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To: Lizzie Tudor who wrote (6290)	1/19/2006 10:41:40 PM
From: Lizzie Tudor	Respond to of 15857

GS on the ebay numbers which were a blowout imho Jan 19, 2006 eBay (OP/A): Strong core business trends & new growth opportunities abound A. We recommend investors buy eBay with 25% appreciation potential to our $54 implied value. Our confidence in the biz has increased in each of the last 3 qtrs & this is the best we have felt about the biz in a yr given: eBays 2 largest & most mature markets are accelerating, expectations remain low, conversion rates remain strong, there is ample opportunity for improved profitability, & we see entirely new dimensions of growth. Specific new growth areas: marketing services via pay-per-call (PPC) lead generation on keyword searches, new marketplaces (Kijiji & eBay Express), new pricing formats (i.e. PPC) that better suit categories like new autos, real estate & services and countries like China/Russia, pmts off eBay, micro pmts, & increased global adoption of PayPal due to the Skype integration. Maintain 06 EPS est of $1.03 w/potential upside if any of these opportunities materialize. We maintain an OP/A rating. 19, 2006 EBAY (OP/A): First Take: Accelerating business trends & better than expected margins reinforce our positive view B.Jan Accelerating trends in 4Q05 in both the US & Intl bizs reinforce our positive view of eBay shares as rev & Adj EPS of $1.33b and $0.24m exceeded our $1.31b & $0.22 ests. OI margins were 150 bps better than expected. Incremental operating margin of 34% beat our 29% est. Organic rev (ex fx) accelerated to ~38% y/y growth from 32% in 3Q05 & 35% in 2Q05 by our ests. Listings of 546m accelerated to 35% y/y growth from 32% y/y in the prior 3 qtrs and surpassed our 535m forecast. These trends evidence the cos ability to drive growth in both emerging & more mature markets. 06 guidance appears conservative (as normal) & is in-line with prior guidance, but slightly below our rev & EPS ests of $6.09b & $1.03. FX had a greater negative impact at ~$41 m than our $10m est. Guidance may also reflect a greater neg FX impact than previously expected. We still see 25%+ upside to our $54 implied value. Maintain OP/A rating.