Analysts Smile on Korean eBay Deal

Analysts in both the United States and Korea were reacting favorably today to
eBay’s plan to spend about $120 million for a majority stake in Internet
Auction Co. Ltd., Korea’s largest auction-style Web site

Goldman, Sachs analysts said that they “view the acquisition favorably as it
extends eBay’s platform to the sixth largest global Internet market and
because the transaction was done at a favorable value.”

And an analyst at SK Securities Co. in Seoul was quoted in published reports
as saying the deal is good for both companies “as they don’t need to compete
with each other in other Asian markets.”

eBay said 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.

The acquisition is expected to increase eBay’s 2001 consolidated revenue by
approximately $20 million, the company said. 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 to be negatively impacted by about two cents.

The deal gives eBay about 2.8 million users in Asia’s second-largest online
market. Goldman, Sachs said eBay paid about six times Internet Auction’s 2001

Steven Schwankert is managing editor of

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