EBay outlines international expansion plans

EBay hopes to operate in as many as 25 countries in 2005, and predicts a world where users will be able to buy and sell goods...

EBay hopes to operate in as many as 25 countries in 2005, and predicts a world where users will be able to buy and sell goods across borders as easily as if they were making a domestic purchase.

In an overview of its financial projections, the online auction company said it expects revenue for 2002 to reach up to $1.1bn (£0.76bn). Ebay's projected 2002 revenue could produce pro forma earnings of up to $0.73 (£0.50) per diluted share. In the first three quarters of 2001, the company reported net revenue of $529.4m (£364.5m).

Company executives are comfortable with full-year 2001 earnings projections of $0.47 per share, said eBay spokesman Kevin Pursglove.

EBay's goal is to reach annual revenue of $3bn by 2005, claiming that the key to reaching that goal is business outside the US.

"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 more rapidly outside the US during the next few years, particularly in Asia.

EBay aims to make international transactions look much like domestic transactions do today, Pursglove said. The company hopes to perform currency exchange, customs clearance and even language translation for users. For example, Italian shoppers could find items on sale in Japan described in Italian with the price expressed in Italian lire.

However, Pursglove said: "We're far away from being able to establish that level of transparency."

EBay will continue to expand its international operations through acquisitions, partnerships and building sites from scratch, 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 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 UK. The company expects its international business to break even by 2002.

Another key element in eBay's expansion plans is its fixed-price sales operations. During the next several quarters, the company will further integrate its Web site with Half.com, which it acquired last year.

In the third quarter of this year, 16% of eBay's revenue came from fixed-price sales, including the company's own express buying service.

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