Annual Report 2009
To Our Stockholders, In 2009, eBay Inc. became a stronger, more focused company. We communicated our three-year growth and operating targets in March 2009, setting bold goals for us to remain a global payments and e-commerce leader. During the year, we experienced significant growth in our payments business, which we believe is wellpositioned for success in the years to come. We strengthened our Marketplaces business by fixing fundamental issues that we believe were holding us back. And we sold a majority of Skype, allowing us to focus on our two core growth engines: payments and e-commerce. We did all of this while embracing the kind of operational and financial discipline that is the hallmark of a healthy, growing company. Our financial performance for the full year reflects these efforts. Despite the challenging environment in 2009, particularly in the first half of the year, we delivered $8.7 billion in revenues, a 2 percent increase from the prior year, and $1.83 of diluted EPS. Although our operating margin of 17 percent was lower compared to 2008, we delivered $2.9 billion in operating cash flow for the year. We connected more buyers and sellers than ever before through our core payments and e-commerce businesses in 2009. PayPal had an exceptional 2009, ending the year with net total payment volume (TPV) of $71 billion – a 19 percent increase over 2008 – and 81 million active registered accounts globally. Our Marketplaces business, led by eBay, grew its customer base to 90 million active users worldwide and took important steps in improving the fundamentals of its business, focusing on trust, value and selection. Our Marketplaces portfolio got stronger overall in 2009: Acquiring Gmarket, Korea’s leading online marketplace, gave us a leadership position in a key e-commerce market in Asia. StubHub, a leading online secondary tickets marketplace, continued its robust growth trajectory in 2009, as did our global classifieds businesses, which now includes DBA.dk/BilBasen, two leading online classifieds sites in Denmark that we acquired in 2008. In November 2009, we sold approximately 70 percent of Skype, allowing us to focus our energies on our two core businesses. At the same time, Skype got top-notch partners to help the company realize its full potential and eBay Inc. retained the ability to share in the company’s future success through an ongoing minority stake. PayPal grew even more ubiquitous in 2009, driving strong consumer and merchant adoption. By the end of 2009, PayPal supported 24 currencies in 190 markets – a truly global business. PayPal continues to leverage this unique global footprint by making it easier to send and receive payments across borders. In fact, cross-border trade now accounts for almost 25 percent of PayPal’s net TPV. PayPal’s merchant services division once again delivered strong growth both in the U.S. and worldwide. In 2009, for the first time, annual revenue and net TPV from PayPal’s merchant services business exceeded PayPal’s net TPV on eBay. And our momentum is predicated on a fundamental strength: Merchants generally realize higher transaction completion rates when PayPal is available as a payment option. In other words, consumers are more likely to complete the transaction when PayPal is used. PayPal also drove consumer adoption through Bill Me Later, which was integrated into the PayPal “wallet” on certain merchant sites in 2009, giving consumers more funding options. PayPal Student Accounts launched in the fall, helping to eliminate the hassle of everyday money exchanges between parents and teens. In 2009, PayPal became the first major payments platform to open up to third-party developers – a move that we believe will accelerate the adoption of PayPal and innovation in payments overall. Simply put, we are well on our way to making PayPal the preferred online payments provider around the world. In 2010, we will remain focused on driving consumer and merchant...
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