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EBAY IN 2002 : THE CHALLENGES OF SUSTAINED GROWTH. eBay is the world’s online marketplace™. Founded in 1995, eBay created a powerful platform for the sale of goods and services by a passionate community of individuals and businesses. On any given day, there are millions of items across thousands of categories for sale on eBay. eBay enables trade on a local, national and international basis with customized sites in markets around the world. In 1995, eBay created the first online person-to-person trading community on the Internet. Today, eBay is the world's leading e-commerce web site with nearly 4 million items for sale in over 4,000 categories ranging from coins and stamps to toys and antiques. Every day, users around the country and the world list approximately 500,000 items on our site to sell. Being the world's leading e-commerce web site poses a great many challenges for eBay. Not the least among them is the daily challenge of protecting our web site from attack, abuse and misuse by hackers, database pirates and pranksters. As you undoubtedly have heard, last week eBay, Yahoo, e*Trade, CNN and other well known e-commerce sites were victims of an insidious organized attack that shut down portions of their web sites. At eBay, the principal attack occurred at approximately 3 o'clock on February 8th and blocked legitimate access to eBay's site for nearly 90 minutes. That attack was followed by a second attack on our site the next day, which we were effectively able to fend off within a few minutes. Let me explain why these attacks are so serious. This attack fundamentally disrupted business on our nation's key e-commerce sites for several days. Although we don't yet know who was behind this attack, it was obviously well planned and aimed directly at leading commercial web sites, such as ours. As we understand the facts, nefarious computer code was serpitiously planted in the computers of unsuspecting individuals and institutions, such as the University of California at Santa Barbara. These computers were then used to launch a sustained attack on leading web sites. The purpose of the attack was to block access to portions of these web sites by bombarding them with a huge volume of what is known as ICMP (Internet Control Message Protocol) traffic. This attack bombarded eBay with over 1 billion bits per second of bad traffic, nearly double eBay's normal incoming traffic. This flood of bad traffic effectively blocked legitimate traffic from reaching our home page. http://www.upstreamasia.com/clientnews%5Cebay%5C00000492.html eBay is the world's largest personal online trading community. eBay created a new market: efficient one-to-one trading in an auction format on the Web. Individuals-not big businesses-use eBay to buy and sell items in more than 1,600 categories, including collectibles, antiques, sports memorabilia, computers, toys, Beanie Babies, dolls, figures, coins, stamps, books, magazines, music, pottery, glass, photography, electronics, jewelry, gemstones, and much more. Users can find the unique and the interesting on eBay-everything from chintz china to chairs, teddy bears to trains, and furniture to figurines. As the leading person-to-person trading site, buyers are compelled to trade on eBay due to the large amount of content available. Similarly, sellers are attracted to eBay to conduct business where there are the most buyers. We provide over two million new auctions, and 250,000 new items every day from which users may choose. Our Mission We help people trade practically anything on earth. eBay was founded with the belief that people are honest and trustworthy. We believe that each of our customers, whether a buyer or a seller, is an individual who deserves to be treated with respect. We will continue to enhance the online trading experiences of all our constituents-collectors, hobbyists, small dealers, unique item seekers, bargain hunters, opportunistic sellers, and browsers. The growth of the eBay community comes from meeting and exceeding the expectations of these special people. http://www.giic.org/events/ann5whitmanbio.asp eBay and AutoTrader.com's Recently Launched co-branded Automobile Site To Feature Services From Saturn, escrow.com, E-LOAN, Dependable Auto Shippers and Hagerty SAN JOSE, Calif., June 12, 2000 - eBay (NASDAQ: EBAY; www.ebay.com), the world's leading person-to-person online trading community, is teaming up with Saturn and its retailers to provide a nationwide automobile inspection service. The new inspection service, to be developed and offered by Saturn, is slated to be part of eBay and AutoTrader.com's recently launched co-branded automobile site, which can be accessed through eBay or www.ebay-autotrader.com. eBay and Saturn plan to implement a program that offers most used vehicle sellers on the eBay and AutoTrader.com co-branded site the opportunity to purchase a comprehensive inspection that millions of potential buyers can view online. The eBay and AutoTrader.com co-branded site already includes services designed to deliver car buyer "peace-of-mind" and ease the online transaction process through integrated escrow, finance, insurance options and shipping services — from escrow.com, E-LOAN, Dependable Auto Shippers (DAS) and Hagerty Classic Insurance. The site is expected to include the following features, some available today with others planned to be added in the near future: · A proposed new feature for the site is expert vehicle inspection services from participating Saturn retailers nationwide — so that buyers will be able to purchase a vehicle online with even more confidence. Under the program being developed, participating Saturn retailers will inspect used vehicles from most makers and deliver the award-winning customer service the company pioneered in the automobile market. · Escrow services and transaction management from escrow.com, allowing buyers to view and inspect their purchased automobile before providing payment. With this feature, currently available on the site, buyers can deposit their payment for a vehicle in a secure trust account and, if the buyer is satisfied with the vehicle, they can authorize the release of funds to the seller. · Competitive financing options from E-LOAN. Providing quotes from five leading national lenders, E-LOAN's financing options allow buyers to quickly and easily get a loan to purchase a used car, offering some of the lowest rates in the industry and online approvals. E-LOAN provides financing for buyers who purchase cars from individuals and car dealerships. Now up and running on the site, this is the first time auto financing has been offered as part of person-to-person transactions at eBay. · Safe, secure and prompt shipping services are currently available from DAS, bringing even more cars within the reach of buyers. Since 1954, DAS has been providing affordable vehicle relocation services throughout America and abroad. A leader in the privately owned vehicle relocation market, the company has recently invested over $22 million in a state-of-the-art, satellite tracked fleet of transports. DAS delivers affordable shipping for nearly every type of used vehicle and, through its association with specialty carrier Passport, also provides shipping for high-end, exotic and antique cars - helping eBay buyers bring the car of their dreams within easy reach. · Affordable collector car insurance from Hagerty Classic Insurance. Specializing in classic car insurance for antique and vintage autos, modified and custom cars, and exotic automobiles, Hagerty provides comprehensive coverage at low rates. Available today, classic car buyers on the site can save hundreds of dollars on their insurance by working with a company that understands how classic cars are driven, housed and maintained. · New automobile search features, including search by make, model, year and location - all delivered in a striking, fun, easy-to-use web page that navigates the car buyers and sellers through the online auction format. "We are constantly striving to enhance transaction safety and convenience on our co-branded site with AutoTrader.com, and are excited about adding Saturn and our other great service providers as part of this effort," said Simon Rothman, vice president and general manager for eBay's automobile business. "eBay is popularizing the online auction format for everything automotive, giving anyone looking for a used vehicle new levels of control over what they pay and sellers access to eBay's vibrant community of active buyers." eBay launched a dedicated automobile area — for collector cars, general used cars, spare parts, and automobilia — on its site in August 1999, following a groundswell of auto listings from its community members and the company's purchase of Kruse International, the world's largest collector car auction house. Since then, eBay's automobile category has grown exponentially and now accounts for over 25 percent of the value of the merchandise listed on the site. In March 2000 the company announced a long-term alliance with AutoTrader.com, to create the Internet's largest auction-style marketplace to buy and sell used cars. About eBay eBay (www.ebay.com), the world's personal trading community, pioneered person-to-person online trading. Founded in 1995, eBay has developed an efficient and entertaining trading site on the Web that is available 24 hours a day, seven days a week. eBay has more than 12 million registered users. More than 500,000 items are added daily in more than 4,300 categories, including: antiques; automotive; books, movies and music; coins and stamps; collectibles; computers; dolls and figures; jewelry and gemstones; photos and electronics; pottery and glass; sports memorabilia; and toys. About AutoTrader.com AutoTrader.com (www.autotrader.com), the world's largest used car marketplace, fundamentally improves the way people buy and sell cars by providing a comprehensive source of credible information and a selection of more than 1.5 million used vehicles for sale. AutoTrader.com is the exclusive online distributor of the automotive listings contained in the Auto Trader® and AutoMart® print magazines published by Trader Publishing Company. These magazines are distributed in more than 136,000 retail outlets with an estimated weekly circulation of 2.5 million copies. AutoTrader.com is also the exclusive online distributor of used car listings data collected by Manheim Auctions, Inc. and the Dealer Services Group of Automatic Data Processing, Inc. (NYSE: AUD). AutoTrader.com's investors include Cox Enterprises, Inc., Manheim Auctions, Inc., Landmark Communications, Inc., the Dealer Services Group of Automatic Data Processing, Inc., and Kleiner Perkins Caufield & Byers. About Saturn Corporation Saturn Corporation entered the automotive market in 1990, bringing a new level of customer service to automotive retailing. Saturn's first products - the compact SL sedan, SW wagon and SC coupe - featured innovations such as space-frame construction and dent resistant polymer body panels. Saturn recently introduced the world's first and only three-door coupe, followed in 1999 by a new line of mid-size cars, the L-Series. Saturn was created through a unique partnership between General Motors and the UAW. Saturn and its retailers, represented by over 425 facilities, share a strong focus on customer service, a focus that is an integral part of Saturn's e-commerce initiatives. For more information on Saturn and its products, please visit www.saturn.com. Forward Looking Statement Statements in this press release that relate to future plans, objectives, expectations, performance, events, and the like are "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Securities Exchange Act of 1934. Future events, risks, and uncertainties, individually and in the aggregate, could cause actual results to differ materially from those expressed or implied in these statements. The factors include but are not limited to: timing and costs associated with developing the programs referenced above; user acceptance of the new site and features; speed and success of the development and integration efforts; adoption by Saturn retailers; effects of the "Y2K" problem; the Internet in general and the economy; general economic conditions; and other factors discussed in the "Forward Looking Information", "Risk Factors" or "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections included in the company's prospectuses, registration statements on Form S-1, quarterly reports on Form 10-Q, and annual reports on Form 10-K. http://www.autotrader.com/about/pressroom/media/pressrelease_detail.jtmpl?article_id=1000&ac_afflt=none The History eBay was conceived initially as a result of a conversation between Pierre Omidyar and his wife, an avid Pez™ collector (she currently covets a collection of more than 400 dispensers). She commented to Pierre how great it would be if she were able to collect Pez dispensers and interact with other collectors over the Internet. As an early Internet enthusiast, Pierre knew that people needed a central location to buy and sell unique items and to meet other users with similar interests. He started eBay to fulfill this need. Pierre launched eBay on Labor Day in September 1995. Since Yahoo had been attacked the day before, eBay had already started to prepare several countermeasures. When the attack began, we quickly took a number of steps to fight back. Initially, we put in a number of our own fire walls to repel the bad traffic, but the volume of that traffic was so heavy that the fire walls were ineffective. Quickly, we turned to our Internet Service Providers ("ISPs"), whose lines were bringing this bad traffic to our site. We worked with these providers to develop filtering mechanisms to prevent bad traffic from even reaching our site. Within 90 minutes, the filter effectively stopped the bad traffic and allowed our site to return to normal service, even though the attack itself continued for an additional 90 minutes. The next day, a similar attack was launched against eBay at about 5:30 p.m. With our experience from the previous day and with a number of countermeasures already in place, eBay and its ISPs were able to quickly repel this attack without any disruption of eBay's services.
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