SAN JOSE, Calif., Oct 06, 2008 (BUSINESS WIRE) -- eBay Inc. (NASDAQ:EBAY) today announced that it has reached a definitive
agreement to acquire Bill Me Later(R), the
number two online-oriented payments brand, for approximately $820
million in cash and approximately $125 million worth of outstanding
options, net of option exercise proceeds. The acquisition extends the
company's leadership in payments by combining
Bill Me Later with eBay's PayPal, the number
one online-oriented payments brand. Subject to various closing
conditions, the deal is expected to be completed by year-end.

"Bill Me Later is a perfect complement to our
portfolio; PayPal and Bill Me Later belong together,"
said John Donahoe, eBay Inc.'s president and
chief executive officer. "We now have a
powerful combination of the two leading, complementary online payment
products, each with proven benefits for consumers and online merchants.
At an attractive valuation, our investment in Bill Me Later opens
significant long-term growth opportunities."

The deal offers strong synergies within the eBay portfolio. Bill Me
Later can offer its deferred payments and promotional financing service
to the tens of millions of customers who use eBay and PayPal. PayPal
expands its customer base to approximately 1,000 of the most popular Web
sites and to the millions of online shoppers who use Bill Me Later.

"Bill Me Later is a fabulous business, and the
opportunity that eBay, PayPal and Bill Me Later have together is nothing
short of tremendous," said Scott Thompson,
president of PayPal, who will oversee both businesses. "By
combining the best of PayPal and Bill Me Later, we can offer an even
stronger service for consumers and merchants."

Together, PayPal and Bill Me Later can better meet consumers'
needs both on and off eBay by allowing them to quickly, safely and
easily purchase the items they want online and pay for them immediately
or over time. With one payment relationship, retailers and eBay sellers
can offer two of the Web's most innovative
payment methods, which have been proven to increase sales and deliver
higher average selling prices for merchants.*

Founded in 2000 by a team of seasoned professionals in the payments
industry, Bill Me Later enables online retailers to offer transactional
credit to consumers at the point of sale. With its sophisticated
underwriting techniques and credit decision model, Bill Me Later
provides approval decisions for shoppers within seconds without
requiring them to complete detailed application forms.

Bill Me Later's credit risk modeling and
analysis have consistently performed better than the consumer credit
industry average. Combined with eBay's and
PayPal's best-in-class transactional data
monitoring, this expertise will bolster the company's
ability to drive down risk in the payment system and provide customers
with even safer, faster ways to pay online.

"PayPal and Bill Me Later have a similar
vision to dramatically streamline and improve the experience for
customers shopping online," said Gary Marino,
chief executive officer of Bill Me Later. "This
deal helps us to accelerate that vision by offering our products to
millions of customers who already use eBay and PayPal."

Marino will continue to run Bill Me Later as a business unit of PayPal
and will report to Thompson as part of the PayPal senior executive team.

"This deal makes perfect sense,"
said Bruce Cundiff, director of payments research and consulting for
Javelin Strategy & Research. "Bill Me
Later has adoption among the most popular large merchants on the Web,
and PayPal is the way that many small merchants and eBay sellers accept
payments online. Together, they can extend the presence of the two
brands and offer even more choice for consumers when they shop online."

Transaction and Financial Information

eBay will acquire all of the outstanding shares of capital stock and
warrants to purchase capital stock of privately-held Bill Me Later for
approximately $820 million. In addition, at closing eBay will assume all
outstanding Bill Me Later employee options which havea current value of
approximately $125 million, net of option exercise proceeds. eBay plans
to finance the acquisition and receivables with a combination of cash
and available financing resources including eBay's
existing line of credit. The acquisition is subject to various customary
closing conditions and is expected to close in the fourth quarter of
2008.

eBay anticipates that Bill Me Later will generate an estimated $150
million in revenue in 2009. For the fourth quarter of 2008, eBay expects
the acquisition to be dilutive to non-GAAP and GAAP earnings per share
by $0.03 and $0.05, respectively. For the full year 2009, eBay expects
the transaction to be dilutive to non-GAAP and GAAP earnings per share
by $0.06 and $0.13, respectively. eBay expects the deal to be accretive
in2011. For more information on how non-GAAP financial measures are
calculated, please refer to eBay's second
quarter earnings release issued on July 16, 2008.

eBay Inc. will host an investor conference call today at 5:30 a.m. PDT
to discuss this announcement. A live webcast of the conference call can
be accessed through the eBay Investor Relations Web site at http://investor.ebay.com.
An archive of the webcast will be accessible through the same link.

About eBay

Founded in 1995, eBay Inc. connects hundreds of millions of people
around the world every day, empowering them to explore new opportunities
and innovate together. eBay Inc. does this by providing the Internet
platforms of choice for global commerce, payments and communications.
Since its inception, eBay Inc. has expanded to include some of the
strongest brands in the world, including eBay, PayPal, Skype, StubHub,
Shopping.com, and others. eBay Inc. is headquartered in San Jose, Calif.

About PayPal

PayPal is the faster, safer way to pay and get paid online. The service
allows anyone to pay without sharing financial information and gives
consumers the flexibility to pay in any way they prefer, including
through credit cards, bank accounts or account balances. With more than
62 million active accounts in 190 markets and 19 currencies around the
world, PayPal enables global ecommerce. PayPal is an eBay company. More
information about the company can be found at https://www.paypal.com.

About Bill Me Later, Inc.

Bill Me Later, Inc. is a leader in the digital payments industry with
its popular Bill Me Later(R) product and
flexible financing programs. The rapidly growing Bill Me Later network
enables top-tier retailers and travel providers to offer an effortless
payment experience to high value customers. In the small business
sector, Bill Me Later, Inc. is pioneering payments with the Bill Me Later(R)
Business service tailored specifically for the small business buyer. The
Bill Me Later, Inc. network includes hundreds of top-tier merchants
including AirTran, Apple, Borders, Bluefly, Continental Airlines,
eLUXURY, Fujitsu, JetBlue, Toshiba, Toys "R"
Us, US Airways, Walmart.com and Zappos. Millions of consumers rely on
the safety and convenience of Bill Me Later's
payment solutions when shopping online, via phone and in-store. Founded
in 2000, Bill Me Later, Inc. is a privately held company headquartered
in Timonium, Md. with additional office locations in Hunt Valley, Md.
and San Francisco. For more information, visit www.billmelater.com.

Forward Looking Statements

This announcement contains forward-looking statements relating to eBay's
future performance that are based on its current expectations, forecasts
and assumptions. Those statements involve risks and uncertainties, and
actual results may 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 regulatory approval for the
transaction; the possibility that the transaction may not close; the
reaction of consumers and Bill Me Later's
customers; downturns in the financial markets and the credit industry;
the future growth of Bill Me Later; the reaction of competitors to the
transaction; the possibility that integration following the transaction
may be more difficult than expected; the increasing need to grow
revenues from existing users in established markets; an increasingly
competitive environment for eBay's
businesses; the complexity of managing a growing company with a broad
range of businesses; the company's need to
manage regulatory, tax, IP and litigation risks (including risks
specific to PayPal and the financial industry); the need to upgrade
technology and customer service infrastructure at reasonable cost while
adding new features and maintaining site stability;
foreign-exchange-rate fluctuations; changes in political, business, and
economic conditions; the company's ability to
profitably expand its business model to new types of merchandise and
sellers; and the impact and integration of recent and future
acquisitions.

More information about factors that could affect eBay's
operating results can be found in the company's
most recent annual report on its Form 10-K and its subsequent quarterly
reports on Form 10-Q (available at http://investor.ebay.com).
All forward-looking statements are based on information available to
eBay on the date hereof, and eBay assumes no obligation to update such
statements.

* Bill Me Later consumers have 28-46 percent higher repeat usage than
other payment offerings, according to Javelin Strategy & Research
(2006). Merchants offering promotional financing with buyer credit on
eBay saw an increase in average selling prices ranging from 50-250
percent depending on the type of promotion they offered (eBay study,
2006). A study conducted by Northstar Research Partners commissioned by
PayPal showed that 56 percent of users are likely to purchase from a
retail site if a deferred payment option is available.

SOURCE: eBay Inc.

PayPal Inc. 
Sara Gorman, 408-204-9015 (Media) 
sgorman@paypal.com 
or 
Bill Me Later 
Sara Parker, 443-921-1820 (Media) 
sara.parker@billmelater.com 
or 
eBay Inc. 
Tracey Ford, 408-376-7205 (Investor) 
tford@ebay.com

Copyright Business Wire 2008