EBay outlines international expansion plans

EBay Inc. hopes to operate in as many as 25 countries in 2005, up from 17 today, and envisions a world in which users will be able to buy and sell goods across borders as easily as if they were making a domestic purchase, company officials said Monday.

In an overview of its financial projections, the online auction and retailing giant also said it expects revenue for 2002 to reach US$1.05 billion to $1.1 billion, according to a company statement. The projected 2002 revenue could produce pro forma earnings of $0.70 to $0.73 per diluted share, according to the statement. In the first three quarters of 2001, eBay reported net revenue of $529.4 million.

Company executives are comfortable with full-year 2001 earnings projections of 47 cents per share from analysts polled by First Call/Thomson Financial Inc., eBay spokesman Kevin Pursglove said.

EBay's goal is to reach annual revenue of $3 billion by 2005, according to the statement.

One key to reaching that goal is business outside the U.S.

"Clearly, with the opportunities that exist in Asia and Europe and the opportunity for growth, it's very likely you'll see an increasing proportion of revenues coming from the international sites," Pursglove said. Analysts expect Internet use to grow over the next several years more rapidly outside the U.S., particularly in Asia.

EBay's goal is to eventually make international transactions look to the user much like domestic transactions do today, he said. The company hopes to perform currency exchange, customs clearance and even language translation for users. When it does, Italian shoppers could find items on sale in Japan described in Italian with the price expressed in Italian lire, for example.

The company is not projecting a date for achieving that goal, Pursglove added.

"We're a ways away from being able to establish that level of transparency," he said.

EBay has expanded its international operations through acquisitions, partnerships and building sites from scratch and will continue to use all those avenues, Pursglove said. The company is interested in expanding to large markets where there already is a significant level of Internet use, and is examining the opportunities in markets including China and Taiwan.

EBay currently has operations in Argentina, Australia, Austria, Brazil, Canada, France, Germany, Ireland, Italy, Japan, Mexico, the Netherlands, New Zealand, Singapore, South Korea, Switzerland and the U.K. The company expects its international business overall to break even by 2002.

Another key element of eBay's expansion plans is its fixed-price sales operations. Over the next several quarters, the company will further integrate its Web site with Half.com, which it acquired last year. The sites eventually will have a single sign-on process, customer service department and system for user feedback. In the third quarter of this year, 16 percent of eBay's revenue came from fixed-price selling, including eBay's own express buying service.

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