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

Buyers

PayPal P P l Classifieds Shopping.com StubHub Advertising

Sellers

Our company has evolved
2004
Classified, Advertising, all others

2008

Auctions
Auctions Fixed price

Fixed price

$3.3B $3 3B

Classified, Advertising, all others

$8.5B

Our markets are still in their early days
eCommerce Online Payments Online 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 2 3

Powering global eCommerce Unmatched advantages 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

Buyers

Sellers

• 150M+ unique visitors • 3M items bought daily • 50,000 categories

• 25M+ sellers • 150M+ live listings • Multiple formats

Robust and scalable technology gy platform

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

Auctions as gy strategy Open p marketplace Tweak 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 d l b i 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 2 3

Powering global eCommerce Unmatched advantages 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 Grocery
34

We’ve built a global Internet payment network

• 190 global markets g • 17 local language sites g g • 19 currencies

35

Unmatched advantages & network effects

Internet technology
PayPal network t k effects

Fraud expertise p

Closed-loop data d t

Global connections
36

Growth in active accounts

+23% TPV growing +16% 16%

2-3X f t 2 3X faster than competitors

49.4 49 $36 4
BillionMillion

57.3 57 $48 3
Million Billion

70.4 70 $60 4
Million Billion

2006

2007

2008
37

Growth in global Total Payment Volume (TPV)
TPV growing 1.5-2X faster 1 5 2X f t than eCommerce

$36
Billion

$48
Billion

$60
Billion

2006

2007

2008
38

Strong stated preference for online payments

#2 #1 #3 #2 #1
39

Tremendous payment volume opportunity TPV
TPV Growing 2-3X Faster than Competitors

$100120
BILLION

$36
Billion

$48
Billion

$60
Billion

2006

2007

2008

2011
40

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

41

Global eBay

42

Penetration growing on eBay

73-78% 73 78% 2011

eBay Sel Coverage ller

58%

2008

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 2004 4

200 2005 5

200 2006 6

200 2007 7

200 2008 8
45

eBay is a powerful partner
New active q accounts acquired 9.7M 7.8M
MS

Total Payment Volume $31B $22B

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
Merc chant Coverage

5%
SHARE

2008

Consumer Preference

48

Success across merchant segments
eCommerce volume PayPal TPV 2006-08 CAGR
Large merchants Small/ medium businesses Sole proprietors Total 130%

77%

71%

17% 6%

33% 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

$237
Billion

$305315
Billion

2008

2011 20

Share

9%

13-14%
51

…and in large International markets
North America International $460480
Billion

$237
Billion

$305315
Billion

$293
Billion

2008

2011 20

2008

2011 20

Share

9%

13-14%

2%

5-6%
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 & other devices Banks

Businesses with specialized payment needs

Governments

Social networks Non-profits

59

PayPal platform enables developers
225k+ developers

100k+ developers 660k+ developers

Platform

Millions of .NET developers

PayPal global Internet payments network

60

Early traction: Non-retail & mobile

61

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

$60B

$4-5 billion in revenue by 2011

$2.4 $2 4
BILLION

$4-5 $4 5
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 2 3

Powering global eCommerce Unmatched advantages Significant opportunity ahead

66

The world’s favorite way to world s p y 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

Buyers

Sellers

• 150M+ unique visitors • 3M items bought daily • 50,000 categories

• 25M+ sellers • 150M+ live listings • Multiple formats

Robust and scalable technology platform

An increasingly global footprint
North America
(46% of Total)

Europe
(45% of Total)

Asia Pacific
(9% of Total)

$2.6B $2 6B $1.9B $1.4B 2008 2005

$2.5B $ $0.5B 2008

2005

2008

$0.3B 2005

Broad choice of formats

Auctions A ti

Fixed P i Fi d Price

Advertising

Classifieds

Buyers
Vertical Experiences

Sellers

Unique advantages of Marketplace model
Superior flexibility Ultimate buyer choice Seller platform Customers win Wide global supply of products without ownership Surface best inventory regardless of format Enabling competition, but not competing against sellers Sellers compete so our 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 fallen behind • Optimizing for auctions, and constraining fixed price

Customer experience

• “Open Marketplace” philosophy slowed us down

Approach to change

• Too incremental – not driving the marketplace • Needed to “revamp” technology

Our three year journey

2008
Fix the foundation

2009

2010+

• enhance trust • improve selection • drive great deals on our site

Position f g P iti for growth th
• transform the user experience g gy • innovate through technology • grow our complementary formats

2008 Laying the L i th ground work. d k

In 2008, we began to fix the foundation
Trust standards
• New feedback system • Surface highest trust sellers in search

User experience & search

• Better deals “race to the top” in search • 4X in listings duration for fixed price

Seller Incentives

• Created incentives for high quality • Started risk-free pricing

Our trusted sellers are doing well…
More trusted sellers… Contributing to more of our GMV… Growing faster than eCommerce…
eCommerce

49%

27%
26%

trusted sellers

24%

12%
4% -6%

17%

Q4 ‘07 07

Q4 ‘08 08

Q1 ‘08 08

Q4 ‘08 08

Q3 ‘08 08

Q4 ‘08 08
(ex. Vehicles)

% of Sellers with 4.8+ DSRs

% of GMV from 4.8+ DSR sellers

GMV Growth Y/Y

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)

151 122 29
Q4 ‘08

Fixed Price Auctions

119 90 29
Q4 ‘07

Lower shipping costs = better value for buyers
% of listings offering free shipping

30%

20%

10%

0% Q1 ‘08 Q2 ‘08 Q3 ‘08 Q4 ‘08

Necessary… Y N Yes Enough to Win… No

In 2009 we’re taking bolder actions
Trust standards t d d
• First contact resolution for top buyers • eBay protection for top buyers (US, UK) • Increasing exposure for high-quality sellers

User experience & search

• Optimize new search platform • Product-based experience highlights value Product based • Enabling multiple-SKU listings • Integrate local classifieds listings g g

Seller S ll Incentives

• Eliminating upfront fees for C2C sellers (UK) • 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
Used Liquidation Small retail Large retail

Big business

Secondary Market ~$500B

Inventory: Small business tibl • C ll Collectible • Vintage • Pre-Owned

Consumer
Market opportunity eBay today

Inventory: • Out of season • Outlet inventory • Overstock/returns • Liquidation inventory

Inventory: • Out of season • Some new in i season

Secondary market: large, compelling opportunity
Consolidating this inventory creates step-change in deals and selection for our buyers

~$500B Market
Off-price retailers Outlets Liquidators Wholesalers

A Marketplace is ideal to win the secondary market
Secondary market Inefficient pp y supply chains Marketplace model
• Absorbs volatile supply • Moves deep-SKU p

Items of uncertain value

• Sellers can test market price • Multiple formats to drive velocity

Buyers looking foremost for g great deals

• Best deals with reliable service • Search brings it all together

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

More relevant first item

Sorted by best y match

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 $140

Seller 3 • $139.95

$135

Seller 2 • $141.89

Seller 4 • $136.95 $136 95

$130 $125

Seller 3 wins! • $128.97

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 iPod Nano Brand New Latest iPod Nano New, New Open Box Prior Gen iPod Nano Brand New All generations iPod Nano 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

Velocity y

• Best channel for velocity and cash flow • Steering traffic to our best sellers

Efficiency

• Increasing operational efficiency - Reduce contacts via better trust - Tools for shipping and tracking - Seller dashboard for better insights • Release management and g communications

Reliability

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 i i 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

2009 Priorities

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

Catalogs: bringing structure …

UPC code

Bought B ght catalog

… to unstructured data

… to unstructured data

Big pictures

“Satin floral accents”

eBay s eBay’s Catalog g
Bringing structure to unstructured data

2009 Priorities

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

User experience

User experience

User experience: visual browse

“More like this color” color

“More like this style”

User experience: category customization

2009 Priorities

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

Opening eBay.com to developers

Native on eBay B

Transforming technology at eBay

2008
Search & Platform

2009

2010+

• 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

46% CAGR

$270M

$86M
2005 2008

Classifieds market: large, growing, complementary
Global online classifieds market size
Services, dating, jobs & housing Vehicles, goods

$22B
Complementary to eBay

$17B
2008
Sources: Gerson Lehman Group Analysis - August 2008; eMarketer; Collins Steward LLC Report - Nov 2008; Internal estimates

2010

Classifieds is a strong global opportunity

Canada d #1

Netherlands #1 United Kingdom #1

Denmark #1 Germany #1

Italy Spain #2 #1 Australia A t li #2

We are #1 or #2 in 8 major markets

Multiple ways to monetize Classifieds
Insertion Fees
Job posting fees

Feature Fees
Home page featured

Advertising
CPC advertising

High value goods CPM advertising

Auctions A ti

Fixed P i Fi d Price

Advertising

Classifieds

Buyers
Vertical Experiences

Sellers

We are reshaping the Marketplaces business
Marketplaces revenue
Auctions Fixed price Advertising Classifieds Other

$5.6B $5 6B $3.5B

2005

2008

We are reshaping the Marketplaces business
Marketplaces revenue
Auctions Fixed price Advertising Classifieds Other

$5-7B $5.6B $5 6B
Auctions stabilizes but trails the market

$3.5B

Fixed Price 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

1 2 3

Transforming our Marketplace... Marketplace Fixing the foundation Focusing where we can win… g Secondary market 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 F Wh t’ Free? ?
• Skype-to-Skype calls
• Subscriptions

What s What’s Paid?
• SkypeOut (pay as you go)

• Video Calling • Chat/IM • Conference Calling

• Online numbers • Voicemail • SMS

Skype is one of the fastest adopted technologies in history

With massive (and accelerating) usage
Skype Calling Minutes (billions)
of world’s international calling minutes

8%

100B Cumulative Minutes

20 16

14.2 14.8 14 2 14 8 10.9 10.8 10 9 10 8 9.8 7.5 75 9.5 11.9

2006

2007

2008

Remarkable global reach
US/CAN Europe E

52M

148M
APAC

147M

Rest of the World

59M

And a powerful business model p
Slightly ahead of eBay and PayPal at 5 years

Skype Revenue
($Millions) ($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 into the network & device

Paradigm change

Software based Software-based network & flexible devices

=
Voice Data

Means there is potential for Skype “everywhere” r

Unlocking massive benefits for users
Richer Experience Easier / Everywhere More Choices

Video-calling Chat, Voice, File Transfer are table-stakes t bl t k

Presence Unified Messaging Seamless device S l d i integration

Consumers buy data plan Select best-of-breed application PAYG, premium services

=
Voice Data

r r

r r

r r

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

The opportunity is massive i
Telecom has remained ~2% of HH income for the past 40 years
3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 1981
$300B EBITDA

Communication is a HUGE $1.4T market

1986

1991

1996

2001
Market size: Communication relative to Search and ecommerce ($ in Bn)

Source:Trends in Telephony Service from FCC (June 2005)

In 2008 we sharpened our focus on customers, with remarkable results t ith k bl lt

39% YoY Q4 08 Active Users A i U

72% YoY Q4 08 Engagement
(Calling Minutes per Active User)

Leading to Accelerating Revenue Growth

YoY Growth Rates (Revenue)
70% 60% 50% 40% 41% 30% 31% 20% 10% 0% Q1 08 Q2 08 Q3 08 Q4 08 33%

Organic* 38%

Reported
(Fx-impacted)

* Euro-denominated (Skype’s functional currency)

Higher VIDEO penetration led to more users, and more calling minutes d lli i t

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

Invest in

Mobile

Business

Platform

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 Better promote our paid products Increase revenue per paying user Monetize free

2.

3.

4.

$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
Why? Benefits
Skype is already used in business
Reduce Cost Savings Productivity Business Travel
35%* of users say they use Skype for business p p purposes

Focus

Expand Business Product Offering

Develop Sales Channel

Build out Paid Support

35%

65%

*Based on a survey of U.S., CN, U.K of Skype users in March 2008

Platform: A Thriving Ecosystem g y

190 Skype certified devices

users

Partnerships with world-class companies

15,000 Developers

We are starting a new chapter in our history

Act 1
2003 2008

Platform: Desktop/Laptop Revenue Stream: SkypeOut y Market segment: LD calling Main product: Voice Main region: Mature internet markets Main target user: Consumers

“One”

r r

Act 2
2009 2011

“Many”

• Platforms + Mobile • Diversified revenue streams • Business subscriptions • Market segments + Collaboration • Products + Video • Regions + Emerging • Targets + Business

r r

2012 and b d beyond d

“Any” Any

• Platform • Balance of revenue streams • 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
eCommerce Online Payments Online 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 • ~13% share of global 13% eCommerce • ~86M active users • ~$60B TPV in 2008 • ~9% share of global 9% eCommerce • ~70M active users • More than 100B Skype calling minutes g • ~400M registered users

Proven and powerful business models Strong cash g generation… attractive margins

High growth g engine … good margins

Very high growth … good margins

… Generating excellent cash flows

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

A significantly diversified portfolio 2008 2004
Other MP Adjacencies Classifieds StubHub Other MP Adjacencies Text & Graphical Ads Classifieds BML

Auctions

Auctions Fixed price Fixed price

$3.3B $

$8.5B $8 5B

An expanding global footprint North America
48% of total

Europe
41% of total

Asia
11% of total

Up 30% Up 44% Up 149%

$3.2
Billion Billi 2006

$4.1
Billion Billi 2008

$2.4
Billion Billi 2006

$3.5
Billion Billi 2008

$0.4
Billion 2006

$1.0 $1 0
Billion

2008

Portfolio has generated excellent financials
Revenue Non-GAAP EPS*
$8.5B

Free cash flow*

23%
$7.7B $6.0 $4.6

26%
$1.05 $1.53 $1.71 $1 71

14%
$1.6B $1.7B $2.2 $2 2 $2.3B

$0.86

‘05

‘06

‘07

‘08

‘05

‘06

‘07

‘08

‘05

‘06

‘07

‘08

* Reconciliation in appendix

Attractive returns on invested capital
ROIC*

25% 23% 18%

27%

2005

2006

2007

2008

* Reconciliation in appendix

2008 was a tough year …
Full year performance was ok … 2008 1st half 2nd half

Top Line T Li Non-GAAP EPS* Free cash flow*
* Reconciliation in appendix

Up U 11% Up 12% $2.3B $2 3B

22% 25% 23%

2% 0% -9%

… but a brutal second half!

... 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 economic conditions… …will continue to grow rapidly over next 3 yrs

Q1 08

Q2 08

Q3 08

Q4 08

2008 2009 2010

2011

PayPal On eBay … ~$30B TPV
On-eBay Revenue
Decelerating along with eBay core GMV… …increased penetration will drive growth

Q1 08

Q2 08

Q3 08

Q4 08

2008 2009 2010

2011

PayPal: the business model
Great deals for merchants (Global take rate) Consumer funding choice (Transaction expense) (T ti ) Risk management (Fraud l (F d losses) )

‘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
40% range

BML/Adjacent payments Merchant services On eBay

30% range low single digits
2008 2009 2010 2011

2009 2011 2009-2011 CAGRs

Marketplaces: Broad choice of formats

Auctions A ti

Fixed P i Fi d Price

Advertising

Classifieds

Buyers
Vertical Experiences

Sellers

Marketplaces Fixed Price format … $22B GMV
Fixed price revenue . . . $2B 2008
with double digit growth… and huge growth potential

Double digit di it CAGR

Q1 08

Q2 08 Q3 08 Q4 08

2008

2009

2010

2011

fx-neutral excluding vehicles.

Marketplaces: Complementary formats
Advertising revenue

~2X 2008

Classifieds revenue

~2X 2008

2008

2011

2008

2011

Auction format: $23B GMV
Auction revenue . . . $2B 2008
A differentiated format… Smaller before stabilizing

CAGR in egat ve doub e negative double digit range

Q1 08

Q2 08 Q3 08 Q4 08

2008

2009

2010

2011

fx-neutral excluding vehicles.

Marketplaces: A state of transition Marketplaces revenue

$5 - $7B
in i 2011
Other Advertising Classifieds Vehicles V hi l Fixed i Fi d price

~2X 2008 levels

smaller before bigger Auction
2008 2009 2010 2011

Skype: Powerful standalone business Skype revenue

$1B +
in 2011

30% range

2009-2011 CAGR

2008

2009

2010

2011

Strengthening the portfolio

$10 $12B $ -$ $8.5B $8 5B
2008 REV 2011 REV

Auctions
Auctions

Fixed price p
MP MS&O Fixed price

MP MS&O

Building bigger and stronger B ildi a bi d t 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 smarter
Lower processing costs

$ $2B over 3 years y

Significant investment in estment
Customer retention / loyalty User experience / search / platform Improved trust / comprehension

Improved customer experience Organization O i i simplification

Operating smarter: we’ve simplified the org
Simplified organization by removing ~10% of HC y g

~$450
Million

Q3 ‘08 ending HC 08

3 yr savings

Operating smarter … improved customer experience
We spent $700M in 2008 on customer support …
Eliminate Root Causes Drive Down Contacts
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 consumer choice

Launching new L hi g products

Cards

Bank

Balance

ANNESSA: I don’t know where these images are

Higher g

Lower

… lowering processing costs … reinvestment/comprehension

Operating smarter to create capacity to invest
High growth lower margin business Operational excellence Reinvest

Operating M i L O i Margin Levers

FX

Business Mix

Ops Excellence

Reinvestment

Appendix

Reconciliation of GAAP to Non-GAAP EPS
(in millions) GAAP net income (loss) Stock-based compensation expense Employer payroll taxes on stock based compensation stock-based Amortization of acquired intangible assets (1) Restructuring Impairment of goodwill Gain on sale of equity investment Income taxes associated with certain non-GAAP entries Non-GAAP Non GAAP net income
Diluted net income per share:

December 31, 2004 $ 778.2 $ 5.8 17.5 17 5 65.9 (6.4) (31.5) 829.5 829 5 $

December 31, 2005

Twelve Months Ended December 31, 2006 1,125.6 $ 317.4 5.3 53 214.9 (171.6) 1,491.6 1 491 6 $

December 31, 2007 348.3 $ 301.8 6.9 69 223.7 1,390.9 (165.4) 2,106.2 2 106 2 $

December 31, 2008 1,779.4 352.1 3.1 31 264.1 49.1 (202.9) 2,244.9 2 244 9

$

1,082.1 $ 31.8 13.0 13 0 128.9 (2.3) (50.5) 1,203.0 1 203 0 $

GAAP net income per diluted share Non-GAAP net income per diluted share Shares used in non-GAAP diluted share calculation

$ $

0.57 0.61 1,368

$ $

0.78 0.86 1,394

$ $

0.79 1.05 1,425

$ $

0.25 1.53 1,376

$ $

1.36 1.71 1,313

(1) Includes amortization of acquired intangible assets within cost of net revenues and operating expenses.

Calculation of FCF
December 31, , 2004 $ 1,285.3 $ (292.8) $ 992.5 $ Twelve Months Ended December 31, , December 31, , 2005 2006 2,009.8 $ (338.3) 28.3 (126.4) , 1,573.4 $ 2,247.8 $ (515.4) 1,732.4 $ , December 31, , 2007 2,641.3 $ (454.0) 2,187.3 $ , December 31, , 2008 2,882.0 (565.9) 2,316.1 ,

(in millions) GAAP operating cash flow Purchases of property and equipment, net Proceeds from sale of corporate aircraft Payment of headquarters facility lease obligation Free cash flow

Calculation of RoIC
(in thousands, except percentages) Numerator components:
Non-GAAP operating income

Tax t T rate Non-GAAP operating income after tax Denominator components: Total assets Total cash, cash equivalents and investments Current liabilities

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 $ 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 33% 29% 30% 34% 28% 29% 28% 27% 29% 26% 25% 10% 24% 23% 22% 17% 24% $ 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 7,991,051 3,278,338 1,084,870 Q1'05 8,589,158 3,465,015 1,149,106 Q2'05 9,033,122 3,848,937 1,186,818 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 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 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 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

TTM Non-GAAP operating income after tax TTM average total assets TTM 95% off average cash, cash equivalents and iinves 9% h h i l d TTM average current liabilities ROIC

-

$ 846,030 7,422,501 3,078,354 30 83 4 1,012,921 25.4%

$ 945,386 7,937,476 3,223,111 3 223 111 1,058,852 25.9%

$ 1,016,938 8,496,195 3,340,358 3 340 3 8 1,132,802 25.3%

$ 1,129,618 9,405,672 3,318,486 3 318 486 1,234,504 23.3%

$ 1,193,991 10,321,169 3,366,062 3 366 062 1,353,832 21.3%

$ 1,240,647 11,253,387 3,469,757 3 469 1,467,892 19.6%

$ 1,318,296 12,139,387 3,459,673 34 96 3 1,674,665 18.8%

$ 1,402,661 12,912,980 3,377,148 3 3 148 1,924,986 18.4%

$ 1,518,940 13,339,193 3,486,641 3 486 641 2,078,113 19.5%

$ 1,633,595 13,697,718 3,536,980 3 36 980 2,207,540 20.5%

$ 1,827,615 14,005,030 3,622,670 3 622 6 0 2,518,232 23.2%

$ 1,997,188 14,385,614 3,858,237 3 8 8 23 2,694,011 25.5%

$ 2,096,556 14,696,072 3,974,641 3 9 4 641 2,806,418 26.5%

$ 2,198,685 14,916,387 4,100,390 4 100 390 2,957,551 28.0%

$ 2,226,524 14,892,187 4,097,313 4 09 313 3,062,769 28.8%

$ 2,158,933 14,975,132 3,687,468 3 68 468 3,161,622 26.6%

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%

(in thousands, except percentages)