eBay 2009 Analyst Day

Agenda 8:15 INTRO AND DISCLOSURES Mark Rowen, VP of Investor Relations, eBay Inc. 8:20 EBAY: Leading eBay into the future John Donahoe, President & CEO, eBay Inc. 8:50 PAYPAL: Vision and potential for PayPal Scott Thompson, President, PayPal Thompson President 9:30 BREAK 10:00 MARKETPLACES: Vision and potential for Marketplaces Lorrie Norrington, President, eBay Marketplaces Stephanie Tilenius, SVP Global Product & General Manager, eBay North America Mark Carges, SVP & Chief Technology Officer, eBay Inc. g, gy , y 11:00 SKYPE Josh Silverman, President, Skype 11:30 11 30 LUNCH 12:30 FINANCE: Business model and operational excellence Bob Swan, Chief Financial Officer, eBay Inc. 1:00 GENERAL Q&A

Forward looking statement 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, including those relating to the company’s ability to grow its businesses, user base and user activity. Our actual results may differ materially from those discussed during this presentation 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; our ability to profitably expand our business model to new types of merchandise and sellers; the impact and integration of recent and future acquisitions; our increasing need to grow revenues from existing users in established markets; an increasingly competitive environment for our businesses; the complexity of managing a growing company with a broad range of businesses, our need to manage regulatory, tax, IP and litigation risks (including risks specific to PayPal and the financial industry, and risks specific to Skype’s technology and to the VoIP industry); and our need to upgrade our technology and Skype s 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 actual 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 this presentation is as of March 11, 2009, and we do not intend, and undertake no duty, to update this presentation. This presentation contains non-GAAP measures relating to the company's performance. You can find the reconciliation of those measures to the nearest comparable GAAP measures in the appendix at the end of this presentation.

Leading eBay into the future March 11, 2009

What we do: Connect buyers and sellers eBay PayPal P Pl Buyers Sellers Classifieds Shopping.com StubHub Advertising

Our company has evolved 2004 2008 Classified, Advertising, all others Auctions Auctions Fixed price Fixed price $3.3B $3 3B Classified, Advertising, $8.5B all others

Our markets are still in their early days Online Online eCommerce Payments Communications $1.4T $ $0.6T $0.4T 2008 future 2008 future 2008 future

And markets differ: Multiple winners in shopping: Few winners in payments Shopping Payments

Online consumer behaviors continue to change Our focus yesterday today tomorrow

How we will win

PayPal Highlights 1 Powering global eCommerce 2 Unmatched advantages 3 Significant opportunity ahead g pp y

What to expect from PayPal • A second “core” … will be bigger d ill b bi than eBay Marketplace • The leading global online payment network k

Marketplaces

Our starting point: World’s largest marketplace Sellers Buyers • 25M+ sellers • 150M+ unique visitors • 150M+ live listings • 3M items bought daily • Multiple formats • 50,000 categories Robust and scalable technology gy platform

Piercing the myths eBay Playbook Customer-driven innovation Auctions as Auctions as one of strategy gy several formats Open p Managed g marketplace marketplace Tweak the model Transform the model

eBay Highlights 1 Focus where we can win: “Secondary Market” 2 Transform our Marketplace 3 Grow complementary formats

What to expect from eBay We are creating the “new eBay” and will win in the huge Secondary market This will take time hi ill k i • 2009: growth expected to be slower than the market • 2010: growth expected to be with the market • 2011: growth expected to be faster than the market

Skype Highlights 1 Accelerating user growth and outstanding fundamentals 2 Attacking an enormous opportunity, positioned to win 3 Business is getting stronger and more valuable

What to expect from Skype Strong standalone business … St t dl bi one of fastest growing in history g g y We ll We’ll ensure it s successful & it’s realizes best value

Operating differently across the company • Customer driven • Unlocking technology • Operating discipline

Summary • Connecting buyers and sellers … in innovative ways • PayPal: Leading online global payment network • eBay Marketplace: Win in global secondary market • Skype: Great standalone, we will maximize its potential and value • Unlocking Technology to innovate for User Experiences •A Accountable, disciplined t bl di i li d

The Global Internet Payment Network y March 11, 2009 24

An evolving industry 1 Powering global eCommerce 2 Unmatched advantages 3 Significant opportunity ahead 25

26

Traditional payments not designed for the web Helga Review & Complete 27

Traditional payments not designed for the web Helga •F d t Fraudsters • ID theft 28

Traditional payment networks are limited 29

Worldwide accessibility 30

Enabling small sellers Blake 31

Enabling large merchants across the web or 32

Solving consumer payment problems Personal Payments Marsha Ali 33

Solving consumer payment problems Personal Payments Marsha Ali Erica 34 Grocery

We’ve built a global Internet payment network • 190 global markets g • 17 local language sites gg • 19 currencies 35

Unmatched advantages & network effects Fraud Internet expertise p technology PayPal network t k effects Global Closed-loop connections data dt 36

Growth in active accounts +23% TPV growing 2-3X f t 2 3X faster +16% 16% than competitors $36 4 49.4 49 $48 3 57.3 57 $60 4 70.4 70 BillionMillion Million Million Billion Billion 2006 2008 2007 37

Growth in global Total Payment Volume (TPV) TPV growing 1.5-2X faster 1 5 2X f t than eCommerce $36 $48 $60 Billion Billion Billion 2006 2007 2008 38

Strong stated preference for online payments #2 #1 #3 #2 #1 39

Tremendous payment volume opportunity TPV Growing 2-3X TPV Faster than Competitors $100- 120 BILLION $36 $48 $60 Billion Billion Billion 2006 2007 2008 2011 40

How we’ll get there Global eBay Global Adjacent Merchant payments Services 41

Global eBay 42

Penetration growing on eBay 73 78% 2011 73-78% eBay Sel Coverage 58% 2008 ller SHARE Consumer Preference 43

Significant opportunity in international markets 2008 eBay aGMV & PayPal penetration ( c d g S pp g (Including Shipping & Handling) d g) $29B $24B 79% 41% North America International 44

Share gains across eBay markets PayPal penetration in eBay markets (%) 100 80 60 40 20 200 200 200 200 200 2004 2005 2006 2007 2008 4 5 6 7 8 45

eBay is a powerful partner New active Total Payment accounts acquired q Volume $31B 9.7M 7.8M $22B MS eBay 1H 2007 2H 2008 1H 2007 2H 2008 46

Global Merchant Services 47

Gaining share in Global Merchant Services 8-9% 8 9% 2011 chant Coverage 5% 2008 SHARE Merc Consumer Preference 48

Success across merchant segments PayPal TPV eCommerce volume 2006-08 CAGR Large 130% merchants 77% Small/ 71% medium businesses 17% Sole 33% proprietors 6% Total 54% 49

Serving the worlds largest online brands PP # of top 50 online merchants 21 14 8 18 30 50

Share gain opportunity in North America… North America $305- 315 $237 Billion Billion 2011 20 2008 Share 13-14% 9% 51

…and in large International markets North America International $460- 480 Billion $293 $305- Billion 315 $237 Billion Billion 2011 20 2008 2011 20 2008 Share 2% 13-14% 5-6% 9% 52

Bill Me Later complements PayPal • Helps PayPal drive coverage & preference • Helps merchants drive sales 53

Sales lift for merchants Sales lift through promotional offers 54

Fast, convenient, secure credit for consumers 55

Structural advantage in risk management Credit card $$$$$ $ $$ 56

Significant PayPal – BML synergies Grow eBay GMV Accelerate merchant sales cycle Speed Bill Me Later consumer acquisition Turn transaction expense into revenue Decrease Bill Me Later fraud losses Reduce Bill Me Later cost of capital 57

Adjacent payments 58

Many sectors need payment solutions Mobile & Banks other devices Businesses with specialized Governments payment needs Social networks Non-profits 59

PayPal platform enables developers 225k+ developers 100k+ developers 660k+ developers Millions of .NET developers Platform PayPal global Internet payments network 60

Early traction: Non-retail & mobile 61

Tremendous growth ahead Global Total Payment Volume $100-120B $100 120B Adjacent Payments y Global $60B Merchant M ht Services eBay 2008 2011

$4-5 billion in revenue by 2011 $2.4 $2 4 $4-5 $4 5 BILLION BILLION 2008 2011 63

Long-term high growth businesses 2009-10: 2009 10: margin decrease due to BML integration Medium term: margins return to 18-20% g Longer term: margin expansion as the business scales over investments 64

The Internet is becoming more mainstream 1.4B global Internet users g > 50% of users are in emerging markets Users spend 15 hours per week online eCommerce from 5% to 15-20% of retail 15 20% 65

An evolving industry 1 Powering global eCommerce 2 Unmatched advantages 3 Significant opportunity ahead 66

The world’s favorite way to world s py pay and be paid p 67

What is going on at eBay?

In Marketplaces we are • Creating a NEW eBay • Fixing our foundation by transforming the user experience and technology • Positioning to win the large opportunity in the g g pp y secondary market • Growing our complementary f i l formats eBay is about the largest selection of great deals in any format

Marketplace connects buyers and sellers globally Sellers Buyers • 25M+ sellers • 150M+ unique visitors • 150M+ live listings • 3M items bought daily • Multiple formats • 50,000 categories Robust and scalable technology platform

An increasingly global footprint North America Asia Pacific Europe (46% of Total) (9% of Total) (45% of Total) $2.6B $2 6B $2.5B $ $1.9B $1.4B $0.5B $0.3B 2008 2008 2008 2005 2005 2005

Broad choice of formats Fixed P i Fi d Price Auctions A ti Classifieds Advertising Buyers Sellers Vertical Experiences

Unique advantages of Marketplace model Superior Wide global supply of flexibility products without ownership Ultimate buyer Surface best inventory choice regardless of format Seller Enabling competition, but platform not competing against sellers Sellers compete so our Customers win buyers get the best deals

If your Marketplace is so advantaged … why aren t you aren’t g growing faster? g

By 2008, we had fallen behind • Customer experience had p Customer fallen behind experience • Optimizing for auctions, and constraining fixed price • “Open Marketplace” philosophy slowed us down Approach • Too incremental – to change not driving the marketplace • Needed to “revamp” technology

Our three year journey 2008 2009 2010+ Fix the foundation • enhance trust • improve selection • drive great deals on our site Position f g P iti for growth th • transform the user experience • innovate through technology g gy • grow our complementary formats

2008 Laying the L i th ground work. d k

In 2008, we began to fix the foundation • New feedback system Trust • Surface highest trust sellers in search standards • Better deals “race to the top” in search User experience & search • 4X in listings duration for fixed price • Created incentives for high quality Seller Incentives • Started risk-free pricing

Our trusted sellers are doing well… More trusted Contributing to more Growing faster than sellers… of our GMV… eCommerce… eCommerce 49% 27% trusted sellers 26% 12% 17% 24% 4% -6% Q4 ‘07 07 Q4 ‘08 08 Q1 ‘08 08 Q4 ‘08 08 Q3 ‘08 08 Q4 ‘08 08 % of Sellers with 4.8+ % of GMV from 4.8+ DSR GMV Growth Y/Y DSRs (ex. Vehicles) sellers Data shown is US only % of Sellers includes only sellers that have a DSR rating; Trusted sellers have 4.8+ DSRs GMV excludes vehicles, real estate and StubHub

Increased selection Average Daily Live Listings (Millions) 151 Fixed Price Auctions 119 122 90 29 29 Q4 ‘07 Q4 ‘08

Lower shipping costs = better value for buyers % of listings offering free shipping 30% 20% 10% 0% Q2 ‘08 Q3 ‘08 Q4 ‘08 Q1 ‘08

Necessary… Y N Yes Enough to Win… No

In 2009 we’re taking bolder actions • First contact resolution for top buyers Trust • eBay protection for top buyers (US, UK) standards tdd • Increasing exposure for high-quality sellers • Optimize new search platform User experience • Product-based experience highlights value Product based & search • Enabling multiple-SKU listings • Integrate local classifieds listings g g • Eliminating upfront fees for C2C sellers (UK) Seller S ll Incentives • Improving seller economics on eBay

We must stabilize, then grow our business 2008 2009 2010+ Fix the foundation Position for growth

Our focus: the secondary market Liquidation Used Small retail Large retail Secondary Market Big business ~$500B Inventory: Small business tibl • C ll Collectible • Vintage • Pre-Owned Inventory: • Out of season • Some new Consumer in i season Inventory: • Out of season Market opportunity • Outlet inventory • Overstock/returns eBay today • Liquidation inventory

Secondary market: large, compelling opportunity Consolidating this inventory creates step-change in deals and selection for our buyers ~$500B Market Off-price Wholesalers Liquidators Outlets retailers

A Marketplace is ideal to win the secondary market Marketplace model Secondary market Inefficient • Absorbs volatile supply supply chains pp y • Moves deep-SKU p Items of • Sellers can test market price uncertain value • Multiple formats to drive velocity Buyers looking • Best deals with reliable service foremost for • Search brings it all together g great deals

Transforming the user experience

Before: Auctions ending soonest

Before: Auctions ending soonest Sorted by time ending Less relevance High shipping costs

After: relevant, well-priced inventory from trusted sellers

After: relevant, well-priced inventory from trusted sellers Sorted by best y match More relevant first item Free shipping

Search experience that merges products and listings

New vertical experience for hard goods

New vertical experience for hard goods Inventory y sorted by condition Shows value and savings

Buyers can select from multiple SKUs for soft goods

Snapshot view for Clothing, Shoes and Accessories

Buyers can find local inventory from Classifieds Core search results Classifieds Sponsored links

Unique power of a marketplace Bose iPod docking station case study

Unique power of a marketplace Bose iPod docking station case study • Top search is “new in box new Fixed Price” • Price $50 lower than retail • Great seller

Unique power of a marketplace Bose iPod docking station case study • Consumer seller with 100% Feedback score is lli “barely i selling “b l used” d” • Auction price closed at 70% lower than retail l th t il

Trusted sellers compete to provide the best deals Garmin Nuvi 200w eBay sale history (10/19-11/10) Seller 1 • $142.89 $145 Seller 3 • $139.95 $140 Seller 2 Seller 3 Seller 4 • $141.89 $135 wins! • $136.95 $136 95 • $128.97 $130 $125

Deals are better than ever In the U.S., a new Tivo HD DVR costs an average of 12% less than competitiors

Daily Deals driving great value for consumers

Breadth of inventory Secondary Market Latest Latest Prior Gen All generations iPod Nano iPod Nano iPod Nano iPod Nano Brand New New, New Open Box Brand New Refurbs / Used

eBay is the best way to access the world’s inventory

eBay is the best way to access the world’s inventory Retail-like option: experienced sellers vetted by eBay

eBay is the best way to access the world’s inventory Marketplace option: great deals & value

eBay is the best way to access the world’s inventory Local option: connects buyers with nearby sellers

eBay is the best way to access the world’s inventory Advertising: shows what’s available across the web

We will continue to transform our user experience eBay will be: • A trusted, easy-to-use and rewarding shopping experience with different vertical experiences • Powered by search that integrates multiple formats, experiences and inventory • Positioned to capture the secondary market and support larger sellers

Becoming the channel of choice for web’s best sellers • Best channel for velocity and cash flow Velocity y • Steering traffic to our best sellers • Increasing operational efficiency Efficiency - Reduce contacts via better trust - Tools for shipping and tracking - Seller dashboard for better insights • Release management and g Reliability communications

A new day for technology at eBay

Top eBay technology questions “I thought you were going to fix search? search?” “What are you doing to y g improve the user p experience?”

2009 Priorities 1 Search 2 Catalog 3 User Experience Use xpe e ce 4 Platform

Search in a real-time marketplace All changes immediately reflected in search g y 80M+ from bids, price changes, listings, purchases, etc. Sophisticated navigation & refinement S hi i d ii fi Different for each of our 50,000 categories Unique mix of formats and inventory • Fixed price and auction • Vintage & collectible to liquidation & new out-of-season

Search in 2009 Improve relevance Data mining & machine learning Better sorting Best Match surfaces most relevant info Search as a platform S h l tf Foundation for custom shopping experiences pp g p across categories

Catalogs: bringing structure … UPC code Bought B ght catalog

… to unstructured data

… to unstructured data Big pictures “Satin floral accents”

eBay s eBay’s Catalogg Bringing structure to unstructured data

User experience

User experience: visual browse “More like this color” color “More like this style”

User experience: category customization

Opening eBay.com to developers Native on eBay B

Transforming technology at eBay 2008 2009 2010+ Search & Platform • Best Match • Project Echo • Product based experiences Product-based Catalog & User Experience • Onboard more product catalogs • Bring structure to unstructured data • Custom shopping experiences

Driving the technology agenda at eBay differently Technology driving strategy Innovation-driven, world-class Innovation driven world class software development p Agile, test-and-learn Agile test-and-learn, intensely customer-focused y development process

Growing our Formats

We’ll continue to grow formats like Classifieds Classifieds global revenue $270M 46% CAGR $86M 2008 2005

Classifieds market: large, growing, complementary Global online classifieds market size Services, dating, jobs & housing Vehicles, goods $22B Complementary $17B to eBay 2008 2010 Sources: Gerson Lehman Group Analysis - August 2008; eMarketer; Collins Steward LLC Report - Nov 2008; Internal estimates

Classifieds is a strong global opportunity Canada d Netherlands Denmark #1 #1 #1 Germany United Kingdom #1 #1 Italy Australia A t li #1 Spain #2 #2 We are #1 or #2 in 8 major markets

Multiple ways to monetize Classifieds Feature Fees Insertion Fees Advertising CPC advertising Home page featured Job posting fees High value goods CPM advertising

Fixed P i Fi d Price Auctions A ti Classifieds Advertising Buyers Sellers Vertical Experiences

We are reshaping the Marketplaces business Marketplaces revenue Auctions $5.6B $5 6B Fixed price Advertising Classifieds $3.5B Other 2005 2008

We are reshaping the Marketplaces business Marketplaces revenue $5-7B Auctions $5.6B $5 6B Auctions stabilizes but Fixed price trails the market Advertising Classifieds $3.5B Fixed Price Other grows faster than the market Other f Oth formats t grow faster than the market 2005 2008 2011

3 things to remember

A New eBay Transforming our Marketplace... Marketplace 1 Fixing the foundation Focusing where we can win… g 2 Secondary market 3 Growing our complementary formats g p y

One of the fastest growing 5 year-olds in history With accelerating growth, and outstanding gg g fundamentals Attacking an enormous opportunity, and positioned to win Business is getting stronger

Enabling the World’s Conversations

How we make money What s What’s Paid? What’s F Wh t’ Free? ? • SkypeOut (pay as you • Skype-to-Skype go) calls • Subscriptions • Video Calling • Online numbers • Chat/IM • Voicemail • Conference Calling • SMS

Skype is one of the fastest adopted technologies in history

With massive (and accelerating) usage Skype Calling Minutes (billions) 8% 100B Cumulative Minutes 20 of world’s international calling minutes 16 14.2 14.8 14 2 14 8 11.9 10.9 10.8 10 9 10 8 9.8 9.5 7.5 75 2006 2007 2008

Remarkable global reach Europe E US/CAN 148M 52M APAC 147M Rest of the World 59M

And a powerful business model p Slightly ahead of eBay and PayPal Skype Revenue at 5 years ($Millions) ($Milli ) 2004 and 2005 estimated based on SkypeOut billings

With Outstanding Fundamentals Skype Segment Margin • Negligible customer acquisition costs • Negligible capex/network maintenance costs • Pre funded Pre-funded accounts = negative working capital • Strong free cash flow conversion (FCF) ** Direct segment margin and does not include allocation for corporate costs

An historic time: Communication is moving from hardware to software Internet Hardwired Software based Software-based Paradigm change into the network & device network & flexible devices

= Voice Data Means there is potential for Skype “everywhere” r

Unlocking massive benefits for users Easier / Everywhere Richer Experience More Choices r r r r r r Presence Video-calling Consumers buy data plan Unified Messaging Chat, Voice, File Select best-of-breed Transfer are application Seamless device S l di table-stakes t bl t k PAYG, premium services integration = Voice Data

The opportunity to become the world’s leading world s communication software company.

The opportunity is massive i Telecom has remained ~2% of Communication is a HH income for the past 40 HUGE $1.4T market years 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% $300B 0.0% EBITDA 1981 1986 1991 1996 2001 Market size: Communication relative to Search and ecommerce ($ Source:Trends in Telephony Service from FCC (June 2005) in Bn)

In 2008 we sharpened our focus on customers, with remarkable results t ith k bl lt 72% 39% YoY YoY Q4 08 Q4 08 Active Users Ai U Engagement (Calling Minutes per Active User)

Leading to Accelerating Revenue Growth YoY Growth Rates (Revenue) 70% 60% Organic* 50% 38% 40% 41% 30% 33% 31% Reported 20% (Fx-impacted) 10% 0% Q1 08 Q2 08 Q3 08 Q4 08 * Euro-denominated (Skype’s functional currency)

Higher VIDEO penetration led to more users, and more calling minutes d lli it Video lli Vid calling increases engagement and utility i t d tilit

SUBSCRIPTIONS added a popular new paid product, product and increased engagement

We hit an inflection point in 2008

With Skype’s size, small changes make Sk ’i ll h k a HUGE difference Increasing penetration of paid products by 1 percentage point = $60m in revenue To be a billion dollar business we need our existing paying users to make just one more call per day!

Our St t O Strategy 2 Mobile Business Platform Invest in 1 Leverage our core consumer business 3 Build our mission critical infrastructure

Core CONSUMER is a $240B market 2008 Worldwide Telecom Market1 - Total Market: $1.4 billion $241B Fixed Voice Consumer

And we have a clear plan to attack it 1. 1 Continue driving new users 2. Better promote our paid products 3. Increase revenue per paying user 4. Monetize free

$602B Wireless Voice Market $602B Wireless Wi l Voice

Our Mobile Approach Availability A il bilit post-load tl d Device pre-load Operator partnerships

Skype is available for download yp today on several platforms Approximately 12 million downloads at the end of 2008

Skype’s p yp partnership with Hutchison 3 p 500K units sold, one of the most it ld f th t popular pre-pay handsets for 3 20% higher margin than 3’s average 79% of customers are new to 3

No Skype download required yp q Partnership with leading worldwide mobile handset h d t provider id Skype pre-loaded and integrated on select N series devices Available in some markets starting 2H 2009

Business is a $203B market $203B Fixed Voice Business

A compelling business offering g g Skype is already used in business Why? 35%* of users say they use Reduce Benefits Cost Savings Productivity Skype for Business Travel business pp purposes Focus Expand Build out Develop Business Paid Sales Product Support Channel 35% Offering 65% *Based on a survey of U.S., CN, U.K of Skype users in March 2008

Platform: A Thriving Ecosystem g y users 190 Skype certified devices Partnerships with 15,000 Developers world-class companies

We are starting a new chapter in our history

Act 1 2003 2008 Platform: Desktop/Laptop Revenue Stream: SkypeOut y Market segment: LD calling “One” Main product: Voice Main region: Mature internet markets Main target user: Consumers r r

Act 2 2009 2011 • Platforms + Mobile • Diversified revenue streams • Business subscriptions “Many” • Market segments + Collaboration • Products + Video • Regions + Emerging • Targets + Business r r

2012 and b d beyond d • Platform • Balance of revenue streams “Any” Any • M ltiple market segments Multiple • Established products • Regional ubiquity • Mature target markets r

What will our business look like in 2011? • We will more than double revenue • While maintaining segment margins of around 18-20% • With more diversified revenue streams (telecom service & (telecom, licensing, and advertising)

One of the fastest growing 5 year olds in history With accelerating growth and outstanding growth, fundamentals Attacking an enormous opportunity, and positioned to win Business is getting stronger

Our business model & operational excellence March 11, 2009

What you heard today… …What you can expect What o e pect from us i th f t f in the future

We play in very attractive markets Online Online eCommerce Payments Communications $1.4T $ $0.6T $0.4T 2008 future 2008 future 2008 future Source: External estimates & internal analysis

We have the three leading brands on the web • $5.6B Rev 2008 with • $2.4B Rev in 2008 with • $0.6B Rev in 2008 with 14% 06 08 CAGR 06-08 29% 06 08 CAGR 06-08 68% 06 08 CAGR 06-08 • ~$60B GMV 2008 • ~$60B TPV in 2008 • More than 100B Skype calling minutes g • ~13% share of global 13% • ~9% share of global 9% eCommerce eCommerce • ~400M registered users • ~86M active users • ~70M active users

Proven and powerful business models Strong cash g High growth generation… Very high engine … g attractive growth … good margins margins good margins … Generating excellent cash flows

M&A: Using financial strength to extend our reach Strengthen Extend Acquire geographic formats / key footprint p p products technologies g

A significantly diversified portfolio 2008 2004 BML StubHub Other MP Other MP Adjacencies Adjacencies Classifieds Text & Graphical Ads Classifieds Auctions Auctions Fixed price Fixed price $3.3B $ $8.5B $8 5B

An expanding global footprint North America Europe Asia 48% of total 41% of total 11% of total Up 30% Up 44% Up 149% $1.0 $1 0 $0.4 Billion $3.2 $4.1 $2.4 $3.5 Billion Billion Billi Billion Billi Billion Billi Billion Billi 2006 2008 2006 2008 2006 2008

Portfolio has generated excellent financials Non-GAAP Revenue Free cash flow* EPS* 23% $8.5B $7.7B $6.0 26% 14% $4.6 $2 2 $2.3B $2.2 $1.71 $1 71 $1.6B $1.7B $1.53 $1.05 $0.86 ‘05 ‘06 ‘07 ‘08 ‘05 ‘06 ‘07 ‘08 ‘05 ‘06 ‘07 ‘08 * Reconciliation in appendix

Attractive returns on invested capital ROIC* 27% 25% 23% 18% 2005 2006 2007 2008 * Reconciliation in appendix

2008 was a tough year … Full year performance was ok … 2008 1st half 2nd half Up U 11% 22% 2% Top Line T Li Non-GAAP Up 12% 25% 0% EPS* Free cash $2.3B $2 3B 23% -9% flow* … but a brutal second half! * Reconciliation in appendix

... and 2009 will be a challenging year • A tough economy • Turnaround effort continues in Marketplaces • Significant headwind from strong US dollar g g • Two acquisitions in 4Q 2008 … will be dilutive i dil i in 2009 • Strong balance sheet … but cash balances will earn less

Positioning for the future: Clear priorities • Capitalize on PayPal’s enormous potential PayPal s • Transition the core eBay platform for today’s consumer with alternative formats • Skype to be all it can be • Operating smarter … create capacity to invest

PayPal Merchant Services … ~$30B TPV Merchant services revenue Strong growth despite difficult …will continue to grow economic conditions… rapidly over next 3 yrs 2011 Q1 08 Q2 08 Q3 08 Q4 08 2008 2009 2010

PayPal On eBay … ~$30B TPV On-eBay Revenue Decelerating along with …increased penetration eBay core GMV… will drive growth 2011 Q1 08 Q2 08 Q3 08 Q4 08 2008 2009 2010

PayPal: the business model Great deals for Consumer funding choice Risk management merchants (Transaction expense) (T ti ) (Fraud l (F d losses) ) (Global take rate) ‘05 ‘06 ‘07 ‘08 Future ‘05 ‘06 ‘07 ‘08 Future ‘05 ‘06 ‘07 ‘08 Future stable declines stable / down … ~60% transaction margin business

PayPal: Capitalizing on enormous potential PayPal revenue $4 - $5B in i 2011 BML/Adjacent 40% range payments Merchant 30% range services low single On eBay digits 2008 2009 2010 2011 2009 2011 2009-2011 CAGRs

Marketplaces: Broad choice of formats Fixed P i Fi d Price Auctions A ti Classifieds Advertising Buyers Sellers Vertical Experiences

Marketplaces Fixed Price format … $22B GMV Fixed price revenue . . . $2B 2008 Double digit di it CAGR with double digit growth… and huge growth potential 2011 Q1 08 Q2 08 Q3 08 Q4 08 2008 2009 2010 fx-neutral excluding vehicles.

Marketplaces: Complementary formats ~2X ~2X Advertising Classifieds 2008 2008 revenue revenue 2008 2011 2008 2011

Auction format: $23B GMV CAGR in Auction revenue . . . $2B 2008 negative double egat ve doub e digit range A differentiated format… Smaller before stabilizing 2011 Q1 08 Q2 08 Q3 08 Q4 08 2008 2009 2010 fx-neutral excluding vehicles.

Marketplaces: A state of transition Marketplaces revenue $5 - $7B in i 2011 Other Advertising ~2X 2008 levels Classifieds Vehicles V hi l Fixed i Fi d price smaller before bigger Auction 2008 2009 2010 2011

Skype: Powerful standalone business Skype revenue $1B + in 2011 2009-2011 30% range CAGR 2008 2009 2010 2011

Strengthening the portfolio $10 $12B $ -$ 2011 REV $8.5B $8 5B 2008 REV Auctions Auctions Fixed price p MP MS&O Fixed price MP MS&O

Building bigger and stronger B ildi a bi dt portfolio will require investments … … we will need to operate smarter in order t f d our i d to fund investments … t t

Achieving full potential requires… Operating Significant $ $2B over 3 years y smarter investment in estment Customer Lower retention / loyalty processing costs User experience / search / platform Improved customer experience Improved trust / Organization O ii comprehension simplification

Operating smarter: we’ve simplified the org Simplified organization ~$450 by removing ~10% of HC y g Million Q3 ‘08 ending HC 08 3 yr savings

Operating smarter … improved customer experience We spent $700M in 2008 on customer support … Drive Down Contacts Eliminate Root Causes 2007 2008 $300M in savings … more satisfied customers …R i Reinvest i a b tt customer experience t in better t i

Operating smarter: Lower processing costs We spent $700M in 2008 in processing PayPal transactions … Providing P idi g Launching new L hi g consumer choice products ANNESSA: I don’t know Cards Balance Bank where these images are Higher g Lower … lowering processing costs … reinvestment/comprehension

Operating smarter to create capacity to invest Operational High growth lower Reinvest excellence margin business Operating M i L O i Margin Levers FX Business Ops Reinvestment Mix Excellence

Appendix

Reconciliation of GAAP to Non-GAAP EPS Twelve Months Ended December 31, December 31, December 31, December 31, December 31, 2004 2005 2006 2007 2008 (in millions) GAAP net income (loss) $ 778.2 $ 1,082.1 $ 1,125.6 $ 348.3 $ 1,779.4 Stock-based compensation expense 5.8 31.8 317.4 301.8 352.1 Employer payroll taxes on stock based compensation stock-based 17.5 17 5 13.0 13 0 5.3 53 6.9 69 3.1 31 Amortization of acquired intangible assets (1) 65.9 128.9 214.9 223.7 264.1 Restructuring - - - - 49.1 Impairment of goodwill - - - 1,390.9 - Gain on sale of equity investment (6.4) (2.3) - - - Income taxes associated with certain non-GAAP entries (31.5) (50.5) (171.6) (165.4) (202.9) Non-GAAP Non GAAP net income $ 829.5 829 5 $ 1,203.0 1 203 0 $ 1,491.6 1 491 6 $ 2,106.2 2 106 2 $ 2,244.9 2 244 9 Diluted net income per share: GAAP net income per diluted share $ 0.57 $ 0.78 $ 0.79 $ 0.25 $ 1.36 Non-GAAP net income per diluted share $ 0.61 $ 0.86 $ 1.05 $ 1.53 $ 1.71 Shares used in non-GAAP diluted share calculation 1,368 1,394 1,425 1,376 1,313 (1) Includes amortization of acquired intangible assets within cost of net revenues and operating expenses.

Calculation of FCF Twelve Months Ended December 31, , December 31, , December 31,, December 31, , December 31, , 2004 2005 2006 2007 2008 (in millions) GAAP operating cash flow $ 1,285.3 $ 2,009.8 $ 2,247.8 $ 2,641.3 $ 2,882.0 Purchases of property and equipment, net (292.8) (338.3) (515.4) (454.0) (565.9) Proceeds from sale of corporate aircraft - 28.3 - - - Payment of headquarters facility lease obligation - (126.4) - - - Free cash flow $ 992.5 $ 1,573.4 $ 1,732.4 $ 2,187.3 $ , , , 2,316.1 ,

Calculation of RoIC (in thousands, except percentages) Q4'04 Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 Numerator components: $ 313,859 $ 367,424 $ 406,390 $ 393,551 $ 448,070 $ 460,687 $ 460,427 $ 464,493 $ 575,007 $ 593,445 $ 594,664 $ 593,445 $ 754,979 $ 701,364 $ 700,487 $ 674,318 $ 667,958 Non-GAAP operating income Tax t T rate 33% 29% 30% 34% 28% 29% 28% 27% 29% 26% 25% 10% 24% 23% 22% 17% 24% Non-GAAP operating income after tax $ 209,658 $ 260,871 $ 286,233 $ 260,176 $ 322,338 $ 325,244 $ 332,889 $ 337,825 $ 406,703 $ 441,523 $ 447,544 $ 531,845 $ 576,276 $ 540,892 $ 549,673 $ 559,684 $ 508,685 Q4'04 Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 Denominator components: Total assets 7,991,051 8,589,158 9,033,122 9,626,043 11,788,986 12,568,535 13,250,251 13,463,118 13,494,011 13,920,051 14,361,157 14,786,812 15,366,037 15,046,305 15,021,625 14,240,157 15,592,439 Total cash, cash equivalents and investments 3,278,338 3,465,015 3,848,937 3,929,828 2,943,599 3,528,735 4,010,778 3,795,865 3,495,486 3,519,880 3,793,677 4,461,775 5,035,692 4,108,141 4,181,717 3,777,482 3,458,840 Current liabilities 1,084,870 1,266,792 1,484,935 1,681,508 1,719,405 2,220,685 2,518,395 2,250,571 2,328,643 3,272,867 3,099,579 3,080,432 3,006,234 2,854,733 3,705,087 1,149,106 1,186,818 TTM Non-GAAP operating income after tax - $ 846,030 $ 945,386 $ 1,016,938 $ 1,129,618 $ 1,193,991 $ 1,240,647 $ 1,318,296 $ 1,402,661 $ 1,518,940 $ 1,633,595 $ 1,827,615 $ 1,997,188 $ 2,096,556 $ 2,198,685 $ 2,226,524 $ 2,158,933 TTM average total assets - 7,422,501 7,937,476 8,496,195 9,405,672 10,321,169 11,253,387 12,139,387 12,912,980 13,339,193 13,697,718 14,005,030 14,385,614 14,696,072 14,916,387 14,892,187 14,975,132 TTM 95% off average cash, cash equivalents and iinves 9% h h il d - 3,078,354 30 83 4 3,223,111 3 223 111 3,340,358 3 340 3 8 3,318,486 3 318 486 3,366,062 3 366 062 3,469,757 3 469 3,459,673 34 96 3 3,377,148 3 3 148 3,486,641 3 486 641 3,536,980 3 36 980 3,622,670 3 622 6 0 3,858,237 3 8 8 23 3,974,641 3 9 4 641 4,100,390 4 100 390 4,097,313 4 09 313 3,687,468 3 68 468 TTM average current liabilities - 1,012,921 1,058,852 1,132,802 1,234,504 1,353,832 1,467,892 1,674,665 1,924,986 2,078,113 2,207,540 2,518,232 2,694,011 2,806,418 2,957,551 3,062,769 3,161,622 ROIC - 25.4% 25.9% 25.3% 23.3% 21.3% 19.6% 18.8% 18.4% 19.5% 20.5% 23.2% 25.5% 26.5% 28.0% 28.8% 26.6% (in thousands, except percentages) Full Year Ended December 31, 2005 2006 2007 2008 TTM Non-GAAP operating income after tax $ 1,129,618 $ 1,402,661 $ 1,997,188 $ 2,158,933 TTM average total assets 9,405,672 12,912,980 14,385,614 15,053,313 TTM 95% of average cash, cash equivalents and inves 3,318,486 3,377,148 3,858,237 3,906,756 TTM average current liabilities 1,234,504 1,924,986 2,694,011 3,149,213 ROIC 23.3% 18.4% 25.5% 27.0%

eBay 2009 Analyst Day

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