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January 16, 2003

Bellwether online auction company eBay, saying it expects to see nearly $2 billion in revenue for 2003, turned in another nice financial performance, reporting fourth quarter 2002 net income of $87 million, or 28 cents per share, on record revenues of $413.9 million.

Analysts on average had been expecting about $60.4 million in revenues or 19 cents a share. The actual figures compare to $25.9 million in net income, or 9 cents a share, in the fourth quarter a year ago.

Looking forward, San Jose, Calif.-based eBay said it expects that revenues for 2003 could be as high as $1.9 billion, $70 million higher than the upper end of the company's most recent guidance. Earnings for 2003 are projected as high as $1.12, seven cents higher than the upper end of the company's earlier guidance.

The company also said that first quarter 2003 revenues could be about $440 million, with the second quarter at $460 million, the third quarter at $480 million and the fourth quarter $520 million.

For the full year 2002, eBay posted consolidated net revenues of $1.21 billion, a 62 percent increase over the $748.8 million reported in 2001. Consolidated net income increased 176 percent year over year to $249.9 million, or 85 cents per diluted share.

The fourth quarter earnings got a nice cash boost from its online payment service PayPal, which contributed $72.6 million in transaction revenue. eBay said its millions of users transacted a record $4.6 billion in gross merchandise sales (the total value of items sold) during the fourth quarter, a 68 percent year-over-year increase. eBay hosted a record 195 million listings during the quarter.

"Our Q4 results capped our most successful year ever," said Meg Whitman, president and CEO. Indeed. eBay hosted a record 195 million listings during the quarter, representing a 55 percent year-over-year increase

Whitman said in a conference call on the earnings report that eBay's stellar fourth quarter performance was based three things:

-- a growing acceptance of e-commerce, and the fact that more people are online and more of those online are shopping.
-- eBay became a mainstream shopping destination this holiday season, and was No. 1 in weekly unique visitors for the last eight weeks of the year.
-- almost every part of the business was focused on making users successful  benefiting sellers and helping buyers.

"I believe eBay is poised to become one of those great companies that comes along only once in a generation," Whitman said.

International is one of the faster growing segments, with net revenues coming in at $107.4 million for the fourth quarter, up 173 percent from a year earlier. International business now accounts for 36 percent of eBay's gross merchandise sales, Whitman said.

eBay had reported third-quarter earnings of $61 million, or 21 cents a share, on net revenues of $288.8 million.

eBay said it now has five categories that generate more than $1 billion in worldwide sales based on annualizing its fourth quarter results. eBay Motors at $4.3 billion, Computers at $1.9 billion, Consumer Electronics at $1.8 billion, Books/Movies/Music at $1.4 billion, and Sports at $1.2 billion.

However, "Our success has not gone unnoticed, and we expect to see increasing competition in the United States from a variety of companies," said Rajiv Dutta, eBay's CFO.

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