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102 LORI RADULOVICH

A Trusted Online Community
To facilitate trading with unknown partners on the Internet, eBay Inc. provides a trusted
and safe trading environment by offering the following services: Feedback Forum, Safe
Harbor Program, Verified Rights Owner Program, Customer Support, Value-Added Tools
and Services, and Loyalty Programs.
Feedback Forum provides feedback, comments, and ratings on other users that can
be viewed by potential users when considering a purchase. Information is recorded up to
12 months and provides color-coded star ratings. EBay recently adopted a policy that no
longer permits sellers to leave negative feedback. The SafeHarbor Program provides
guidelines for resolving disputes among parties. Complaints are investigated and offenders
may receive warnings that are posted to users. Violators may be suspended from either bid-
ding on or listing items for sale. The Verified Rights Owner Program enforces intellectual
property owners’ rights by allowing owners to request the removal of listings that contain
infringements. This program protects intellectual property and reduces counterfeit trade.
EBay has also expanded specific Customer Support efforts, such as online self-help fea-
tures to increase efficiency of trades. EBay offers both “pre-trade” and “post-trade” Value-
Added Tools and Services to facilitate faster and safe trading and collections. Examples of
value added service tools include a calculator, shipping and UPS labels, PayPal, and so on.
Lastly, Loyalty Programs that provide cash back buyer rewards coupons were selectively
distributed to recognize large buyers to sustain customer loyalty.
StubHub is a leading U.S. ticket marketplace that allows users to buy and sell tickets
to sporting, events, theater, and other entertainment events.
EBay Inc. also offers online classified advertisements to members in hundreds of cities
and regions of the world, such as the Netherlands, Germany, and so on. Online classifieds
help people meet, share ideas, and offer goods/services at a local city or regional level.
Online advertising, mailing, and other services are offered to eBay’s strategic part-
ners and members. In 2008, eBay launched an advertising service that enables third parties
to advertise their eBay listings and eBay stores on eBay Web sites.
Acquired by eBay Inc. in 2005, Shopping.com is an online comparison shopping
site that offers comparisons on millions of products and product reviews. Shopping.com
is available in the United States, the United Kingdom, France, Germany, and Australia.
Revenue is earned from advertisers and retailers who pay a fee for directing shoppers to
their own sites.
Rent.com, acquired by eBay in 2005, is the most visited online apartment listing ser-
vice with over 20,000 listings in the United States. Rent.com lists apartment availability,
rental costs, virtual tours, roommate searches, and more. Revenue is earned from landlords
who pay a fee for renters who find apartments through Rent.com.
EBay plans to expand the Marketplaces segment by focusing on customers to
improve the buyer’s experience and reduce seller costs by enhancing products and ser-
vices, improving online trust and safety, enhancing customer support, extending product
offerings geographically and into new categories, and developing retention strategies.

Business Segment II: Payments
EBay’s Payments segment is composed of PayPal and Bill Me Later transaction services.
PayPal was founded in December 1998 and acquired by eBay Inc. in 2002. PayPal is a recog-
nized global leader in online payment solutions with 70 million active accounts. PayPal gener-
ated $60 billion in net total payment volume in 2008, an increase of 27 percent over 2007.
PayPal has captured 15 percent of U.S. e-commerce and 9 percent of global e-commerce
trade. International business processing accounted for 45 percent of PayPal’s total revenues for
2008. Higher fees earned on international transactions have provided eBay with higher rev-
enues and gross margins in comparison to revenues from domestic transactions.
PayPal is available to any online or offline individual or business with an e-mail
address and allows members to securely send and receive payments online securely with-
out sharing sensitive financial information. PayPal is accepted both online and offline in
190 markets worldwide and processes payments in 19 currencies. PayPal also reports a
very low percentage of 0.33 percent loss from fraud.