Ebay Inc. Announces Third Quarter 2005 Financial Results

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 Zennstrцm 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.

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eBay Announces Q3-05 Earnings (cont.)

* 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.

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

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