host: shortly after you started the stock fell to $10 a share. you can splabe that later. but -- the stock closed yesterday at more than $55 a share which you informed me earlier is at an all-time high. you came to e bay through an interesting route. you worked as a consultant advising various companies for over 20 years. and also played basketball. and we were talking about how your son is playing on the high school basketball team. before i start to get a sense of how well you know e bay could you raise your hand if any have ordered from e bay before? and could you separately raise your hand. how many have used pay pal the mobile payment service?

so just to open, what does this tell you? your stock is at its high? does this mean that you're sat rated that there's not a lot of customers to get or that there's a long way to go here? >> first, thank you for using e bay and pay pal. and please keep using it. what -- we're on the cusp of what i think is one of the most exciting and transformative periods in two enormous industries in which we participate. retail and payments. and i'll make a statement. i think we're going to see more change in how consumers shop and pay in the next three years than we've seen in the last 10 to 20. so that's more change in three years in consumer behavior than in the last 10 to 20. and the analogy i would use is your industry media. how many of you have an ipad? ok.

how many of you scommume your media in a fundamentally different way since you've gotten your ipad? me too. right? i now get the majority of my media through my ipad. my news, my entertainment, my tracking what's going on in the market. i want my media when i want it, how i want it, where i want it. i'm not tied to having my newspaper in my driveway or the magazine that comes on time. it's now on my terms. the ipad is less than three years old. so we talked about digitization and media for 10, 15 years, late 90s and early part of the decade. and then a piece of technology comes out and there's transformative change in a very short period of time in consumer behavior and there's been big winners and losers. the same thing is about to happen to retail. and in this case, a piece of

technology is having a transformative effect. in particular, the smart phone is blurring if not obliterating the line between on line and off line. if i would have been up here three years ago i would have said e bay competes in the e commerce market and e commerce is 5% of all fine retail and it's going to double or triple and that's a great market. but consumers have grabbed hold and now that line between e commerce and retail is obliterated. so we just call it commerce now. think about this. in over half of all retail transactions in the u.s. last year, the consumer accessed the web at some point in their shopping experience. think about the number of times you go to a store now where you haven't checked the web at some point, done a search, figured out what it is you want to buy, maybe read some reviews, maybe checked prices. people are doing it on their

laptops, now mobile phones, in home, on the street, and in the store. >> so are people moving from actually looking on line to buying on line then? >> it's both. it's a seemless device. so now what a consumer does is say i want to buy whatever. i want to buy a new pair of shoes. i'll go on line, i'll check what are the shoes i want. i can make a decision. you know what? i want them. i'll buy them and have them shipped home to me tomorrow. or, i want to try them ofpblet i want to make sure they're available in my local nordstrom and i'll walk in and try them on and buy them. maybe i'll buy them and use e bay now so that i can order them from any retailer and have them delivered to me within an hour. the pointed is the consumer is in charge. the consumer now feels they have a mall in their hands. and they want choice. they want a seamless experience across online and offline.

they don't see it as different. they're just buying stuff. >> is mobile growing fast anywhere many ways at this point than even you had predict snd >> it's been stunning. we bet early on mobile. we made a big bet four years ago. and last year there's been over 120 million downloads of e bay mobile aps. last year we did $13 billion of volume moral commerce volume. that is volume where people are closing a transaction on a mobile device. people are buying 8,000 cars a week on e bay mobile. mobile payments. $14 billion in mobile payments. that's not swiping. that's people pressing, saying you know what? i'm going to buy something on a mobile device. and we'll do over 20 billion of mobile payments and mobile commerce volume. and the curves are stunning. this is happening all over the world as more and more people are using their mobile devices to shop and to pay. >> back when your stock was $10

a share e bay, as many of us who grew to know e bay as a purveyor of used collectibles, how are you trying to to be honest i think people still have that image and you've reversed that in many ways and are selling many more new goods. how are you trying to really change your image? >> what happened was the internet is an unparaleveled place for a company to reach global brand and e bay had a phenomenal first ten years. but just as an internet company can disrupt it can be disrupted. e bay has not kept up. so over the last five years we have completely reinvented the e bay. it's still an online marketplace but five years ago it was 70% auction, 30% fixed price.

five years ago there was probably half new and half used. five years ago there was no trust policies around it. the e bay of today has 70% fixed price, 30% auctions. and that's on its way to 80/20. and consumers are driving that not us. great deals from all over the world. the e bay today is a money-backed guarantee. buyer protection. and so e bay of today is growing very attractively. grew 19% in the fourth quarter. so the new e bay is here. user growth is accelerating. and people that have used e bay like it. a lot of people are coming back that haven't used it four or five years and saying i like what i'm finding. and then we're getting a lot of new users, still young users. we got 4 million new users last year who registered on a mobile device. >> my son is into shoes, basketball shoes.

and when i told him i was interviewing you he was actually impressed. he says that -- it doesn't happen that often in my world. but he said that e bay is the place for shoes. i must say i went up there and i was a little confused as to what is new, what is used, what's a collectible. could you explain how you're not necessarily selling, you're matching buyers and sellers but you're actively promotor more new rather than just the collectibles. >> what's happening is because part of the reason is because e bay is on the top ten on the i phone deck for many, many people. and that's where all the action is. and more and more retailers are realizing they're not going to get on the top ten of the deck and we are. so we have more and more retailers and others saying, i want to get my inventory on e bay because that's where my customers are starting to shop. we will send someone into a store if they want to go into a

store. so we give consumer choice. but take shoes. we have a, as you say, a lot of retailers and suppliers. if you're going to sell a vintage shoe, that's where auction matters because the price and value is in the eyes of the beholder. and what's happening is technology is beginning to come along. and i'll say i think we are just on the beginning part of how these devices will be used and how you shop and pay. i'll give you two examples. we have the e bay fashion ap. if you wanted to buy an i phone and you say i want to buy an i phone, tap it into your laptop or mobile phone, you get that. right? it makes sense. but let's say i want to pretend i like your shoes and maybe they're basketball shoes. if i said i like that pair of shoes. how would you type in? blue shoes that are -- no you

take a picture. and so if i went into the e bay fashion ap, i take a picture of those shoes and it uses visual search to match shoes that have that color or that pattern. if it can identify that it brings back results in my size of that shoe. and so this is pritery search technology we're using. if i can find anyone else who is using it better we'd love to partner or buy them. but within a year, by tend of this year i'll be able to take a picture of your watch, of anything and have it bring back inventory that matches that. think about how that can change shopping. you're walking along you see something you like you take a picture. what would that cost? so that's just one example of i think how we'll use these devices differently. the second example i would use s geotargeting that's embedded inside these.

i can today go into mobile ap press local, find a local merchant that accepts pay pal here and i can in essence check in. and what that does is when let's say i want to go to the deli for lunch and i hate standing in line. i can check in, then the deli has my picture and name on the cash register. they know who i am. and when i walk in they say would you like the regular? i have it waiting for you and you come around the line. so it will allow us to when we walk in the store to be known if we want to be and get personalized service, where we can go around lines and we can -- sow then the store knows you're in the store and they can have a personal relationship with you. so i think we're going to see profound changes in how these devices are being used over the next years and that's going to drive that shift in shopping and paying. >> how are you addressing

privesy concerns? i would say that i would have some issues perhaps walking into a store and having a retailer know who i am and what sort of clothes i like. younger generations may not. can you opt in and out? >> absolutely. i think privacy is a very important issue and i think it's an issue that's going to be -- at some point in the next two years there's going to be a trigger point where we're going to have a national dialogue about what's acceptable and not acceptable. here's how we're approaching it. number one we never share your information with anyone else. your personal information is never shared and your purchasing is never shared. that's between you and the retailer. we never have and we will not share that. two, when something like check-in we just make it opt in. to reach me you have to do it every time. so if you want to check into the deli you trust but not check in anywhere else that's fine. and i think actually the i phone did a nice example. you know how they property you for do you want to let your location be known every time

you go into a new ap you have to make that choice. i think that's a good standard to give the consumer the choice but make it opt in and make it opt in in each instance. so that's what we're going down that path and i think it's the right path. but i think it's going to be necessary for us to have some national dialogue and debate on privacy so we don't have a flash point and then overregulate it and slow down innovation. and i think by and large there's a desire to -- certainly we have a desire to be responsible. interestsingly there's a survey who is who is trusted most and both e bay and amzone are in the top ten. so we're not trying to do strange and different things. we're in commerce. >> let's talk about amazon for a moment. your business models are quite different. amazon reported strong revenue but a lot cost involved. you have no interest in running

your own distribution centers the way they do? >> i think amazon and what we do are, while both in the same broad market, have a very different approach. and i believe what jeff has also said many times there are going to be multiple winners in commerce. this is not a zero-sum game. as i talked about earlier, there's going to be multiple winners. amazon is a retailer. they're building out ware houses and has done an incredible job and they're fundamentally a retailer. we're a technology platform that's an online market place and partner. we don't own the inventory. so what we do is partner with sellers of all sizes, initially small smallers and now medium and now some of the largest in the world. we're helping them compete in this technology or commerce environment and we will not compete with them. and so retailers will come to

me and say, you know what? amazon's our biggest competitor. but i've got 2,000 stores across the u.s. why can't each of my stores be a mini ware house? why can't i use those to get goods to my consumers better than anyone else can? and so what's being built out is what i referenced earlier is an eco system that allows the consumer choice. where i can buy it and have it delivered to me tomorrow overnight. i can buy it and go look at it and pick it up in the store closest to me. and remember, a lot of people like to shop. they like to go to the store. most of us may not. in this room. but if i know i can pick it up at a store half a mile or i can buy it and have it delivered to me, and we created an ap which allows any retailer to go in, people buy from this, and they have it delivered to them within an hour. and what's interesting again is the technology delivering --

anyone here bought something and you have it delivered to your house that someone needs to be there to sign for it and they don't or delivered to the office and it's in the mail room somewhere and you can't get it and ups puts a sticker there and you call the number to get the sticker? you know. they don't deliver on saturday. you know. home delivery or even office delivery can be irritating. think about what e bay now does is it delivers it to your mobile phone. so the courier literally watches where you are. so if i'm here, i'm sitting on the fourth floor of my office and i go down to get coffee and they bring it to you and you watch where the courier is. so it's an actual delivery. again, you choose that. but you relieably get it. so i think choice, i think retailers are really the most innovative retailers are being very aggressive at giving

consumers choice whether shipped overnight, picked up in store, or brought to them quickly. >> there's some concern that amazon knows a lot more about its customers than you do because you're essentially matching buyers and sellers. and there's people who pay extra for amazon prime and go up in one click and have something delivered perhaps not as perfectly as that but that they simply have more data about their customers than e bay does since you're essentially matching. do you think -- >> we have the same data about our customers. we have a lot of data. but here's the difference. tweer trying to allow retailers to get better data about their customers. here's something i didn't realize. that an offline retailer -- i had a retail ceo say to me, john, here's what i'm concerned about. i can tell you exactly what items got sold in which of my 2,000 stores yesterday down to

the skew level. down to the hour of the day. i can tell you roughly how many customers came in to my stores. but i don't know who they were and i don't know what who bought what. and nt i hadn't realized it but an offline retailer doesn't know who is in their stores because the credit card system can't be tied to the point of sale system. you get the last four digits. the retailer gets the last four digits, don't get what the person bought. and so they can't link it to their customer information system and this retail ceo says i look at you and amazon and you know who drove into your parking lot, who walkt into your front door. what ilse they browsed down and what order every item they picked up and looked at and put back in their shelves. when they got to the chokeout what they took out and decided to change and what they bought. and it scares us that we don't

have that information. and so they have pulled us off line we want a technology partner and what pay pal the help them do, when you pay with pay pal, in a store the retailer gets to say, have a relationship with you that says we know what you bought, we can give you loyalty points, we can give you -- and so we're using our technology platforms to enable retailers to build a relationship with you. and so they can provide more customized service. and that data is between you and the retailer. our platform is just enabling it. >> how many retailers do you have offline? usually pay pal. and where do you expeakt that to go? there were some glitches last week with pay pal. how do you -- could you explain how it works? apparently it's in the cloud and not on your phone. >> those of you that know pay pal, the business model is very simple. you a in essence, put in your credit card or bank card in a

digital world in the cloud. when it was created it wasn't called a digital wall in the cloud but that's what it is. and 120 million people around the world have at least two financial instruments in a digit wall in the cloud that's encrypted and any time you use pay pal on line or on a mobile device or in a store your financial information never leaves that encrypted vault in the clouds because pay pal's in essence sends an encrypted to code to wherever you're using it. so you enter that and it never goes through the air waves and never into a computer or mobile phone and that's how pay pal was created nom the beginning. thots how it works on line. and what's interesting is consumers don't want to enter their information into a phone because they're afraid a it's inconvenient if you're like me you get my glasses on and try to figure it out. b, they're afraid it's going to be stolen. but with pay pal it's one click.

on e bay or off e bay. so let's say i have my american express card that's how i'm funding my pay pal wallet because i want to get membership rewards and jim's one of my favorite mentors. and i can use my american express card through pay pal. and the off line world we've now connected with 23 of the largest retailers in the country. we integrated to their existing hardware and software. so for instance if you go into home depot, go into this weekend, buy whatever, when you come to the checkout line say i want to pay with pay pal. they'll show you the little swipe, the terminal there there's a button that says pay pal. the next screen asks for your mobile telephone number and a four digit pin. you put that in. and you're done. you've just paid. you don't need your -- hands free payment. you don't need your wallet or your mobile phone.

the minute you pay, the receipt is texted to you. so you know exactly who used it and home depot knows what you bought so they can have a relationship with you. so what's happening is in the external world again i say how people will change. you can silt there and that's paying. and that will be available in now 23 national retailers we've signed a partnership with discover where we will be in 7 million retail locations across the u.s. starting the second half of this year and with pay pal here which is our swipe device that allows small businesses to accept pay pal. so we're trying to get coverage in the offline world. offline is new for us. i didn't think we are going to be in but the retailers are pulling us in and we'll try to get coverage over the next six to 12 month soss that you can use pay pal in any location. >> going back to your consulting days. is it fair to say that you

doubled down on pay pal? apparently when e bay was first started people were sending cash through the mail and pay pal kind of evolved as e bay did but it wasn't when you came to the company very much associated strictly with e bay and this trade of used goods. have you doubled down on pay pal as the future strategy for e bay? >> i wouldn't call it the future. five years ago when i took over we had some strategic choices to make. the first was we needed to turn around the core business and i knew that was going to be hard and time consuming task. and so that was the core of our core. we -- i love skype it was a wonderful business but there wasn't synergy between skype and the rest of our portfolio. so we divested it and ended up receiving more for it than we paid so we got out of that and were happy to do so and now skype is with microsoft and

doing fabulously. i needed to make some bets while we were turning around the business and the two we made were mobile and pay pal. so yes there was a period of both turn around and significant investment and pay pal is a wonderful business it has enormous potential. >> what's it like to work inside a company versus advising a company from the outside? what's one of your biggest surprises about actually? >> the truth is when i was at bane, i was in leadership roles most of the time i was there. i actually wasn't that good a client partner. i was a better leader than i was consultant so i rab our west coast and i ran the firm. and in many ways a lot of the leadership principles are similar of with a you need to do. what's been different is really two things. one, the consumer internet space has been an enormous learning experience for me and it moves stunningly fast. i get up every morning paranoid

that there is some 22 and 24-year-old kids who are building something that i couldn't even think of that are going to disrupt us. and on the innovation of what's happening, the innovation of what's happening right now around mobile, around areas of commerce, around social is just stunning. and i see these things and i think, i never would have thought about it. half i don't even understand initially. but then you learn and you begin to identify here are some of the trends that are coming. so learning has been a wonderful experience and still continues today. and then two, running a public company is different than running a private company. and there's some pros to it and there's some cons to it. >> you've acquired more than 40 companies along the way. you have a rather interesting to my way of thinking, taking talent on or companies on. most companies that make

acquisitions clean house of the company they're acquiring and you actually take a different tact. could you explain explain? again, the balance of how injecting innovation into what is now a pretty scaled organizations, we're driving innovation across the company. but in the consumer internet there's also a need for seeds of what i would call disruptive innovation. what i was talking about earlier. someone that sees the world differently, doesn't know better and tries something different. so i've found that acquisitions are great way of bring in disruptive innovators. so we've made 20 acquisitions roughly in the last two years and 18 of them have been small acquisitions where we're buying small teams of talent or technology and with them comes founders. a screening criteria is does the founder want to stay and innovate its scale inside e bay? and so we've now got 10, 12, 14

founders who have stayed and they're getting a chance to innovate its kale sca inside e bay. and i'll give an example of how this works. we bought a company, a young entrepreneur jack abram who wanted to put -- what it does is it gets technology that gets all the local retailer's inventory and puts it on line so you can see what exists when you do a search so you know if you can pick it up. a 25-year-old kid. we put him in chark of e bay local. so he comes about a year ago and said i have a great idea. he said i want to build a home delivery system for retailers that works just like that. so that i'm going to build an ap that any retailer can put their inventory in, a consumer can buy it. i think i can get it delivered to people's homes for $10 or less and maybe for 5 and within an hour or two. i'm like really? and he said yeah.

it's going to be easy because here's what we're going to do. there's delivery people all over the street of new york and san francisco and like uber creates usage of excess capacity of drivers and allows you to get a car within three minutes. i'm going to build the same kind of thing so that when someone buys something i'll bid it out to the delivery people, who will deliver it within an hour. and i think how are we going to make -- how is that going to work? he says don't worry about it. so he goes out and he builds it in three months. and we launch it in san francisco. and people love it. retailers are putting their e entory in so you go into bay now it's a free ap. you can shop, you buy something and it will be delivered. we charge you $5 and it will be delivered within one or two hours to where you are. and if someone brought me a

power point or consulting presentation a year ago and said, this service can be there, i would have said no way. but he said of course it should work that way. so there's a real role of these disruptive innovators and when we see them and they want to innovate its scale -- and he loves it because it's got e bay's brand on it. it's not a startup. it's got scale. so we're trying to be the most attractive home for these innovators out there. >> is it profitable the same day delivery and are you going to expand it? >> this is a test and learn. so right now we are only charging the consumer 5 bucks and it probably costs us ten ut the retailer are willing to pay that. we're testing. retailers want to have same day delivery but no one retailer can justify it on their own. so if we can build a technology platform, and get our ap and

we'll put our brand on the ap because we've got people using it, then they can all scale together. they can all combine together and get home delivery. and that's what we're trying to that is what we are trying to do. >> we had an inauguration. i went to get your sense of on the economy. also on your bain experience what you thought of the outcome of the election. >> i will answer in the reverse order. yes, i worked with mitt for many years at bain. some of you may know that my wife is an ambassador for president obama. she was a strong supporter of obama. the photos ask me. people would always ask me. i supported the president for

one simple reason -- i like to sleep inside. [laughter] there is more truth to that then you know. if you knew my wife -- [laughter] on the economy, i hope and i believe the president will get serious on the economy in the second term. i hope he will build a strong economic team that has diverse skills and practical business skills. hope they can reach out to business. what is happening in washington is enormously frustrating. gotfiscal cliff -- we

solutions out there like simpson-bowles. you may not like pieces of simpson-bowles, but at least it is a starting point to have a dialogue and address some of the issues you have got to address. my hope is that there'll be a enough restaurant congress in the second terms of that we can begin to get some of the changes that we need to make it our economy will remain competitive on an ongoing basis. >> you are a supporter of the president? >> i see no reason why it cannot be better. andill not create growth jobs unless there is a stronger relationship. both the companies and small businesses.

we had 25 million active sellers on ebay. roughly three to 4 million of them are small businesses. it is a small business. this operated in small state new york or outside detroit. they're creating jobs were large companies are not creating jobs. we're trying to protect their interests of that they thrive and grow. youne last question before open it up to all of you. you have $6 billion of cash. maybe the expected 8 billion. a lot of people expect more acquisitions. any hints of where you are looking? >> our strategy is clear -- our business generates strong cash. we are blessed with that. we first invest in organic growth.

organic growth in the fourth quarter was 19%. 19% with a 28% margin. or as i said earlier, the smaller acquisitions where we buy teams and talent. we have only made really two or three large acquisitions. that was bill me later, which is working out very well as an extension of paypal. g market in korea really cemented our partnership with korea. another is an extension of the ability to serve large brands

and retailers. we only do it when we think it is right for our company and provides returns for the company and shareholders. >> questions? in the back. there is a microphone. >> fascinating presentation. i'm the ceo of interactive advertising bureau. one of the biggest buzz phrases is big data. how do you define big data? in your competition with other major data center retailers and as walmart and amazon potentially apple, how do you see the competition developing around the acquisition and use of consumer data in marketing advertising and retail? you talk about privacy. how do you view present and future regulatory environments

around privacy and whether you are participating in actions to stave off the worst of regulations? >> i will work backwards. yes, we do participate. i did not go to davos this year, but last year -- still here, i was in the commission with commissioner redding and john leibovitz. how we get ahead of the curve to have a common-sense dialogue about privacy and data so that we avoid the active regulation. i'm a big believer in that. second, we are simple commerce company. neversiness model works sharing your data with anyone except you and the person you bought it from.

we are not an ad model. we are not a social model. we have questions of what should be shared and what should not. in the core business model, the data in our business is relevant. there's no reason why when you type in something on an ebay search that we should give you the same results that we give rebecca when she types in the same thing. we know what your purchase history is. we should give you a better experience today based on what you have done historically. we will not share that. we will not share your data with anyone else. i think there is a lot of opportunity to use big data to have a more customized and personalized experience.

if you choose to share it with others, that can make it even better. as i said earlier in the broader topic and there needs to be a dialogue around privacy. we need a proactive one now than have regulation down the road. all it will do is trigger the next wave of innovators to figure out a way around it. >> question right here. >> i would love to hear more about the individual sellers. what are you doing to make the process easier in addition to perhaps uploading facebook or twitter?

i have not sold anything in two years. you may already be doing these things. >> please, try today. >> ok. >> mobile has been huge. we have a lot of consumer sellers still. we are getting 2 million listings a week off mobile devices. if you have something you want to sell, take a picture and boom, you are done. beenisting process has very streamline. the bigger challenge for consumer sellers is selling it. four years ago, if it is a tuesday or wednesday, you sold something and someone bought it and would ship it over the weekend. that is no longer acceptable. buyers expect more. we are providing services so that you can say i want to sell

this, but i want someone else. ebay, can you link this to someone that can get it shipped in a timely fashion? that is what we are working on with consumer sellers so they can provide a competitive experience with retailers. consumer sellers are still an important part of what we do. it is a smaller part. whatt have our volume is we call top rated sellers. small businesses providing retail experience. >> thank you. i will try tonight. >> hi. thank you. this the big privacy data question. everyone is fundamentally good or something like that. ebay retail business and paypal, you do a lot of fraud prevention.

i know you do not give out numbers. can you talk about whether it is going up or down? what are you doing? when you put in things like seller ratings? can you give us a sense on how important that art of the is this is? >> yes, we invest a lot in fraud. paypal's competitive model is that we have competitive fraud models. huge volumes are traded. think about it. stranger to stranger. 20 percent of it cross-border, 20% of it on mobile devices. less than 3% loss.

-- less than 0.3% loss. those fraud models allow us a safe experience. it is getting safer and safer. we are getting more progress in that ongoing battle. money is moving inside our company. we invest. we are gaining on that in terms of online fraud and security. the interesting story is that if you look at where most of the online fraud is occurring is that it is incurring in certain countries. we were in russia three years ago. i said there was so much fraud going on. there was not enough cooperation going on between the russian authorities and those of the industry trying to fight fraud. since then, they are participating.

governments understand there are certain hotspots for most internet fraud. the government are now cooperating. we put over 60 people in jail in romania who were internet fraudsters. ultimately, i think that process will continue. i think it is getting safer, not less safe. >> can i just need in a question about your global strategy? >> a share. -- sure. >> there are many competitors abroad. how much of your focus is moving overseas? >> ebay is global. 60% of the revenue is outside the u.s. paypal is 50% outside of the u.s. 25% is cross-border. they're both very global entities.

we are continuing to expand globally. there are 2 billion internet users. that'll be 4 billion in the next few years. look at where that growth will be. 80% will be in emerging markets. people accessing the web for the first time in their lives. it can be done through a phone or a laptop. we see enormous growth opportunity. we are growing in those markets.that the leading commerce market in russia. it is all import. it was not because we did anything. russian consumers coming online want to buy things that they cannot get locally. they go on to ebay. china is an enormous market. we have a strong export business out of china.

over $6 billion of volume. these are people that may be work second shift in factories. overe get great deals all the world. and domestic china, we are prohibited from competing. it is not a level playing field yet. alibaba has done a great job. jack is a great entrepreneur. i spoke at his ali fest a couple of years ago. they have build a great business. we will see if they look to go outside of china. i think there'll be opportunity to work together. >> thank you for coming to speak today. i have three questions. amazon's biggest criticism has been the buildup of a fulfillment infrastructure. they have bought warehouses, and yet, they are for feeling a lot

of the business that sellers on your site are doing. will you get more into fulfillment? second, there has been a lot of franchises that were like the ebay drop-off points. they have come and gone. do you see that as a viable is this model? third, do you think you'll spend the rest off or buy it or integrate it mercado libre? we are now competing with them in payments. is in brazil. you will see us compete more and

even a little bit with ebay in central and south america. on the distribution centers and fulfillment, many of them use fulfillment by amazon, and i have talked to sellers and they are very wary of that because they view the amazon as a potential competitor who could go first party at any moment. these small businesses are able to provide very good service now. they work with fedex and ups and provide excellent fulfillment. a small amount can handle it. these small businesses provide outstanding return service. able to do it without someone else's facility. was either astion drop-off points. for instance,if someone wants to sell something but does not want

to handle fulfillment, we will say, you can drop it off. you drop it off before you listed. when it gets sold, we make sure it gets delivered in a retail- like way,retail likes standards. >> there has been franchises that have come and gone. they have not been part of ebay. the biggest part of your failure is the stores have to take so much of a percentage to make it worthwhile, yet the sellers do not want to use it because they do not get much back after they sell. they have certain minimums they can sell. it has not really been a viable business model, but in theory, the consumer would like it. >> i think you are going to see more of it. back in the day, listing was a cumbersome process.

figuring out how to get something sold in this marketplace was cumbersome. today listing can take less than a minute. marketing yourself is much easier. the cost of doing things is much lower. they are big and small. we have a thing where if you want to sell your cellphone, we have a partner, so if you go on ebay, and say, here is my iphone 4, we will give you $140 for it, and you say yes. a fedex envelope comes the next day. you put it in that envelope. you send it away. we have a third party that takes all of this. refurbishes them, turns around and resells them. they do tens of millions of dollars in business, so that is

just an example of how a variety of industries are forming that help people sell. it is a different scale than it used to be. >> we will take a question in the middle, and then we are back. >> you stress the importance of privacy. let's say the government comes to you and says we have a terrorist investigation, and we want to know the buying pattern. what do you do about that? >> you hope that request is covered. we comply with the laws of the land would be the simple answer, and we would not operate in lands where we do not feel good about the laws. >> you are saying there is no guarantee of privacy. >> we comply with the laws of the land. of there is no guarantee

privacy. if you have done something illegal and they have reason to believe it, and we cannot stop a court order. the reality is it does not happen very often, but we cooperate with law enforcement around the world. it is often us going to them saying, we think there is a problem here. would you investigate? we work with law enforcement all the time to try to identify and online criminals and get them convicted. >> rebecca, are you ok with that? >> we have done a lot of work on privacy. it is a fascinating and difficult terrain, but i would agree the powers are expanding on the part of the government, because terrorism is a present a threat.

i agree with your statement, but it is an important to reign over the next couple years. >> i do not think we are different from american express or ge. the laws of the land are the laws of the land. >> i would say if we ever saw anything we did not feel comfortable with, i would have raised our hands, and we would not do anything we thought crossed the line. >> you can always call us and tell us. >> i work in luxury and fashion and beauty. i have a question on food. there has been a lot trying to bring food to the internet.

i would like to hear your thoughts on the plan of ebay with food. do believe one day you will sell food on ebay? >> i do not know. if you are talking about a grocery delivery, the only place i have seen the working is seoul. because it is so dense. you can buy cases of water. a case of water, you are paying $6, $7, and it costs more to deliver it and it does to buy the water, so you need a lot of density. we see that on ebay and off ebay in densities. i do not know if home grocery delivery work in the u.s. walgreen's is a participant, so

if you need toothpaste and shaving cream you can get it delivered at home. the other thing is these devices can change your experience with food, and this is more going out. if we have a pilot in california with jamba juice and you say, i want a smoothie. you order your smoothie, and you say, i will be there, and you walk in, and you pay for it. you go around. i actually think the delivery part i talked about earlier, there is no reason that could not be delivered to you as well. you think other food items. ordering out and getting things delivered in a convenient way,

if you are using delivery capacity that exists in other cities, i think you're going to see more of that. does that make sense? >> when you get involved? there is an image of a rotten twinkie on your side. if something is rotten, is that ok? the you ever get into the? get in the way of a transaction? >> maybe someone is into rotten twinkies. now the reality is anyone that off us to take something down, we do. amfirst week at ebay, what i confronted with a dilemma.

someone has listed a consecrated host. tenants,olic, and my both of them happen to be catholic -- one is dramatically opposed to taking it down and the other said, this is bad. absolute defilement of religion. i have got the bishops calling me. in that case, it was not the part of decision. we will take it down. weit is a fending any group, will take -- if it is offending any group, we will take it down, but it is an open marketplace. if people are into rotten twinkies. if the rotten twinkie association of us to take it down, we probably would. >> are you a competitor and a

partner with credit cards? apparently credit card companies are going to be able directly the cost of the credit card to consumers, and would that have the potential impact on your relationship with credit cards? >> i see it as a partner with credit cards. you put your credit cards in. if you want to pay with your amex gold card, or you want to pay with your visa mileage plus card, or you want to pay with a debit card, or you want to pay with something else, we give complete flexibility of choice. there is no way we can use our money to pay. we do not compete with them, and we pay a lot of interchange to the current association.

we are a technology leader that allows them to be present on line and a more convenient way in mobile and hopefully an alternative way to be present in the offline role. we are unable error and not a competitor. we want a relationship with technology. i view as us a partner. >> one last question. >> good morning. my question is more along the lines of culture at ebay and what you do to promote diversity of thought so you have measurable diversity and

inclusion in your organization. >> we are blessed -- frankly, our founder of iranian descent born in france is a true globalist, and what he cared about was positively impacted in hundreds of millions of people's lives around the world through trade and particularly through cross border trade, through global connections, the fact our platforms can connect an israeli settler selling to a palestinian buyer. think about that. in the offline world, that would never happen. online if the palestinian buyer says, that is of great watch, pays money, gets the watch, online they are just two people, and that is three much part of the vision.

pierre believes technology platforms can be bringing people together. now we can connect people, and we believe that. commerce can bring people together. itthat is our core purpose, attracts a diverse group of people. we have people from many different cultures. our team in any country are local. if we have global management, it is like the united nations. it is a global organization, and that is the real strength. a lot of people think differently in different parts of the world, and we benefit from that. >> one last question.

>> i am a retailer. my question is of demographics in terms of what percentage of your users, your listeners, buyers online are women, and which are men? >> we love working with your team, and you do some innovative things. it varies by category. we have by huge fashion business, and it is heavily female, and then we have a large consumer electronics and large auto parts business. auto parts. that skews heavily male. it really differs by category. dnepr a lot of the growth and where i see increased engagement, is when the women

demographic are engaging more and more. not want a quick, sterile experience. you and i may want to get in as quick as we can. this demographic loves the back and forth. they like to engage. >> i see a lot of young women want individually designed things. a lot of that is going on. i think that ebay is going to be one of the facilitators in that happening. it is a little frightening. the retailin business, but i think it is coming. >> i agree. >> thank you for a fascinating

discussion. just a couple of housekeeping notes. you can see excerpts on the website. we look forward to seeing you. i am sure it is going to be an interesting discussion on politics. i will turn it over for closing remarks. >> just three quick thank yous. one to all of you for coming on in the middle of the week. it is a little warmer. that is why we have such a great turnout. rebecca, you ask questions in a ploy is style, and you are great partners, and john, you demonstrate to me that you can actually practice what you preach. maybe there is hope for me. what you did nicely and what you do nicely as well as find new innovations.

it takes guts to innovate. we hope to see you soon. thank you. [applause] >> on the next "washington journal," republican and democratic strategists look ahead to the return of congress next week. we'll talk about the budget, gun and immigration proposals, and same-sex marriage. followed by the chief economist and senior vice president with the national association of realtors. then developments on the korean peninsula and u.s. strategy toward north korea and iran. -- live at journal" 7:00 a.m. eastern on c-span. >> they had a very