Scott Thompson September 17, 2009
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This presentation may make forward-looking statements relating to our future performance that are based on our current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to, statements regarding expected financial results for the third quarter of 2009, and anticipated future stability and growth in the Marketplaces business unit.
Our actual results may differ materially from those discussed in this call for a variety of reasons, including, but not limited to, the impact of recent global economic events and the global economic downturn; foreign-exchange-rate fluctuations; changes in political, business, and economic conditions; the impact and integration of recent and future acquisitions; the impact of divestitures; our increasing need to grow revenues from existing users in established markets; an increasingly competitive environment for our businesses; the complexity of managing an increasingly large enterprise, with a broad range of businesses, our need to manage regulatory, tax, IP and litigation risks (including risks specific to PayPal, Bill Me Later and the financial industry, and risks specific to Skype’s technology and to the VoIP industry); and our need to upgrade our technology and customer service infrastructure at reasonable cost while adding new features and maintaining site stability.
You can find more information about factors that could affect our operating results in our most recent annual report on our Form 10-K and our subsequent quarterly reports on Form 10-Q (available at http://investor.ebay.com). You should not unduly rely on any forward-looking statements, and we assume no obligation to update them. All information in the presentation is as of July 22, 2009, and we do not intend, and undertake no duty, to update this presentation.
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An evolving industry
1 Powering global eCommerce
2 Unmatched advantages
3 Significant opportunity ahead
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Unmatched advantages & network effects
Global connections
Internet technology
Closed-loop data
Fraudexpertise
PayPal network effects
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Growth in active accounts
Q208 Q209
$48 Billion
$60 Billion
TPV growing 2-3X faster than competitors
49.4 Million
57.3 Million
70.4 Million
+16%+23%
2006 2007 2008
36 llion
$48 Billion
$60 Billion
49.4 Million
57.3 Million
70.4 Million
+16%+23%
62.6 Million
75.4 Million
+20%
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2006 2007 2008
$36 Billion
$48 Billion
$60 Billion
Strong TPV growth with tremendous opportunity
TPV Growing 2-3XFaster than Competitors
$100-120BILLION
2011
$16.7b inQ209
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How we’ll get there
Global eBayGlobal eBayGlobal Merchant Services
Global Merchant Services
Adjacent paymentsAdjacent payments
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Penetration growing on eBay
Consumer Preference
eBay
Sel
ler C
over
age
2008
2011
SHARE
58%
73-78%
64.4% Q209global penetration
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$24B$29B
41%
79%
North America International
Significant opportunity in international markets
2008 eBay aGMV & PayPal penetration*
*Includes shipping and handling
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Gaining share in Global Merchant Services
Consumer Preference
Mer
chan
t C
over
age
5% 2008
2011
SHARE
8-9%
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Success across merchant segments
eCommerce volume
Largemerchants
Small/medium businesses
Soleproprietors
Total
PayPal TPV2006-08 CAGR
130%
71%
33%
77%
17%
6%54%
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PP # of top 50online merchants
21+
W Europe
Serving the worlds largest online brands
13+
25+Asia
US
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$293Billion
$460-480Billion
International
2008 2011
2% 5-6%
Opportunity in NA and International markets
2008 2011
$237Billion
$305-315Billion
North America
9% 13-14%Share
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Bill Me Later complements PayPal
• Helps PayPal drive coverage & preference
• Helps merchants drive sales
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BML risk management
Risk-Adjusted Margin**Avg. Customer
FICO ScoreNet Charge-Offs as %
of Receivables
*Gross receivables balance as of 6/30/09**We define Risk-Adjusted Margin as the annualized ratio of total revenues less cost of funds less net credit and fraud losses relative to average annualized loan receivables for the 3-month periodNote: Risk-adjusted margin for Q4’08 as shown in the Earnings Release captures data from the acquisition date (Nov. 7, 2008) to quarter-end, and as such is ~1.5pts higher than the full quarter’s risk-adjusted margin
• Risk-adjusted margin at 10.3%• Reduced consumer demand and
higher credit standards drove decline in average receivables
• Margin % and margin trend remain favorable to credit card industry results
• Continued trend of high-quality customer acquisitions
• Underwriting approach will remain cautious for foreseeable future
• Net charge-off rate at 11.1%• Credit write-offs have increased,
average receivables have declined
Portfolio Balance: $553M*
3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q093Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
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Grow eBay GMV
Accelerate merchant sales cycle
Speed Bill Me Later consumer acquisition
Significant PayPal – BML synergies
Turn transaction expense into revenue
Decrease Bill Me Later fraud losses
Reduce Bill Me Later cost of capital
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Mobile & other devices
Mobile & other devices
Social networksSocial networks
Businesses withspecializedpayment needs
Businesses withspecializedpayment needs
BanksBanks
Non-profitsNon-profits
GovernmentsGovernments
Many sectors need payment solutions
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Platform
660k+ developers
225k+ developers
100k+ developers
Millions of .NET developers
PayPal platform enables developers
PayPal global Internet payments network
Global Merchant Services
eBay
Adjacent Payments
$100-120B
$60B
Tremendous growth ahead: TPV
Global Total Payment Volume
2008 2011
18-26%
CAGR
Tremendous growth ahead: metrics
‘05 ‘06 ‘07 Future
Global take rateGreat deals for
merchants
Transaction expenseConsumer funding choice
Transaction LossesRisk management
stable declines stable / down
… ~60% transaction margin business
‘08 ‘05 ‘06 ‘07 Future‘08 ‘05 ‘06 ‘07 Future‘08
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Tremendous growth ahead: margins
2009-10: margin decrease due to BML integration
Medium term: margins return to 18-20%
Longer term: margin expansion as thebusiness scales over investments
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Tremendous growth ahead: revenue
2008
$2.4BILLION
2011
$4-5BILLION
2009-2011 CAGRs
On eBaylow single digits
Merchant Services30% range
BML/Adjacent pmts40% range
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An evolving industry
1 Powering global eCommerce
2 Unmatched advantages
3 Significant opportunity ahead