exv99w1

Exhibit 99.1

eBAY INC. ANNOUNCES THIRD QUARTER 2005 FINANCIAL RESULTS

- Company Reports Record Q3 Net Revenues of $1.106 Billion -
- Achieves Q3 GAAP Diluted EPS of $0.18 and Pro Forma Diluted EPS of $0.20 -
- Raises 2005 Net Revenues Guidance and Issues 2006 Guidance -

San Jose, CA, October 19, 2005 — eBay Inc. (Nasdaq: EBAY; www.ebay.com) reported financial results for its quarter ended September 30, 2005.

eBay reported record consolidated Q3-05 net revenues of $1.106 billion, up 37% year over year; operating income of $356.7 million, up 40% year over year, representing a 32% operating margin; and pro forma operating income of $393.6 million, up 44% year over year, representing a 36% pro forma operating margin.

Consolidated net income in Q3-05 was $255.0 million, or $0.18 per diluted share. eBay’s pro forma consolidated net income was $280.2 million, or $0.20 per diluted share. Consolidated net income and pro forma net income include a one-time charge of $16.6 million, or $0.01 per diluted share, from the final application of tax regulations requiring the inclusion of stock option expense in intercompany cost sharing arrangements.

These results exceeded the high end of the company’s guidance of $1.070 billion for net revenues, met the company’s guidance of $0.18 for GAAP earnings per diluted share and exceeded the company’s guidance of $0.19 for pro forma earnings per diluted share.

“We saw very strong growth across every part of our business in Q3,” said Meg Whitman, President and CEO of eBay. “It’s wonderful to see so much strength in our two largest marketplaces, the US and Germany. We're excited about the great momentum eBay and PayPal have going into the holiday shopping season.”

eBay also announced that Rajiv Dutta, the company’s chief financial officer, will transition to the new role of president of Skype after his successor is named. Dutta will work with Skype CEO Niklas Zennström and Whitman on Skype’s growth and integration across eBay and PayPal. Dutta will remain a member of eBay’s executive management team.

“Rajiv’s contributions to eBay’s success during the past seven years have been enormous,” said Whitman. “He’ll play an even bigger role in eBay’s future by helping Niklas and his team achieve Skype’s full potential.”

Key Financial and Operating Metrics

Consolidated Net Revenues — Consolidated net revenues totaled a record $1.106 billion in Q3-05, which represented an increase of 37% from the $805.9 million reported in Q3-04.

•

U.S. Marketplace Net Revenues — U.S. Marketplace net revenues totaled $449.5 million in Q3-05, representing 29% year-over-year growth.

•

International Marketplace Net Revenues — International Marketplace net revenues totaled $408.9 million in Q3-05, representing 43% year-over-year growth.

•

Payments Net Revenues — Payments net revenues totaled $247.1 million in Q3-05, representing 44% year-over-year growth.

Confirmed Registered Users — Cumulative confirmed registered users at the end of Q3-05 totaled 168.1 million, representing a 35% increase over the 125.0 million users reported at the end of Q3-04.

eBay Announces Q3-05 Earnings (cont.)

Active Users — Active users, the number of users on the eBay platform who bid, bought, or listed an item within the previous 12-month period, increased to a record 68.0 million in Q3-05, a 32% increase over the 51.7 million active users reported in the same period a year ago.

Listings — New listings totaled a record 458.6 million in Q3-05, 32% higher than the 348.0 million new listings reported in Q3-04.

Gross Merchandise Volume (GMV) — GMV, the total value of all successfully closed items on eBay’s trading platforms, was $10.8 billion, representing a 30% year-over-year increase from the $8.3 billion reported in Q3-04.

Total Payments Accounts — PayPal’s business had 86.6 million total accounts at the end of Q3-05, a 53% increase from the 56.7 million reported in Q3-04. Total payments accounts represents the cumulative total of all accounts opened, excluding accounts that have been closed or locked, and including users that made payments with PayPal but have not registered.

Total Payment Volume (TPV) — TPV, the dollar volume of payments initiated through the PayPal system, was a record $6.7 billion in Q3-05, a 44% increase from the $4.6 billion reported in Q3-04.

GAAP Operating Income — GAAP operating income increased 40% year over year to $356.7 million, or 32% of net revenues.

Pro Forma Operating Income — Pro forma operating income increased 44% year over year to $393.6 million, or 36% of net revenues. Pro forma operating income represents GAAP operating income adjusted to exclude certain items, primarily stock based compensation expense and related payroll taxes and amortization of acquired intangible assets.

GAAP Net Income — GAAP net income increased 40% year over year to $255.0 million, or $0.18 per diluted share.

Pro Forma Net Income — Pro forma net income increased 44% year over year to $280.2 million, or $0.20 per diluted share. Pro forma net income represents GAAP net income adjusted to exclude certain items, primarily stock based compensation expense and related payroll taxes, amortization of acquired intangible assets and income taxes related to these items.

Operating and Free Cash Flows — Operating cash flows increased 79% year over year to $491.7 million. Free cash flows, representing operating cash flows less net purchases of property and equipment of $42.2 million, totaled $449.5 million.

Key Category Performance* — Based on Q3-05 GMV, the following categories delivered $1 billion or more in worldwide annualized GMV: eBay Motors at $14.1 billion; Clothing & Accessories at $3.1 billion; Consumer Electronics at $3.0 billion; Computers at $3.0 billion; Books/Movies/Music at $2.5 billion; Home & Garden at $2.4 billion; Sports at $2.1 billion; Collectibles at $2.1 billion; Jewelry & Watches at $1.6 billion; Business & Industrial at $1.5 billion; Toys at $1.5 billion; and Cameras & Photo at $1.3 billion.


*		For further detail on the eBay Marketplace’s current annualized $1 billion categories, including trended data, please see the metrics section on eBay’s Investor Relations website at http://investor.ebay.com/fundamentals.cfm.

eBay Announces Q3-05 Earnings (cont.)

Fixed Price Trading — eBay’s fixed price trading contributed approximately $3.4 billion or 32% of total GMV during Q3-05, primarily from eBay’s “Buy It Now” feature.

eBay Stores — At the end of Q3-05, eBay hosted approximately 336,000 stores worldwide, with approximately 193,000 stores hosted on the U.S. site.

Consolidated Financial and Operating Summary

eBay reported record consolidated net revenues of $1.106 billion in Q3-05, representing a 37% year-over-year increase. Foreign currency translation resulted in a year-over-year benefit of approximately $3.1 million and, on a sequential basis, negatively impacted Q3-05 revenues by approximately $15.5 million.

Gross profit was $905.1 million in Q3-05, or 82% of net revenues, which is higher than the 81% reported in Q3-04, due primarily to an increase in our Payments segment gross margin.

Sales and marketing expenses totaled $293.7 million, or 27% of net revenues, up from the 26% reported in Q3-04. The percentage increase was primarily the result of international expansion and industry-wide increases in Internet marketing rates, partially offset by marketing efficiencies.

Product development expenses totaled $78.9 million, or 7% of net revenues, down slightly from the 8% reported in Q3-04.

General and administrative costs totaled $144.3 million, or 13% of net revenues, consistent with the percentage reported in Q3-04.

Income from operations totaled $356.7 million during Q3-05, a 40% increase over the $253.9 million reported in Q3-04. On a pro forma basis, income from operations totaled $393.6 million, a 44% increase over the $272.6 million reported in Q3-04. Foreign currency translation resulted in a year over year negative impact on both the GAAP and pro forma Q3-05 consolidated income from operations of approximately $1.2 million and, on a sequential basis, resulted in a negative impact to both GAAP and pro forma consolidated income from operations in Q3-05 of approximately $9.5 million.

Interest and other income, net, totaled $30.7 million in Q3-05, up from the $13.2 million reported in Q3-04. The increase was primarily the result of increased interest income earned on larger cash, cash equivalents, and investment balances.

The GAAP effective tax rate for Q3-05 was 34%, an increase from the GAAP effective tax rate of 30% for Q3-04, and an increase from the 29% for Q2-05. The pro forma effective tax rate for Q3-05 was 34%, an increase from the pro forma effective tax rate of 31% for Q3-04, and an increase from the 30% for Q2-05. The higher GAAP and pro forma effective tax rates for Q3-05 result primarily from a one-time $16.6 million charge related to the final application of tax regulations requiring the inclusion of stock option expense in intercompany cost sharing arrangements. Excluding this one-time charge, the Q3-05 effective tax rate would have been 30%.

eBay Announces Q3-05 Earnings (cont.)

The company reported $491.7 million in operating cash flows and $42.2 million of net purchases of property and equipment in Q3-05, resulting in free cash flows of $449.5 million. The company’s cash, cash equivalents, and investments totaled nearly $3.9 billion at the end of Q3-05.

Business Outlook

The following updated guidance reflects current business trends and assumed exchange rates. This guidance is based on a weighted average exchange rate of US $1.20 per Euro, which is consistent with prior guidance. The guidance reflects the acquisition of Skype Technologies SA (“Skype”) that closed on October 14, 2005 and the pending acquisition of VeriSign, Inc.’s payment gateway business which is expected to close in Q4-05. The guidance does not include the impact of any other potential acquisitions or the impact of expensing stock options under FAS 123(R) “Share-Based Payment.”

Fiscal Year 2005

Net Revenues — eBay now expects consolidated net revenues for 2005 to be in the range of $4.47 billion to $4.51 billion. In Q4-05, eBay now expects consolidated net revenues to be in the range of $1.245 billion to $1.285 billion. These Q4-05 estimates include $35 million from Shopping.com and $20 million from Skype. Excluding Shopping.com and Skype, this guidance represents a $10 million increase from our previous guidance reflecting strong business momentum.

GAAP Diluted EPS — eBay now estimates GAAP earnings per diluted share for the full year 2005 to be as high as $0.74. In Q4-05, eBay now estimates GAAP earnings per diluted share to be $0.16, which reflects dilution of $0.04 from Skype.

Pro Forma Diluted EPS — eBay now estimates pro forma earnings per diluted share for the full year 2005 to be as high as $0.83. In Q4-05, eBay now estimates pro forma earnings per diluted share to be $0.21, which reflects dilution of $0.01 from Skype.

Capital Expenditures — eBay continues to expect its capital expenditures to be in the range of $340 million to $400 million for the full year 2005, which amount to approximately 8% to 9%, respectively, of eBay’s guidance for net revenues. These expected capital expenditures for 2005 exclude the Q1-05 payment of a lease obligation for our headquarters facility of approximately $126 million.

Fiscal Year 2006

Net Revenues — eBay expects consolidated net revenues for 2006 to be in the range of $5.70 billion to $5.90 billion. This guidance includes expected net revenues from Skype of approximately $200 million.

GAAP Diluted EPS — eBay expects GAAP earnings per diluted share for the full year 2006 to be in the range of $0.81 to $0.86, including dilution of $0.12 from Skype.

Pro Forma Diluted EPS —eBay expects pro forma earnings per diluted share for the full year 2006 to be in the range of $0.96 to $1.01, including dilution of $0.04 from Skype.

eBay Announces Q3-05 Earnings (cont.)

Quarterly Conference Call

eBay will host a conference call to discuss third quarter results at 2 pm Pacific Time today. A live webcast of the conference call can be accessed through the company’s Investor Relations website at http://investor.ebay.com. In addition, an archive of the webcast will be accessible through the same link.

Non-GAAP Measures

To supplement the company’s consolidated financial statements presented in accordance with GAAP, eBay uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include pro forma net income, pro forma earnings per diluted share, pro forma operating income, pro forma operating margin, and free cash flows. These non-GAAP measures are provided to enhance investors’ overall understanding of the company’s current financial performance and the company’s prospects for the future. Specifically, the company believes the non-GAAP results provide useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of its core operating results. In addition, because eBay has historically reported certain non-GAAP results to investors, the company believes the inclusion of non-GAAP measures provides consistency in the company’s financial reporting. These measures should be considered in addition to results prepared in accordance with generally accepted accounting principles, but should not be considered a substitute for, or superior to, GAAP results. Reconciliation to the nearest GAAP measure of all non-GAAP measures included in this press release, can be found in the financial tables included on pages, 9, 10 and 11 of this press release.

About eBay

Founded in 1995, eBay pioneers communities built on commerce, sustained by trust, and inspired by opportunity. eBay enables ecommerce on a local, national and international basis with an array of websites – including the eBay Marketplace, PayPal, Kijiji, Rent.com and Shopping.com – that bring together millions of buyers and sellers every day.

Forward-Looking Statements

This press release contains forward-looking statements relating to the future performance of eBay and its consolidated subsidiaries. Those statements involve risks and uncertainties, and the company’s actual results could differ materially from those discussed. Factors that could cause or contribute to such differences include, but are not limited to: the company’s need to manage an increasingly large company with a broad range of businesses of varying degrees of maturity; the company’s need to increasingly achieve growth from its existing users as well as from new users in its more established markets; the company’s ability to deal with the increasingly competitive e-commerce environment, including competition for its sellers from other trading sites and other means of selling, and competition for its buyers from other merchants, online and offline; fluctuations in foreign exchange rates; the need to integrate, manage, and profitably expand the newly-acquired Skype business; the regulatory and competitive risks specific to Skype; the litigation, regulatory, credit card association, and other risks specific to PayPal as it continues to expand geographically; the company’s need to manage other regulatory, tax, and litigation risks even as its product offerings expand and its services are offered in more jurisdictions; the company’s ability to upgrade and develop its systems, infrastructure and customer service capabilities to accommodate growth at a reasonable cost; the company’s ability to maintain

eBay Announces Q3-05 Earnings (cont.)

site stability and performance on all of its sites while adding new products and features in a timely fashion; the company’s ability to profitably expand its model to new types of merchandise and sellers; and, the company’s ability to profitably integrate and manage recent and future acquisitions and other transactions. With the exception of the pending acquisition of VeriSign, Inc.’s payment gateway business, the forward looking statements in this release do not include the potential impact of any acquisitions that may be completed after the date hereof or the impact of expensing stock options under FAS 123(R) “Share-Based Payment.”

More information about factors that could affect the company’s operating results is included under the captions “Risk Factors That May Affect Results of Operations and Financial Condition” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by visiting the company’s investor relations site at http://investor.ebay.com. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to the company on the date hereof. eBay assumes no obligation to update such statements.


Investor Relations Contact: Media Relations Contact: Investor Information Request: Company News: Investor Relations Website:		Tracey Ford Hani Durzy 408-376-7493 http://www.businesswire.com http://investor.ebay.com		408-376-7205 408-376-7458

eBay Inc.
Unaudited Condensed Consolidated Balance Sheet
(U.S. Dollars In Thousands)


	December 31,		September 30,
	2004		2005
ASSETS
Current assets
Cash and cash equivalents	$	1,330,045	$	2,180,598
Short-term investments		682,004		888,783
Accounts receivable, net		240,856		274,238
Funds receivable from customers		123,424		210,593
Restricted cash and investments		155,405		33,256
Other current assets		379,415		403,525

Total current assets		2,911,149		3,990,993
Long-term investments		1,267,707		827,191
Property and equipment, net		709,773		762,413
Goodwill		2,709,794		3,529,895
Intangible assets, net		362,909		490,245
Other assets		29,719		25,306

	$	7,991,051	$	9,626,043

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	37,958	$	42,726
Funds payable and amounts due to customers		331,805		517,309
Accrued expenses and other current liabilities		421,969		523,584
Deferred revenue and customer advances		50,439		44,222
Short-term obligations		124,272		—
Income taxes payable		118,427		138,951

Total current liabilities		1,084,870		1,266,792
Deferred tax liabilities, net		135,971		298,197
Other liabilities		41,869		33,690

Total liabilities		1,262,710		1,598,679

Total stockholders’ equity		6,728,341		8,027,364

	$	7,991,051	$	9,626,043

eBay Inc.
Unaudited Condensed Consolidated Statement of Income
(U.S. Dollars In Thousands, Except Per Share Amounts)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2004			2005			2004			2005
Net revenues	$	805,876		$	1,105,515		$	2,335,527		$	3,223,542
Cost of net revenues		157,121			200,375			438,010			578,584

Gross profit		648,755			905,140			1,897,517			2,644,958

Operating expenses:
Sales and marketing		207,155			293,746			588,995			852,239
Product development		63,403			78,881			176,079			224,309
General and administrative		105,871			144,287			299,447			410,016
Payroll tax on employee stock options		1,957			2,291			12,289			9,582
Amortization of acquired intangible assets		16,456			29,199			46,188			77,516

Total operating expenses		394,842			548,404			1,122,998			1,573,662

Income from operations		253,913			356,736			774,519			1,071,296
Interest and other income, net		13,163			30,657			59,105			85,585
Interest expense		(2,236	)		(431	)		(6,614	)		(2,556	)

Income before income taxes and minority interests		264,840			386,962			827,010			1,154,325
Provision for income taxes		(80,749	)		(131,989	)		(248,103	)		(351,455	)
Minority interests		(1,742	)		(2	)		(6,063	)		(48	)

Net income	$	182,349		$	254,971		$	572,844		$	802,822


Net income per share:
Basic	$	0.14		$	0.19		$	0.44		$	0.59

Diluted	$	0.13		$	0.18		$	0.42		$	0.58

Weighted average shares:
Basic		1,323,145			1,357,239			1,314,456			1,350,836

Diluted		1,369,954			1,387,038			1,360,830			1,383,024

eBay Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Income
(U.S. Dollars In Thousands, Except Per Share Amounts)


	Three Months Ended									Three Months Ended
	September 30, 2004									September 30, 2005
				Pro Forma									Pro Forma
	Reported			Entries			Pro Forma			Reported			Entries			Pro Forma

Net revenues	$	805,876		$	—		$	805,876		$	1,105,515		$	—		$	1,105,515
Cost of net revenues		157,121			(59	) (a)		157,062			200,375			(201	) (a)		200,174

Gross profit		648,755			59			648,814			905,140			201			905,341

Operating expenses:
Sales and marketing		207,155			(36	) (a)		207,119			293,746			(396	) (a)		293,350
Product development		63,403			(189	) (a)		63,214			78,881			(1,224	) (a)		77,657
General and administrative		105,871			32	(a)		105,903			144,287			(3,504	) (a)		140,783
Payroll tax on employee stock options		1,957			(1,957	) (b)		—			2,291			(2,291	) (b)		—
Amortization of acquired intangible assets		16,456			(16,456	) (c)		—			29,199			(29,199	) (c)		—

Total operating expenses		394,842			(18,606	)		376,236			548,404			(36,614	)		511,790

Income from operations		253,913			18,665			272,578			356,736			36,815			393,551
Interest and other income, net		13,163			813	(d)		13,976			30,657			—			30,657
Interest expense		(2,236	)		—			(2,236	)		(431	)		—			(431	)

Income before income taxes and minority interests		264,840			19,478			284,318			386,962			36,815			423,777
Provision for income taxes		(80,749	)		(6,850	) (e)		(87,599	)		(131,989	)		(11,629	) (e)		(143,618	)
Minority interests		(1,742	)		—			(1,742	)		(2	)		—			(2	)

Net income	$	182,349		$	12,628		$	194,977		$	254,971		$	25,186		$	280,157


Net income per share:
Basic	$	0.14					$	0.15		$	0.19					$	0.21

Diluted	$	0.13					$	0.14		$	0.18					$	0.20


Weighted average shares:
Basic		1,323,145						1,323,145			1,357,239						1,357,239

Diluted		1,369,954						1,369,954			1,387,038						1,387,038


Operating margin		32	%		2	%		34	%		32	%		4	%		36	%


Notes:

(a)		Non-cash stock based compensation expense

(b)		Employer payroll taxes on employee non-qualified stock option gains

(c)		Amortization of acquired intangible assets

(d)		Loss on sale of certain real estate properties

(e)		Income taxes associated with certain pro forma entries

eBay Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Income
(U.S. Dollars In Thousands, Except Per Share Amounts)


	Nine Months Ended									Nine Months Ended
	September 30, 2004									September 30, 2005
				Pro Forma									Pro Forma
	Reported			Entries			Pro Forma			Reported			Entries			Pro Forma

Net revenues	$	2,335,527		$	—		$	2,335,527		$	3,223,542		$	—		$	3,223,542
Cost of net revenues		438,010			(87	) (a)		437,923			578,584			(279	) (a)		578,305

Gross profit		1,897,517			87			1,897,604			2,644,958			279			2,645,237

Operating expenses:
Sales and marketing		588,995			(125	) (a)		588,870			852,239			(396	) (a)		851,843
Product development		176,079			(492	) (a)		175,587			224,309			(825	) (a)		223,484
General and administrative		299,447			(921	) (a)		298,526			410,016			(7,471	) (a)		402,545
Payroll tax on employee stock options		12,289			(12,289	) (b)		—			9,582			(9,582	) (b)		—
Amortization of acquired intangible assets		46,188			(46,188	) (c)		—			77,516			(77,516	) (c)		—

Total operating expenses		1,122,998			(60,015	)		1,062,983			1,573,662			(95,790	)		1,477,872

Income from operations		774,519			60,102			834,621			1,071,296			96,069			1,167,365
Interest and other income, net		59,105			(6,485	) (d)		52,620			85,585			(2,260	) (d)		83,325
Interest expense		(6,614	)		—			(6,614	)		(2,556	)		—			(2,556	)

Income before income taxes and minority interests		827,010			53,617			880,627			1,154,325			93,809			1,248,134
Provision for income taxes		(248,103	)		(23,036	) (e)		(271,139	)		(351,455	)		(33,700	) (e)		(385,155	)
Minority interests		(6,063	)		—			(6,063	)		(48	)		—			(48	)

Net income	$	572,844		$	30,581		$	603,425		$	802,822		$	60,109		$	862,931


Net income per share:
Basic	$	0.44					$	0.46		$	0.59					$	0.64

Diluted	$	0.42					$	0.44		$	0.58					$	0.62


Weighted average shares:
Basic		1,314,456						1,314,456			1,350,836						1,350,836

Diluted		1,360,830						1,360,830			1,383,024						1,383,024


Operating margin		33	%		3	%		36	%		33	%		3	%		36	%


Notes:

(a)		Non-cash stock based compensation expense

(b)		Employer payroll taxes on employee non-qualified stock option gains

(c)		Amortization of acquired intangible assets

(d)		Gain on sale of equity investment and loss on sale of certain real estate properties

(e)		Income taxes associated with certain pro forma entries

eBay Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
(U.S. Dollars In Thousands)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2004			2005			2004			2005
Cash flows from operating activities:
Net income	$	182,349		$	254,971		$	572,844		$	802,822
Adjustments:
Provision for doubtful accounts and authorized credits		19,693			20,932			57,994			65,653
Provision for transaction losses		10,342			15,821			32,692			46,956
Depreciation and amortization		65,722			91,902			180,841			256,867
Amortization of unearned stock-based compensation		252			5,325			1,626			8,971
Tax benefit on the exercise of employee stock options		24,618			61,565			184,455			172,164
Minority interests		1,732			(28	)		6,053			—
Changes in assets and liabilities, net of acquisition effects:
Accounts receivable		(84,150	)		(11,853	)		(137,867	)		(83,235	)
Funds receivable from customers		(13,345	)		(10,538	)		(75,214	)		(84,692	)
Other current assets		(35,643	)		(11,111	)		(148,454	)		(23,667	)
Other non-current assets		(1,100	)		2,186			(3,925	)		(6,564	)
Deferred tax liabilities, net		54,015			62,396			35,734			129,824
Accounts payable		3,190			(8,237	)		4,968			(5,238	)
Funds payable and amounts due to customers		18,717			11,052			149,208			192,877
Accrued expenses and other liabilities		32,150			10,455			23,017			(3,276	)
Deferred revenue and customer advances		3,883			2,201			13,602			(4,394	)
Income taxes payable		(7,662	)		(5,336	)		6,534			18,586

Net cash provided by operating activities		274,763			491,703			904,108			1,483,654

Cash flows from investing activities:
Purchases of property and equipment, net		(73,385	)		(70,471	)		(209,950	)		(240,534	)
Proceeds from sale of corporate aircraft		—			28,290			—			28,290
Purchases of investments		(52,637	)		(195,230	)		(1,262,174	)		(849,851	)
Maturities and sales of investments		158,293			541,488			911,173			1,335,128
Purchases of intangibles and other non-current assets		(4,809	)		(622	)		(7,257	)		(2,575	)
Acquisitions, net of cash acquired		(531,191	)		(592,130	)		(703,706	)		(1,118,744	)

Net cash used in investing activities		(503,729	)		(288,675	)		(1,271,914	)		(848,286	)

Cash flows from financing activities:
Proceeds from issuance of common stock, net		73,948			124,718			429,242			384,384
Payment of headquarters facility lease obligation		—			—			—			(126,390	)
Principal payments on long-term obligations		(444	)		—			(2,599	)		(1,849	)

Net cash provided by financing activities		73,504			124,718			426,643			256,145


Effect of exchange rate changes on cash and cash equivalents		2,659			(2,797	)		(4,440	)		(40,960	)


Net increase in cash and cash equivalents		(152,803	)		324,949			54,397			850,553
Cash and cash equivalents at beginning of period		1,588,713			1,855,649			1,381,513			1,330,045

Cash and cash equivalents at end of period	$	1,435,910		$	2,180,598		$	1,435,910		$	2,180,598


Supplemental non-GAAP measure:
Net cash provided by operating activities	$	274,763		$	491,703		$	904,108		$	1,483,654
Less: Purchases of property and equipment, net		(73,385	)		(42,181	)		(209,950	)		(212,244	)
Less: Payment of headquarters facility lease obligation		—			—			—			(126,390	)

Free cash flow	$	201,378		$	449,522		$	694,158		$	1,145,020

eBay Inc.
Unaudited Summary of Consolidated Net Revenues
(U.S. Dollars In Thousands, Except Percentages)

Net Revenues by Type


	September 30,			December 31,			March 31,			June 30,			September 30,
	2004			2004			2005			2005			2005

Net Transaction Revenues

U.S. Marketplace	$	330,643		$	362,736		$	388,759		$	408,452		$	434,937
Current quarter vs prior quarter		4	%		10	%		7	%		5	%		6	%
Current quarter vs prior year quarter		29	%		24	%		19	%		28	%		32	%

International Marketplace		282,294			344,348			387,187			411,671			401,883
Current quarter vs prior quarter		3	%		22	%		12	%		6	%		(2	%)
Current quarter vs prior year quarter		82	%		64	%		51	%		50	%		42	%

Payments		166,282			200,203			227,097			237,217			239,922
Current quarter vs prior quarter		5	%		20	%		13	%		4	%		1	%
Current quarter vs prior year quarter		56	%		53	%		46	%		49	%		44	%



Total net transaction revenues		779,219			907,287			1,003,043			1,057,340			1,076,742
Current quarter vs prior quarter		4	%		16	%		11	%		5	%		2	%
Current quarter vs prior year quarter		51	%		43	%		36	%		41	%		38	%

Advertising and other non-transaction revenues

Total advertising and other non-transaction revenues		26,657			28,495			28,681			28,963			28,773
Current quarter vs prior quarter		23	%		7	%		1	%		1	%		(1	%)
Current quarter vs prior year quarter		93	%		81	%		65	%		33	%		8	%


Total net revenues	$	805,876		$	935,782		$	1,031,724		$	1,086,303		$	1,105,515

Current quarter vs prior quarter		4	%		16	%		10	%		5	%		2	%
Current quarter vs prior year quarter		52	%		44	%		36	%		40	%		37	%

eBay Inc.
Unaudited Summary of Consolidated Net Revenues
(U.S. Dollars In Thousands, Except Percentages)

Net Revenues by Segment


	September 30,			December 31,			March 31,			June 30,			September 30,
	2004			2004			2005			2005			2005

U.S. Marketplace	$	347,343		$	379,454		$	404,848		$	423,565		$	449,549
Current quarter vs prior quarter		4	%		9	%		7	%		5	%		6	%
Current quarter vs prior year quarter		31	%		25	%		20	%		27	%		29	%

International Marketplace		286,516			350,309			393,792			418,839			408,868
Current quarter vs prior quarter		3	%		22	%		12	%		6	%		(2	%)
Current quarter vs prior year quarter		83	%		65	%		52	%		51	%		43	%

Payments		172,017			206,019			233,084			243,899			247,098
Current quarter vs prior quarter		7	%		20	%		13	%		5	%		1	%
Current quarter vs prior year quarter		59	%		55	%		47	%		51	%		44	%

Percent of Payments revenue which is international		30.1	%		33.0	%		35.0	%		35.1	%		35.7	%


Total net revenues	$	805,876		$	935,782		$	1,031,724		$	1,086,303		$	1,105,515

Current quarter vs prior quarter		4	%		16	%		10	%		5	%		2	%
Current quarter vs prior year quarter		52	%		44	%		36	%		40	%		37	%

Net Revenues by Geography


	September 30,			December 31,			March 31,			June 30,			September 30,
	2004			2004			2005			2005			2005

U.S. net revenues	$	467,545		$	517,465		$	556,246		$	581,851		$	608,428
Current quarter vs prior quarter		4	%		11	%		7	%		5	%		5	%
Current quarter vs prior year quarter		33	%		28	%		22	%		29	%		30	%
% of total		58	%		55	%		54	%		54	%		55	%

International net revenues		338,331			418,317			475,478			504,452			497,087
Current quarter vs prior quarter		4	%		24	%		14	%		6	%		(1	%)
Current quarter vs prior year quarter		88	%		72	%		58	%		56	%		47	%
% of total		42	%		45	%		46	%		46	%		45	%


Total net revenues	$	805,876		$	935,782		$	1,031,724		$	1,086,303		$	1,105,515

Current quarter vs prior quarter		4	%		16	%		10	%		5	%		2	%
Current quarter vs prior year quarter		52	%		44	%		36	%		40	%		37	%

eBay Inc.
eBay Marketplace Unaudited Supplemental Operating Data
(In Millions, Except Percentages)


	September 30,			December 31,			March 31,			June 30,			September 30,
	2004			2004			2005			2005			2005

Confirmed Registered Users (1)		125.0			135.5			147.1			157.3			168.1
Current quarter vs prior quarter		10	%		8	%		9	%		7	%		7	%
Current quarter vs prior year quarter		46	%		43	%		40	%		38	%		35	%

Active Users (2)		51.7			56.1			60.5			64.6			68.0
Current quarter vs prior quarter		8	%		9	%		8	%		7	%		5	%
Current quarter vs prior year quarter		38	%		36	%		34	%		34	%		32	%

Number of Non-Stores Listings (3)		327.7			376.6			399.8			402.2			407.0
Current quarter vs prior quarter		4	%		15	%		6	%		1	%		1	%
Current quarter vs prior year quarter		42	%		31	%		25	%		27	%		24	%

Number of Stores Listings (3)		20.3			28.0			32.0			37.9			51.6
Current quarter vs prior quarter		24	%		38	%		14	%		18	%		36	%
Current quarter vs prior year quarter		395	%		449	%		300	%		131	%		154	%

Gross Merchandise Volume (4)	$	8,307		$	9,810		$	10,602		$	10,884		$	10,800
Current quarter vs prior quarter		4	%		18	%		8	%		3	%		(1	%)
Current quarter vs prior year quarter		44	%		39	%		32	%		36	%		30	%

Rent.com, Shopping.com, and our classifieds websites are not included in these metrics.


(1)		Cumulative total of all users who have completed the registration process on one of eBay’s trading platforms.

(2)		All users, excluding users of Half.com, Internet Auction, Rent.com, Shopping.com, and our classifieds websites, who bid on, bought, or listed an item within the previous 12-month period. Includes users of eBay EachNet in China and eBay India since the migration to the eBay platform in September 2004 and April 2005, respectively.

(3)		All listings on eBay’s trading platforms during the quarter, regardless of whether the listing subsequently closed successfully.

(4)		Total value of all successfully closed items between users on eBay’s trading platforms during the quarter, regardless of whether the buyer and seller actually consummated the transaction.

eBay Inc.
PayPal Unaudited Supplemental Operating Data
(In Millions, Except Percentages)


	September 30,			December 31,			March 31,			June 30,			September 30,
	2004			2004			2005			2005			2005

Total accounts (1)		56.7			63.8			71.6			78.9			86.6
Current quarter vs prior quarter		13	%		13	%		12	%		10	%		10	%
Current quarter vs prior year quarter		61	%		58	%		57	%		56	%		53	%

Active accounts (2)		17.4			20.2			22.1			22.9			24.5

Total number of payments (3)		83.4			99.6			110.4			113.2			117.4
Current quarter vs prior quarter		7	%		19	%		11	%		3	%		4	%
Current quarter vs prior year quarter		45	%		46	%		39	%		46	%		41	%

Total payment volume (4)	$	4,637		$	5,607		$	6,233		$	6,471		$	6,667
Current quarter vs prior quarter		7	%		21	%		11	%		4	%		3	%
Current quarter vs prior year quarter		52	%		51	%		44	%		49	%		44	%

eBay Marketplace as % of total payment volume		70	%		71	%		71	%		70	%		69	%

Transaction rates:
Transaction revenue rate		3.59	%		3.57	%		3.64	%		3.67	%		3.60	%
Transaction processing expense rate		1.30	%		1.27	%		1.15	%		1.08	%		1.11	%
Transaction loss rate		0.22	%		0.31	%		0.30	%		0.19	%		0.24	%


(1)		Cumulative total of all personal, premier, or business accounts opened, excluding accounts that have been closed or locked, and including users that made payments using PayPal but have not registered.

(2)		All accounts, and users whether registered or not, that sent or received at least one payment through the PayPal system during the quarter.

(3)		Total number of payments initiated through the PayPal system during the quarter, regardless of whether the payment was actually sent successfully, or was reversed, rejected, or pending at the end of the quarter.

(4)		Total dollar volume of payments initiated through the PayPal system during the quarter, regardless of whether the payment was actually sent successfully, or was reversed, rejected, or was pending at the end of the quarter.

eBay Inc.
Guidance Summary
(US Dollars In Millions, Except Per Share Amounts And Percentages)

The guidance figures provided below and elsewhere in this press release are approximate in nature because eBay’s future performance is difficult to predict. Such guidance is based on information available on the date hereof, and eBay assumes no obligation to update it.

eBay’s future performance involves risks and uncertainties, and the company’s actual results could differ materially from such guidance. Some of the factors that could affect the company’s operating results are set forth under the caption “Forward-Looking Statements” above in this press release. More information about factors that could affect eBay’s operating results is included under the captions “Risk Factors That May Affect Results of Operations and Financial Condition” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in its most recent annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by visiting the company’s investor relations site at http://investor.ebay.com.


	Three months ending December 31, 2005 (c) (d)
	GAAP			Adjustments (a)			Pro Forma (a)

Net revenues	$	1,245-$1,285			—		$	1,245-$1,285
Diluted EPS	$	0.16		$	0.05		$	0.21

	Year ending December 31, 2005 (c) (d)
	GAAP			Adjustments (a)			Pro Forma (a)

Net revenues	$	4,470-$4,510			—		$	4,470-$4,510
Operating margin		31	%		4	%		35	%
Diluted EPS*	$	0.74		$	0.09		$	0.83
Effective tax rate		31	%		—			31	%

	Year ending December 31, 2006 (c) (d)
	GAAP			Adjustments (b)			Pro Forma (b)

Net revenues	$	5,700-$5,900			—		$	5,700-$5,900
Operating margin		28	%		5	%		33	%
Diluted EPS*	$	0.81-$0.86		$	0.15		$	0.96- $1.01
Effective tax rate		29%-30	%		—			29 % - 30	%


*		Please note that the sum of the quarters may not total to the full year EPS because the quarterly EPS is calculated using the respective results and weighted average shares for each quarter, and the full year EPS is calculated using the results and weighted average shares for the full year.

(a)		Pro forma guidance reflects estimated adjustments for amortization of acquired intangible assets of approximately $55 — $60 million, payroll taxes on employee stock options of approximately $2 — $3 million, stock based compensation of approximately $20 — $25 million and other adjustments estimated to result in an operating margin adjustment of approximately 7% for the remaining quarter in the year ending December 31, 2005. Net of tax, the pro forma items are estimated to result in a $0.05 and $0.09 per diluted share adjustment for the remaining quarter in the year ending December 31, 2005, and for the full year ending December 31, 2005, respectively.

(b)		Pro forma guidance reflects estimated adjustments for amortization of acquired intangible assets of approximately $200 — $210 million, payroll taxes on employee stock options of approximately $20 million, stock based compensation of approximately $50 — $55 million and other adjustments estimated to result in an operating margin adjustment, of approximately 5% for the full year ending December 31, 2006. Net of tax, the above pro forma items are estimated to result in a $0.15 per diluted share adjustment for the full year ending December 31, 2006.

(c)		The guidance includes the acquisition of Skype that closed on October 14, 2005 and the pending acquisition of VeriSign, Inc.’s payment gateway business which is expected to close in Q4-05. The guidance does not include the impact of any other potential acquisitions or the impact of expensing stock options under FAS 123(R) “Share-Based Payment.”

(d)		For the remaining quarter in the year ending December 31, 2005, the guidance above includes expected net revenues from Skype of approximately $20 million, dilution of $0.04 in GAAP diluted EPS, and dilution of $0.01 in pro forma diluted EPS. For the full year ending December 31, 2006, the guidance above includes expected net revenues from Skype of approximately $200 million, dilution of $0.12 in GAAP diluted EPS, and dilution of $0.04 in pro forma diluted EPS.