toys $2.40 6.09%
Jewelry & Watches $2.20 5.58%
Camera & Photo $1.60 4.06%
Antiques & Art $1.20 3.05%
Coins & Stamps $1.20 3.05%
Tickets & Travel $1.80 4.57%
Total 100.00%

Source: Adapted from eBay.com 2009 Marketplaces Fact Sheet.