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EXHIBIT 99.1
eBAY TO ACQUIRE MAJORITY STAKE
IN KOREA'S INTERNET AUCTION CO.
Seoul, South Korea, January 7, 2001 -- eBay Inc. (NASDAQ: EBAY; www.ebay.com),
the world's largest online trading community today announced that it has signed
an agreement to acquire a majority stake in Internet Auction Co. Ltd., Korea's
largest auction-style web site (KOSDAQ: 43790.KQ; www.auction.co.kr). This
strategic acquisition establishes eBay in Korea, the second largest online
market in Asia, and will open eBay's global marketplace to Internet Auction's
thriving community of 2.8 million registered users. The deal combines two
Internet pioneers committed to expanding online trading throughout Asia.
Korea is the sixth largest Internet market in the world with more than 16
million persons, approximately one third of the nation's population, on line(1).
Internet Auction introduced person-to-person trading in Korea when it launched
in April 1998. Today, it is the largest auction-style web site in Korea, serving
the needs of both consumers and businesses. Maintaining its position as one of
the fastest growing companies on the KOSDAQ, in November Internet Auction hosted
465,000 new listings of a wide range of products and services. The company was
listed on the KOSDAQ in June 2000 and will continue trading following
consummation of the transaction.
The share acquisition is the latest step in eBay's plan to establish its
marketplace in countries that represent the majority of the world's e-commerce
revenue. In addition to its core U.S. site, eBay is currently in 7 markets,
including the United Kingdom, Germany, Austria, France, Canada, Australia and
Japan. With the majority ownership of Internet Auction, eBay will be established
in overseas markets that together represent nearly two thirds of the world's
e-commerce revenue. Based on GMS, eBay is currently the number one trading site
in the U.K., Germany, Canada and Australia.
"This is a great match for us and a significant step forward for our global
strategy," said Meg Whitman, president and CEO, eBay Inc. "Internet Auction is a
fantastic company. Auction's
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management and its major shareholders have done a great job building the
company, and we look forward to taking advantage of the strengths of our
combined companies."
"We have built Internet Auction into Korea's number one auction web site," said
Keum Ryong Lee, co-CEO of Internet Auction Co. "This is a wonderful next step
for our business, our users and shareholders. Our users, in particular, should
gain tremendous value from the ability to trade globally that this deal
guarantees."
"As a founder of Internet Auction I couldn't be happier about this alliance,"
said Mr. Hyuk Oh, co-CEO of Internet Auction. "I believe this deal will help
ensure that Internet Auction and its users will continue to grow and prosper."
The transaction will involve the purchase of slightly more than 50 percent of
the outstanding shares of Internet Auction from three of its major shareholders:
Sung Moon Kwon, The Will-bes & Co. Ltd., and KTB Network Co. Mr. Kwon has
significant interests in each of the latter two companies, both of which are
publicly traded on the Korea Stock Exchange. All three shareholders are selling
almost the entirety of their interests in the company in the transaction.
"Internet Auction has found the best possible partner in eBay" said Kwon. "It's
been a privilege to help build Auction, and I am sure the company will continue
to maintain its market leadership."
The terms of the transaction call for the purchase of shares at a fixed price of
24,000 won. Based on an exchange rate of approximately 1,250 won to the dollar,
eBay anticipates the expenditure of approximately $120 million in cash. The
transaction is currently expected to close in the first quarter of 2001, pending
receipt of shareholder, board of director, governmental, and regulatory
approvals. Internet Auction is currently expecting 2001 sales of 68 billion won
as reported per Korean Generally Accepted Accounting Principals (GAAP).
Excluding non-cash charges and certain one-time costs, Internet Auction is
expected to approach operational break-even cumulatively for the whole year.
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The share acquisition is expected to increase eBay's 2001 consolidated revenue
by approximately $20 million. On a pro-forma basis, the net income adjusted for
non-cash items, such as stock compensation and one-time charges, is expected to
lower eBay's 2001 full year net income per share by about one cent. On an
as-reported basis eBay's 2001 full year net income per share is expected be
negatively impacted by about two cents. This is largely due to forgone interest
income associated with the cash purchase. All of these estimates exclude any
amortization of goodwill.
ABOUT eBAY
eBay is the world's largest online trading community. Founded in 1995, eBay
created a powerful marketplace for the sale of goods and services by a
passionate community of individuals and small businesses. On any given day,
there are millions of items for sale on the site across thousands of categories.
eBay enables trade on a local, national and international basis with local sites
in 60 markets in the U.S. and country specific sites in the United Kingdom,
Canada, Germany, France, Austria, Japan and Australia. With the acquisition of
Half.com in July 2000, eBay's community now benefits from a marketplace
combining traditional auction and fixed-price trading.
ABOUT INTERNET AUCTION
Internet Auction Co., Ltd. (www.auction.co.kr) began service in April 1998 as
the first Korean company to offer online trading, and has since grown to become
the leading service of its kind in Korea. Currently it has 2.8 million
registered users and an average of more than 450,000 items for sale at any time.
Its advanced escrow system, which guarantees secure transactions from settlement
and delivery to payment, was the first of its kind in Korea.
The company was listed on the KOSDAQ in June 2000.
FORWARD LOOKING STATEMENT
This announcement contains forward-looking statements that involve risks and
uncertainties. Actual results could differ materially from those discussed.
Factors that could cause or contribute to such differences include, but are not
limited to, the receipt and timing of shareholder, governmental, and regulatory
approvals for the transaction, the possibility that the transaction will not
close, the reaction of the users and suppliers of each service to the
transaction, the future growth of the Internet Auction service and the reaction
of competitors to the transaction. Additional risk factors include the recent
migration of Internet Auction to a new technological platform, the reliance of
the company on external service providers, the need to coordinate strategy and
resources between the two companies, the acceptance of Internet Auction's newer
businesses by its customer base, as well as the contemplated integration of each
company's accounting, management information, human resource and other
administrative systems to permit effective management. Factors related to
international expansion that could cause or contribute to such differences
include, but are not limited to, foreign currency exchange rates fluctuation,
regulatory, political and economic conditions in Korea and other areas of Asia.
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More information about potential factors which could affect eBay's business and
financial results is included in eBay's Form 10-Q for the period ended September
30, 2000 under the headings "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and results of Operations," and its current
report on Form 8-K to be filed in connection with this announcement. More
information about potential factors regarding Internet Auction may be found at
http://dart.fss.or.kr. All forward-looking statements are based on information
available to eBay and Internet Auction on the date hereof, and neither company
assumes any obligation to update such statements.
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(1) Korea Network Information Center, October 2000
