EBay (EBAY)

Payments

Our payments segment is comprised of two online payment brands — PayPal (which enables individuals and businesses to securely, easily and quickly send and receive payments online in approximately 190 markets worldwide) and Bill Me Later (which we acquired in November 2008, and which enables online U.S. merchants to offer, and U.S. consumers to obtain, through Bill Me Later’s banking relationships, transactional credit at the point of sale). Our payment networks build upon the existing financial infrastructure to create a global, real-time payment solution.

Payments Value Proposition

We believe our payment solutions make online commerce more efficient compared to traditional payment alternatives such as checks, money orders and credit cards via merchant accounts. Some of these traditional payment alternatives present various obstacles to the online commerce experience, including lengthy processing time, inconvenience and higher costs. Providing a more efficient and effective payment alternative for users is essential to creating a faster, easier and safer online commerce experience. Our online payment solutions allow customers to send and receive funds securely, easily and quickly and facilitate transactional credit for merchants and consumers.

Payments

Payments cost of net revenues increased $183.9 million, or 18%, in 2009 compared to 2008. The increase in cost of net revenues was primarily due to the inclusion of costs attributable to Bill Me Later (acquired November 2008) as well as the impact from our growth in net TPV. Cost of net revenues as a percentage of Payments net revenues increased during 2009 compared to 2008 due primarily to the impact of lower take rates and increased investment in our site operations, partially offset by a more favorable geographic and payment processor mix.

Payments cost of net revenues increased $269.9 million, or 35%, in 2008 compared to 2007. The increase in cost of net revenues was primarily due to a $158.8 million, or 29%, increase in payment processing. The increase in payment processing costs was driven primarily by an increase in net TPV driven by growth in our Merchant Services business and the increase in PayPal’s penetration of eBay Marketplaces GMV. Aggregate customer support and site operations costs increased $95.8 million in 2008 compared to 2007 due primarily to the development and expansion of our customer support and site operations due to growth in transaction volume. Payments cost of net revenues as a percentage of Payments net revenues during 2008 increased due primarily to growth in our Merchant Services net TPV and the inclusion of Bill Me Later (acquired November 2008).

Payments

The Payments business unit reported $795.6 million in revenue for the quarter, an increase of 28% year over year. Net total payment volume (TPV) for the quarter was $21.4 billion, an increase of 34% year over year. The growth in revenue and TPV was driven primarily by continued momentum in PayPal’s Merchant Services business and growth on the eBay platform. PayPal continued to increase its penetration on eBay and across other e-commerce platforms. The Payments business plans to remain focused on continuing consumer and merchant adoption on and off eBay, expansion of PayPal’s open platform initiative and ongoing integration of Bill Me Later onto eBay.

Payments

The Payments business unit reported a strong quarter with $688.1 million in revenue, an increase of 15% year over year. Net total payment volume (TPV) for the quarter was $17.7 billion, an increase of 19% year over year. The revenue and TPV increases were driven by continued consumer and merchant adoption of PayPal. The payments business continued to increase its penetration on eBay and across e-commerce. Active registered accounts reached 78.0 million, an increase of 19% year over year. The Payments business will continue to focus on the acquisition of new merchants, greater penetration into the Marketplaces business and the ongoing integration of Bill Me Later.

Payments

The Payments business unit reported a strong quarter with $669.3 million in revenue, an increase of 11% year over year. Net total payment volume (TPV) for the quarter was $16.71 billion, an increase of 12%. The revenue and TPV growth was driven by continued momentum in PayPal Merchant Services and the contribution made by Bill Me Later. Continued increases in PayPal penetration on eBay helped offset the negative impact of lower addressable gross merchandise volume (GMV) on revenue and TPV. Active registered accounts reached 75.4 million, an increase of 20% year over year. The Payments business will continue to focus on the acquisition of new merchants, greater penetration into the Marketplaces business and the integration of Bill Me Later.

Payments

The Payments business unit reported a strong quarter with $643.0 million in revenue, an increase of 11% year-over-year. Net total payment volume (TPV) for the quarter was $15.86 billion, an increase of 10%. The revenue and net TPV growth was driven by continued momentum in PayPal Merchant Services and the contribution made by Bill Me Later. Continued increases in PayPal penetration on eBay helped offset the negative impact of addressable gross merchandise volume (GMV) on revenue and TPV. Active registered accounts reached 73.1 million, an increase of 22% year-over-year. The Payments business will continue to focus on the acquisition of new merchants, greater penetration into the Marketplaces business and the growth of Bill Me Later.