Lehman Brothers Conference
      December 5, 2007

                             ®
This presentation contains non-GAAP measures relating to the company's performance. You can find
  the reconciliation of t...
EBAY Investment Thesis

            • Great portfolio of businesses…
                • The leading position in 3 of the ma...
Great portfolio of businesses


                   Buy     Pay      Communicate



   Marketplaces          Payments      ...
Strong top line growth

                                                 45%                                              ...
Excellent non-GAAP EPS growth

                             46%                                                           ...
Strong free cash flow growth

                                           43%                           $2.05
             ...
Large and growing marketplaces business

                                                                        $3.9B YTD...
…Significant opportunities for growth



            GMV              +         Beyond GMV

• Buyer experience            ...
GMV growth

                           $43B YTD
                    $52B    13% Y/Y

              52%
             CAGR

...
Listening to buyers feedback …

       We asked our buyers: “What one thing would you
               suggest that eBay foc...
TnS: Feedback/Shipping


• Implemented Feedback 2.0   • Actionable data on seller quality
                                ...
Ease of use

    New Home Page            Visual Search            Best Match
 (launched in Sept 07)   (launched in Sept 0...
Improve conflict resolution

For Buyers:                          For Sellers:


•   Top buyer account                •   ...
Price elasticity testing

   Types of Pricing Promotions               What are we trying to learn?


Final Value Fees    ...
Beyond GMV … diversified revenue
streams


Classifieds                      Advertising**                  Shopping.com

 ...
Enabling the world’s conversations



• Strong brand

• Great product

• Global reach

• Thriving ecosystem
Enabling the world’s conversations


                                                                            96% Y/Y
 ...
PayPal vision




    The world’s
 favorite way to pay
    and be paid
Why buyers love PayPal

                   SAFE
                    “Shop without sharing”
                    Buyer prote...
Why merchants love PayPal

                   EASY TO USE
                    all-in-one solution
                    imme...
The “digitization of currency”?

                   60
                         Check

                   50

            ...
Strategically advantaged

          • superior value proposition
            – consumers: safe and simple
            – me...
PayPal a powerful payments brand

Q1 2007 PayPal “brand tracker” of a representative sample of US online shoppers:


     ...
Strong account and revenue growth

         PayPal accounts                                          Revenue growth rates
...
Large and diversifying revenue base

                                             $1.4B YTD
               Global revenues...
Goal: win e-commerce payments



        PREFERENCE




                     PRESENCE
Clear pathway to success


                              beyond
                            payments

                   o...
On eBay

                     Total Payment Volume ($B)                 Q307 $6.8B
                                       ...
On eBay: key tactics


                              Checkout


                            Localized sites

Expanded to 1...
On the web: Merchant Services

                                            Q307 $5.4B
                                    ...
On the web: segmented strategy


         number   volume   share

 large


medium



small
On the web: key tactics

Product         universal checkout




Marketing




Sales &
Distribution
On the web: large merchant integration
Other eBay marketplaces


       ~$10B un-penetrated opportunity




              .de
Beyond: innovating for the future


    • PayPal PayLater
    • Send money via Skype
    • PayPal Plug-In
    • PayPal lab...
PayLater




   PayLater:     No payments for 90 days available
                       with PayPal Credit



 point-of-sal...
Send money via Skype
PayPal Plug-in for toolbars




                Consumers can use PayPal to form-fill & pay
                 securely on a...
PayPal Labs

                                      MySpace:
                                  fundraising badge




      ...
Clear pathway to success


                              beyond
                            payments

                   o...
eBay Inc looking forward…

       Momentum                                             Headwinds
• Core eBay              ...
Summary


• Great portfolio of businesses: Buy, Pay and
 Communicate
• Focused on execution
• Strong financial model … dem...
eBay investor briefing at Lehman Brothers Conference, December 2007
Upcoming SlideShare
Loading in …5
×

eBay investor briefing at Lehman Brothers Conference, December 2007

2,633 views

Published on

5 December 2007

Published in: Economy & Finance, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
2,633
On SlideShare
0
From Embeds
0
Number of Embeds
22
Actions
Shares
0
Downloads
113
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

eBay investor briefing at Lehman Brothers Conference, December 2007

  1. 1. Lehman Brothers Conference December 5, 2007 ®
  2. 2. This presentation contains non-GAAP measures relating to the company's performance. You can find the reconciliation of those measures to GAAP measures in the tables of our earnings release which is available through our investor relations website located at http://investor.ebay.com/downloads/Reconciliation.pdf. This presentation may contain forward-looking statements regarding matters that involve risk and uncertainty, 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 for a variety of reasons, including our increasing need in established markets to grow revenues from existing users as well as from new users; an increasingly competitive e-commerce environment; the complexity of managing a growing company with a broad range of businesses; the impact of the company’s recently announced pricing and product changes; regulatory, tax, and litigation risks (including financial industry risks specific to PayPal and risks specific to Skype’s technology and to the VoIP industry); our need to upgrade our technology and customer service infrastructure to accommodate growth at reasonable cost while adding new features and maintaining site stability; our need to successfully extend our platforms to new countries and new types of merchandise and sellers; foreign-exchange-rate fluctuations; and the impact and integration of recent and future acquisitions. You can find more information about factors that could affect our results in our annual report on our Form 10-K and our 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. ® 2 eBay Inc. - Proprietary & Confidential
  3. 3. EBAY Investment Thesis • Great portfolio of businesses… • The leading position in 3 of the main activity areas online – Buy, Pay, Communicate • Strong growth characteristics • Inherent synergies within and across business units • Strong financial model … demonstrated track record • Financial capacity and flexibility to… • Reinvest for growth • Opportunistically reduce outstanding shares • In 2008, we will capitalize on our current momentum … while accelerating investments to defend and extend our leadership positions ® 3 eBay Inc. - Proprietary & Confidential
  4. 4. Great portfolio of businesses Buy Pay Communicate Marketplaces Payments Communications craigslist
  5. 5. Strong top line growth 45% $7.60-$7.65 CAGR* Q4 Guidance $5.97 $2.10 B - $2.15 B (in billions) $4.55 $3.27 Q1 – Q3 Actual $2.17 $5.49 B $1.21 2002 2003 2004 2005 2006 2007E Y/Y Revenue 62% 78% 51% 39% 31% 28%* Growth *CAGR and growth rate for 2007 based on midpoint of guidance range.
  6. 6. Excellent non-GAAP EPS growth 46% $1.47-$1.49 CAGR* Q4 Guidance $0.39 - $0.41 $1.05 $0.86 $0.61 Q1 – Q3 Actual $1.09 $0.38 $0.22 2002 2003 2004 2005 2006 2007E Y/Y EPS 78% 73% 61% 42% 21% 41% Growth *CAGR and growth rate for 2007 based on midpoint of guidance range.
  7. 7. Strong free cash flow growth 43% $2.05 $2.05 CAGR $1.7 $1.73 Q4 Implied Guidance $1.6 $1.57 $0.53 B (in billions) $1.0 $0.99 Q1 – Q3 Actual $1.52 B $.5 $0.51 $.3 $0.34 2002 2003 2004 2005 2006 2007E Y/Y FCF 75% 49% 95% 59% 10% 18% Growth
  8. 8. Large and growing marketplaces business $3.9B YTD 25% Y/Y $4.3B 53% CAGR Other MP Revenue • 38 global markets eBay Fixed Price Other** Revenue Fixed Price* • $57.6B GMV (TTM) Auctions* eBay Auction • 6M daily new listings $0.2B Revenue • 248M confirmed registered users 2002 2003 2004 2005 2006 * As of October 17, 2007
  9. 9. …Significant opportunities for growth GMV + Beyond GMV • Buyer experience • New formats improvements • New monetization models • Improve Trust & Safety • Price elasticity testing
  10. 10. GMV growth $43B YTD $52B 13% Y/Y 52% CAGR $3B 1999 2006
  11. 11. Listening to buyers feedback … We asked our buyers: “What one thing would you suggest that eBay focus on?” Shipping Feedback Ease of Use Trust & Safety Conflict Resolution Source: eBay Global User Satisfaction Study (US Data)—July 2006
  12. 12. TnS: Feedback/Shipping • Implemented Feedback 2.0 • Actionable data on seller quality # Selling ATOs (000s) (Detailed Seller Ratings) • Focus on Reducing Phishing Scams • Enforcement of Seller Non Performance • Anti-Counterfeit Efforts
  13. 13. Ease of use New Home Page Visual Search Best Match (launched in Sept 07) (launched in Sept 07) (launched in Oct 06) Bid Assistant Next Gen Checkout Next Gen My eBay (launched in May 07) (launched in Oct 07) (launched in Oct 07)
  14. 14. Improve conflict resolution For Buyers: For Sellers: • Top buyer account • Top seller account management management • Expanded CS offerings for all • Increased CS accessibility PowerSellers • Expanded buyer purchase • Opened PowerSeller program to protection programs include high unit volume sellers • Stronger proactive education on good buying experiences Combined CS organization … improved end-to-end experience
  15. 15. Price elasticity testing Types of Pricing Promotions What are we trying to learn? Final Value Fees Elasticity of Supply and Demand... –Impact on quality of inventory Insertion Fees –Abundance and velocity of trade Gallery Photos –Longer term impact on buyers and sellers Bundles {i.e Insertion Fee + Gallery –Impact of fee structure on sellers … Photo Fee} risk/reward tradeoff Category Specific
  16. 16. Beyond GMV … diversified revenue streams Classifieds Advertising** Shopping.com 106% 114% 29% 2006* 2007* 2006* 2007* 2006* 2007* *All data is YTD through Q3 **Advertising excludes “Other revenue”
  17. 17. Enabling the world’s conversations • Strong brand • Great product • Global reach • Thriving ecosystem
  18. 18. Enabling the world’s conversations 96% Y/Y growth • 246M registered users $98 Revenue (M) • 10M+ peak online users • 3B+ monthly call minutes • 4.4% of total international long distance minutes* • 28 languages and nearly every country Q405 Q307 * 2006 Telegeography
  19. 19. PayPal vision The world’s favorite way to pay and be paid
  20. 20. Why buyers love PayPal SAFE “Shop without sharing” Buyer protection SIMPLE Easy account set up “Express checkout” on the Internet Transactions take a few seconds
  21. 21. Why merchants love PayPal EASY TO USE all-in-one solution immediate account setup INCREASED SALES offering PayPal drives incremental revenues COST EFFECTIVE simple bundled pricing lower processing cost than the competition fewer fraudulent transactions
  22. 22. The “digitization of currency”? 60 Check 50 40 Credit percent 30 Cash Debit 20 Electronic 10 Prepaid 0 1990 2000 2010 payment volume by type (US) source: Nilson Report (reflects total economy; electronic payments represent ACH and check conversion)
  23. 23. Strategically advantaged • superior value proposition – consumers: safe and simple – merchants: lower cost & incremental sales Inc • customer acquisition • global payments platform • anti-fraud capabilities and data ACH • funding mix advantage • large merchant and consumer base
  24. 24. PayPal a powerful payments brand Q1 2007 PayPal “brand tracker” of a representative sample of US online shoppers: Awareness* Usage** Preference Aided Past 3 months “prefer” 99% 67% 29% 98% 37% 12% 88% 33% 17% 96% 12% 8% 21% 1% 1%
  25. 25. Strong account and revenue growth PayPal accounts Revenue growth rates Merchant services 34% yoy 164 M 61% 160 growth 140 120 100 On-eBay 80 60 17% 40 20 0 04 4 5 5 6 6 6 7 5 7 3 5 7 3 4 4 6 3 3 40 0 0 20 30 0 0 0 0 0 0 30 0 30 0 0 10 20 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 1 4 2 1 3 2 4 3 2 1 4 1 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Other facts for Q3: • $46.3B TPV (prior 12 months) • 177M transactions in Q3 • ~$3B in stored balances
  26. 26. Large and diversifying revenue base $1.4B YTD Global revenues 33% Y/Y $1.4B 49% CAGR Merchant Services $0.4B On eBay 2003 2004 2005 2006
  27. 27. Goal: win e-commerce payments PREFERENCE PRESENCE
  28. 28. Clear pathway to success beyond payments other eBay marketplaces on the web on eBay
  29. 29. On eBay Total Payment Volume ($B) Q307 $6.8B 18% Y/Y $24.5 $4.3 2002 2006 Global penetration 32% 40% 47% 53% 57% 61% in Q307
  30. 30. On eBay: key tactics Checkout Localized sites Expanded to 190 countries and 17 currencies Global service
  31. 31. On the web: Merchant Services Q307 $5.4B 61%Y/Y Total Payment Volume ($B) $13.3 $2.7 2002 2006
  32. 32. On the web: segmented strategy number volume share large medium small
  33. 33. On the web: key tactics Product universal checkout Marketing Sales & Distribution
  34. 34. On the web: large merchant integration
  35. 35. Other eBay marketplaces ~$10B un-penetrated opportunity .de
  36. 36. Beyond: innovating for the future • PayPal PayLater • Send money via Skype • PayPal Plug-In • PayPal labs • PayPal Mobile WAP
  37. 37. PayLater PayLater: No payments for 90 days available with PayPal Credit point-of-sale credit
  38. 38. Send money via Skype
  39. 39. PayPal Plug-in for toolbars Consumers can use PayPal to form-fill & pay securely on any e-commerce merchant – even if they don’t accept PayPal yet
  40. 40. PayPal Labs MySpace: fundraising badge Facebook: fundraising badge
  41. 41. Clear pathway to success beyond payments other eBay marketplaces on the web on eBay
  42. 42. eBay Inc looking forward… Momentum Headwinds • Core eBay • Competitive environment • Product/ TnS/ Pricing learnings intensifying • Need to do more/better/faster • Strong growth trajectory • PayPal Merchant Services • Business mix • Skype • Lower- margin businesses growing fastest • New formats / monetization • Accelerating investments continue to gain momentum • PayPal MS – build ubiquity • Classifieds • PayLater – accelerate adoption • Advertising • Skype – more user • StubHub engagement • Leverage / productivity ? Unknowns ? • Q4 Holiday Season • ’08 Economic Environment • FX
  43. 43. Summary • Great portfolio of businesses: Buy, Pay and Communicate • Focused on execution • Strong financial model … demonstrated track record • Great opportunities in 2008 and beyond

×