Dear eBay Community:

With my responsibilities, I don't get the chance to talk to you on a regular basis about the issues impacting our community. But as this year draws to a close, I did want to take a few moments to reflect with you on some of the events of 1999 and to talk to you about our vision for 2000.

1999 was a phenomenal year of growth for eBay. Consider this. In the third quarter of 1998, we were at 1.3 million registered users, 9.2 million items listed and $195 million in gross merchandise sales. One year later, we climbed to 7.7 million registered users, 36.2 million items listed and gross merchandise sales topped $741 million.

These numbers are testimony to what has been accomplished together with you, our users. I believe that together we have helped expand the boundaries of Internet commerce. I believe that together we have helped to dramatically change the way that people buy and sell collectible and non-collectible merchandise. And I believe that eBay has helped people achieve success on their own terms.

1999 will also be remembered as the year that someone actually broke the 10,000 Feedback Rating and became eBay's first "Shooting Star."

The year was not without its challenges, however. We experienced some tough times with issues like site stability and policy changes that upset some of you. Your loyalty to eBay has been incredible, and I want you to know how grateful I personally am to you - our community members - for having stood by us through all of this. These experiences were difficult for all of us, but they helped me remember something very important - something I learned when I first joined eBay in 1998.

eBay is about people. It's about finding success on your own terms. It's about giving people the freedom to work for themselves, to supplement their income and even to generate their own income through trading on eBay. It changes the way people do business. It changes lives. I was reminded frequently this year that everything we do makes a difference to all the people in the eBay community. And it's a tremendous responsibility.

A member recently wrote to me and said, "The amazing fact is eBay has done something that has never been done and with no owner's manual, guide book, or mentor. Now you're the model others are emulating." His words really struck me. Yes, what we're doing is pioneering, and we will have challenges for 2000...

Site Stability
As we have said many times before, Site Stability is our Number One Priority. We spent the greater part of this year focused on implementing a high-availability system. In November, we put this high-availability system in place in addition to having the "warm backup". While this system will not prevent all future problems, it is most certainly a tremendous step toward improving site availability. We will continue to provide you information on our progress in this area through periodic Tech Updates.

We understand that the availability of eBay is vital to your businesses, your livelihoods, your hobbies and your fun. We believe our efforts to stay ahead of the growth curve are paying off. We have achieved significant performance and capacity improvements. We feel that we are exiting the year far stronger, and we will keep building strength from here.

Customer Support
In an effort to meet the growing needs of the eBay community, we more than doubled the size of our Customer Support staff in 1999. We improved our Customer Support training and quality assurance programs to ensure that our representatives better understand your needs as traders on eBay. We believe that these initiatives have helped us greatly reduce the response times and the quality of our responses to you. Additionally, we launched a major initiative to track and to improve your satisfaction with our performance in this area. We plan to share the results of these surveys later in January.

I believe that we have made great strides in Customer Support, and I am confident that we will continue to improve in this area next year. Like you, I am looking forward to the launch of Online Customer Support in 2000. Working together, I am sure we can make this a huge success.

Features, Functionality and Services
In addition to making system improvements in 1999, we also added features and services to help you trade more easily at eBay - Gallery and Gallery Search, Mister Lister 2.0, Personal Shopper, My eBay, About Me, and One-Time Credit Card Payments, among others. In June, we launched an improved User Interface to help you find information on the site more easily. We also told you about iEscrow, Insurance, iShip, and E-Stamp to help you trade more easily and quickly and about eBay-a-go-go to get eBay updates wherever you go. And we acquired a company called Billpoint and launched a new program to help facilitate payments between buyers and sellers at eBay.

Throughout the year, we worked to make eBay a safer place for trading. We clarified our policies on permissible items, on Feedback and selling requirements, including the credit card requirement for new sellers. Our plan for 2000 is to continue refining our features and services to help you trade more easily, efficiently and safely at eBay.

Categories and Expansion
During the last year, we have endeavored to make eBay a more vibrant marketplace by entering new trading regions. We expanded the number of categories for buying and selling on eBay, going from about 1,500 categories to nearly 3,000 over the year. I have been intrigued and amazed at all the unique trading areas that have popped up at eBay, like nodders and flue covers! But I believe that these new categories are a testament to our wide-ranging interests and to the uniqueness of all things eBay.

We expanded to reach new areas of the world - including the United Kingdom, Australia and Germany. We also entered regional markets to help bring trading closer to your hometown - Atlanta, Philadelphia, Houston, Denver and a host of other locales across the country.

We also entered new trading areas to add to the variety of items in the marketplace. In April, we announced the acquisition of Butterfield & Butterfield. And in September, we launched Great Collections - a new area of eBay devoted to fine antiques, art and rare collectibles. We also announced the acquisition of Kruse to help build an area of eBay devoted to cars.

The Year 2000 should find us well established in these new areas. And who knows what new collecting areas you will bring to eBay!

The eBay Foundation™
We also continued our work with the eBay Foundation™ to help build communities in the real world. This year, the Foundation made about 20 grants to local and global organizations, such as The Odyssey, a group that uses the Internet to promote global awareness among youth. The eBay Foundation™ won two major awards for charitable giving, one from the National Society of Fundraising Executives and another from the Community Foundation Silicon Valley. I am very proud of the continuing charitable work of the Foundation.

As the new millennium approaches, I did want to tell you that I feel privileged to be a part of eBay. I am proud of what we have been able to build together in the last year. And I look forward to continuing to work with you to build the world's greatest personal trading community.

Happy Holidays and Happy New Year!

Regards,
Meg