Navigating the Deluge_ Dubai Floods and the Resilience of Dubai International...
eBay 2009 Analyst Day
1.
2. 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
3. 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.
16. Piercing the myths
eBay Playbook Customer-driven
innovation
Auctions as Auctions as one of
strategy
gy several formats
Open
p Managed
g
marketplace marketplace
Tweak the model Transform the model
17. eBay Highlights
1 Focus where we can win: “Secondary Market”
2 Transform our Marketplace
3 Grow complementary formats
18. 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
19.
20. 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
21. What to expect from Skype
Strong standalone business …
St t dl bi
one of fastest growing in history
g g y
We ll
We’ll ensure it s successful &
it’s
realizes best value
23. 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
35. We’ve built a global Internet payment network
• 190 global markets
g
• 17 local language sites
gg
• 19 currencies
35
36. Unmatched advantages & network effects
Fraud
Internet
expertise
p
technology
PayPal
network
t k
effects
Global
Closed-loop
connections
data
dt
36
37. Growth in active accounts
+23% TPV growing
2-3X f t
2 3X faster
+16%
16%
than
competitors
$36 4
49.4
49 $48 3
57.3
57 $60 4
70.4
70
BillionMillion Million Million
Billion Billion
2006 2008
2007
37
38. Growth in global Total Payment Volume (TPV)
TPV growing
1.5-2X faster
1 5 2X f t
than
eCommerce
$36 $48 $60
Billion Billion Billion
2006 2007 2008
38
43. Penetration growing on eBay
73 78% 2011
73-78%
eBay Sel Coverage
58% 2008
ller
SHARE
Consumer Preference
43
44. 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
57. 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
59. Many sectors need payment solutions
Mobile &
Banks
other devices
Businesses with
specialized Governments
payment needs
Social networks
Non-profits
59
60. PayPal platform enables developers
225k+
developers
100k+
developers
660k+
developers
Millions of
.NET developers
Platform
PayPal global Internet payments network
60
62. Tremendous growth ahead
Global Total Payment Volume
$100-120B
$100 120B
Adjacent
Payments
y
Global
$60B Merchant
M ht
Services
eBay
2008 2011
63. $4-5 billion in revenue by 2011
$2.4
$2 4 $4-5
$4 5
BILLION BILLION
2008 2011
63
64. 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
65. 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
66. An evolving industry
1 Powering global eCommerce
2 Unmatched advantages
3 Significant opportunity ahead
66
70. 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
72. An increasingly global footprint
North America Asia Pacific
Europe
(46% of Total) (9% of Total)
(45% of Total)
$2.6B
$2 6B $2.5B
$
$1.9B
$1.4B
$0.5B
$0.3B
2008 2008
2008 2005 2005
2005
73. Broad choice of formats
Fixed P i
Fi d Price
Auctions
A ti
Classifieds
Advertising
Buyers Sellers
Vertical
Experiences
74. Unique advantages of Marketplace model
Superior Wide global supply of
flexibility products without ownership
Ultimate buyer Surface best inventory
choice regardless of format
Seller Enabling competition, but
platform not competing against sellers
Sellers compete so our
Customers
win buyers get the best deals
75. If your Marketplace is so
advantaged … why aren t you
aren’t
g
growing faster?
g
76. By 2008, we had fallen behind
• Customer experience had
p
Customer fallen behind
experience • Optimizing for auctions, and
constraining fixed price
• “Open Marketplace”
philosophy slowed us down
Approach • Too incremental –
to change not driving the marketplace
• Needed to “revamp” technology
77. Our three year journey
2008 2009 2010+
Fix the foundation
• enhance trust
• improve selection
• drive great deals on our site
Position f g
P iti for growth
th
• transform the user experience
• innovate through technology
g gy
• grow our complementary formats
79. In 2008, we began to fix the foundation
• New feedback system
Trust
• Surface highest trust sellers in search
standards
• Better deals “race to the top” in search
User experience
& search • 4X in listings duration for fixed price
• Created incentives for high quality
Seller
Incentives • Started risk-free pricing
80. Our trusted sellers are doing well…
More trusted Contributing to more Growing faster than
sellers… of our GMV… eCommerce…
eCommerce
49% 27% trusted sellers
26%
12% 17%
24%
4%
-6%
Q4 ‘07
07 Q4 ‘08
08 Q1 ‘08
08 Q4 ‘08
08 Q3 ‘08
08 Q4 ‘08
08
% of Sellers with 4.8+ % of GMV from 4.8+ DSR GMV Growth Y/Y
DSRs (ex. Vehicles)
sellers
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
84. In 2009 we’re taking bolder actions
• First contact resolution for top buyers
Trust
• eBay protection for top buyers (US, UK)
standards
tdd • Increasing exposure for high-quality sellers
• Optimize new search platform
User experience • Product-based experience highlights value
Product based
& search • Enabling multiple-SKU listings
• Integrate local classifieds listings
g g
• Eliminating upfront fees for C2C sellers (UK)
Seller
S ll
Incentives • Improving seller economics on eBay
85. We must stabilize, then grow our business
2008 2009 2010+
Fix the foundation
Position for growth
86. Our focus: the secondary market
Liquidation
Used Small retail Large retail
Secondary Market
Big business
~$500B
Inventory:
Small business tibl
• C ll
Collectible
• Vintage
• Pre-Owned
Inventory:
• Out of season
• Some new
Consumer in
i season
Inventory:
• Out of season
Market opportunity • Outlet inventory
• Overstock/returns
eBay today
• Liquidation inventory
87. Secondary market: large, compelling opportunity
Consolidating this inventory creates step-change in
deals and selection for our buyers
~$500B Market
Off-price
Wholesalers
Liquidators
Outlets
retailers
88. A Marketplace is ideal to win the secondary market
Marketplace model
Secondary market
Inefficient • Absorbs volatile supply
supply chains
pp y • Moves deep-SKU
p
Items of • Sellers can test market price
uncertain value • Multiple formats to drive velocity
Buyers looking • Best deals with reliable service
foremost for
• Search brings it all together
g
great deals
99. Buyers can find local inventory from Classifieds
Core search
results
Classifieds
Sponsored
links
100. Unique power of a marketplace
Bose iPod docking station case study
101. 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
102. 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
103. Trusted sellers compete to provide the best deals
Garmin Nuvi 200w eBay sale history (10/19-11/10)
Seller 1
• $142.89
$145 Seller 3
• $139.95
$140
Seller 2
Seller 3
Seller 4
• $141.89
$135
wins!
• $136.95
$136 95
• $128.97
$130
$125
104. Deals are better than ever
In the U.S., a new Tivo HD
DVR costs an average of
12% less than competitiors
106. Breadth of inventory
Secondary Market
Latest Latest Prior Gen All generations
iPod Nano iPod Nano iPod Nano iPod Nano
Brand New New,
New Open Box Brand New Refurbs / Used
107. eBay is the best way to access the world’s inventory
108. eBay is the best way to access the world’s inventory
Retail-like option:
experienced sellers
vetted by eBay
109. eBay is the best way to access the world’s inventory
Marketplace option:
great deals & value
110. eBay is the best way to access the world’s inventory
Local option:
connects buyers
with nearby sellers
111. eBay is the best way to access the world’s inventory
Advertising:
shows what’s available
across the web
112. 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
113. Becoming the channel of choice for web’s best sellers
• Best channel for velocity and cash flow
Velocity
y • Steering traffic to our best sellers
• Increasing operational efficiency
Efficiency - Reduce contacts via better trust
- Tools for shipping and tracking
- Seller dashboard for better insights
• Release management and
g
Reliability communications
116. 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?”
117. 2009 Priorities
1 Search
2 Catalog
3 User Experience
Use xpe e ce
4 Platform
118. 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 ii 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
119. 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
120. 2009 Priorities
1 Search
2 Catalog
3 User Experience
Use xpe e ce
4 Platform
132. Transforming technology at eBay
2008 2009 2010+
Search & Platform
• Best Match
• Project Echo
• Product based experiences
Product-based
Catalog & User Experience
• Onboard more product catalogs
• Bring structure to unstructured data
• Custom shopping experiences
133. 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
136. We’ll continue to grow formats like Classifieds
Classifieds global revenue
$270M
46%
CAGR
$86M
2008
2005
137. Classifieds market: large, growing, complementary
Global online classifieds market size
Services, dating, jobs & housing
Vehicles, goods
$22B
Complementary
$17B to eBay
2008 2010
Sources: Gerson Lehman Group Analysis - August 2008; eMarketer; Collins
Steward LLC Report - Nov 2008; Internal estimates
138. Classifieds is a strong global opportunity
Canada
d Netherlands
Denmark
#1 #1
#1
Germany
United Kingdom
#1
#1
Italy
Australia
A t li
#1
Spain
#2
#2
We are #1 or #2 in 8 major markets
139. Multiple ways to monetize Classifieds
Feature Fees
Insertion Fees Advertising
CPC advertising
Home page featured
Job posting fees
High value goods
CPM advertising
140. Fixed P i
Fi d Price
Auctions
A ti
Classifieds
Advertising
Buyers Sellers
Vertical
Experiences
141. We are reshaping the Marketplaces business
Marketplaces revenue
Auctions
$5.6B
$5 6B
Fixed price
Advertising
Classifieds
$3.5B
Other
2005 2008
142. We are reshaping the Marketplaces business
Marketplaces revenue $5-7B
Auctions
$5.6B
$5 6B Auctions
stabilizes but
Fixed price
trails the market
Advertising
Classifieds
$3.5B Fixed Price
Other
grows faster
than the market
Other f
Oth formats t
grow faster than
the market
2005 2008 2011
144. A New eBay
Transforming our Marketplace...
Marketplace
1 Fixing the foundation
Focusing where we can win…
g
2 Secondary market
3 Growing our complementary formats
g p y
145.
146. One of the fastest growing
5 year-olds in history
With accelerating growth, and outstanding
gg g
fundamentals
Attacking an enormous opportunity, and
positioned to win
Business is getting stronger
148. How we make money
What s
What’s Paid?
What’s F
Wh t’ Free?
?
• SkypeOut (pay as you
• Skype-to-Skype
go)
calls
• Subscriptions
• Video Calling
• Online numbers
• Chat/IM • Voicemail
• Conference Calling • SMS
149. Skype is one of the fastest adopted
technologies in history
152. And a powerful business model
p
Slightly ahead of
eBay and PayPal Skype Revenue
at 5 years ($Millions)
($Milli )
2004 and 2005 estimated based on SkypeOut billings
153. 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
154. An historic time:
Communication is moving from
hardware to software
Internet
Hardwired Software based
Software-based
Paradigm change
into the network & device network & flexible devices
155. =
Voice Data
Means there is potential for Skype “everywhere”
r
156. Unlocking massive benefits for users
Easier / Everywhere
Richer Experience More Choices
r
r r
r r
r
Presence
Video-calling
Consumers buy data plan
Unified Messaging
Chat, Voice, File
Select best-of-breed
Transfer are
application
Seamless device
S l di
table-stakes
t bl t k
PAYG, premium services
integration
=
Voice Data
157. The opportunity
to become the world’s leading
world s
communication software company.
158. The opportunity is
massive
i
Telecom has remained ~2% of
Communication is a
HH income for the past 40
HUGE $1.4T market
years
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
$300B
0.0% EBITDA
1981 1986 1991 1996 2001
Market size: Communication relative to Search and ecommerce ($
Source:Trends in Telephony Service from FCC (June 2005)
in Bn)
159. In 2008 we sharpened our focus on
customers, with remarkable results
t ith k bl lt
72%
39%
YoY
YoY
Q4 08
Q4 08
Active Users
Ai U Engagement
(Calling Minutes per Active User)
165. 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!
166. Our St t
O Strategy
2 Mobile Business Platform
Invest in
1 Leverage our core consumer business
3 Build our mission critical infrastructure
167. Core CONSUMER is a $240B market
2008 Worldwide Telecom Market1 - Total Market: $1.4
billion
$241B
Fixed Voice
Consumer
168. And we have a clear plan to attack it
1.
1 Continue driving
new users
2. Better promote
our paid
products
3. Increase
revenue per
paying user
4. Monetize free
170. Our Mobile Approach
Availability
A il bilit post-load
tl d
Device pre-load
Operator partnerships
171. Skype is available for download
yp
today on several platforms
Approximately 12 million downloads
at the end of 2008
172. 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
173. 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
174. Business is a $203B market
$203B
Fixed Voice
Business
175. A compelling business offering
g g
Skype is already used in business
Why?
35%* of
users say
they use
Reduce
Benefits Cost Savings Productivity Skype for
Business Travel business
pp
purposes
Focus Expand Build out
Develop
Business Paid
Sales
Product Support
Channel 35%
Offering
65%
*Based on a survey of U.S., CN, U.K of Skype users in March 2008
176. Platform: A Thriving Ecosystem
g y
users
190 Skype certified
devices
Partnerships with
15,000 Developers
world-class companies
178. Act 1
2003 2008
Platform: Desktop/Laptop
Revenue Stream: SkypeOut
y
Market segment: LD calling
“One” Main product: Voice
Main region: Mature internet
markets
Main target user: Consumers
r
r
179. Act 2
2009 2011
• Platforms + Mobile
• Diversified revenue streams
• Business subscriptions
“Many” • Market segments + Collaboration
• Products + Video
• Regions + Emerging
• Targets + Business
r
r
180. 2012 and b
d beyond
d
• Platform
• Balance of revenue streams
“Any”
Any • M ltiple market segments
Multiple
• Established products
• Regional ubiquity
• Mature target markets
r
181. 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)
182. 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
185. What you heard today…
…What you can expect
What o e pect
from us i th f t
f in the future
186. We play in very attractive markets
Online Online
eCommerce Payments Communications
$1.4T
$
$0.6T
$0.4T
2008 future 2008 future 2008 future
Source: External estimates & internal analysis
187. 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 • ~$60B TPV in 2008 • More than 100B Skype
calling minutes
g
• ~13% share of global
13% • ~9% share of global
9%
eCommerce eCommerce • ~400M registered
users
• ~86M active users • ~70M active users
188. Proven and powerful business models
Strong cash
g
High growth
generation… Very high
engine …
g
attractive growth …
good margins
margins good margins
… Generating excellent cash flows
189. M&A: Using financial strength to extend our reach
Strengthen Extend Acquire
geographic formats / key
footprint
p p
products technologies
g
190. A significantly diversified portfolio
2008
2004
BML
StubHub
Other MP
Other MP
Adjacencies
Adjacencies
Classifieds
Text &
Graphical Ads
Classifieds
Auctions
Auctions
Fixed
price
Fixed price
$3.3B
$
$8.5B
$8 5B
191. An expanding global footprint
North America Europe Asia
48% of total 41% of total 11% of total
Up 30%
Up 44%
Up 149%
$1.0
$1 0
$0.4 Billion
$3.2 $4.1 $2.4 $3.5 Billion
Billion
Billi Billion
Billi Billion
Billi Billion
Billi
2006 2008 2006 2008 2006 2008
193. Attractive returns on invested capital
ROIC*
27%
25%
23%
18%
2005 2006 2007 2008
* Reconciliation in appendix
194. 2008 was a tough year …
Full year performance was ok …
2008 1st half 2nd half
Up
U 11% 22% 2%
Top Line
T Li
Non-GAAP
Up 12% 25% 0%
EPS*
Free cash
$2.3B
$2 3B 23% -9%
flow*
… but a brutal second half!
* Reconciliation in appendix
195. ... 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
196. 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
198. PayPal On eBay … ~$30B TPV
On-eBay Revenue
Decelerating along with …increased penetration
eBay core GMV… will drive growth
2011
Q1 08 Q2 08 Q3 08 Q4 08 2008 2009 2010
199. PayPal: the business model
Great deals for
Consumer funding choice Risk management
merchants
(Transaction expense)
(T ti ) (Fraud l
(F d losses)
)
(Global take rate)
‘05 ‘06 ‘07 ‘08 Future ‘05 ‘06 ‘07 ‘08 Future
‘05 ‘06 ‘07 ‘08 Future
stable declines stable / down
… ~60% transaction margin business
200. PayPal: Capitalizing on enormous potential
PayPal revenue
$4 - $5B
in
i 2011
BML/Adjacent
40% range
payments
Merchant
30% range services
low single
On eBay
digits
2008 2009 2010 2011
2009 2011
2009-2011
CAGRs
201. Marketplaces: Broad choice of formats
Fixed P i
Fi d Price
Auctions
A ti
Classifieds
Advertising
Buyers Sellers
Vertical
Experiences
202. Marketplaces Fixed Price format … $22B GMV
Fixed price revenue . . . $2B 2008 Double
digit
di it CAGR
with double digit growth…
and huge growth potential
2011
Q1 08 Q2 08 Q3 08 Q4 08 2008 2009 2010
fx-neutral excluding vehicles.
204. Auction format: $23B GMV
CAGR in
Auction revenue . . . $2B 2008
negative double
egat ve doub e
digit range
A differentiated format…
Smaller before stabilizing
2011
Q1 08 Q2 08 Q3 08 Q4 08 2008 2009 2010
fx-neutral excluding vehicles.
205. Marketplaces: A state of transition
Marketplaces revenue
$5 - $7B
in
i 2011
Other
Advertising
~2X 2008 levels
Classifieds
Vehicles
V hi l
Fixed i
Fi d price
smaller before bigger
Auction
2008 2009 2010 2011
206. Skype: Powerful standalone business
Skype revenue
$1B +
in 2011
2009-2011
30% range
CAGR
2008 2009 2010 2011
208. Building bigger and stronger
B ildi a bi dt
portfolio will require investments …
… we will need to operate smarter in
order t f d our i
d to fund investments …
t t
209. Achieving full potential requires…
Operating Significant
$
$2B over 3 years
y
smarter investment
in estment
Customer
Lower
retention / loyalty
processing costs
User experience /
search / platform
Improved
customer
experience
Improved trust /
Organization
O ii comprehension
simplification
210. Operating smarter: we’ve simplified the org
Simplified organization
~$450
by removing ~10% of HC
y g
Million
Q3 ‘08 ending HC
08 3 yr savings
211. Operating smarter … improved customer experience
We spent $700M in 2008 on customer support …
Drive Down Contacts
Eliminate Root Causes
2007
2008
$300M in savings … more satisfied customers
…R i
Reinvest i a b tt customer experience
t in better t i
212. Operating smarter: Lower processing costs
We spent $700M in 2008 in processing PayPal transactions …
Providing
P idi g Launching new
L hi g
consumer choice products
ANNESSA: I
don’t know
Cards Balance
Bank
where these
images are
Higher
g Lower
… lowering processing costs … reinvestment/comprehension
213. Operating smarter to create capacity to invest
Operational
High growth lower Reinvest
excellence
margin business
Operating M i L
O i Margin Levers
FX Business Ops Reinvestment
Mix Excellence