Small Businesses See Increased Revenue and Improved Market Reach after Moving Online; IPSOS Survey Evaluates Benefits and Challenges of e-Commerce

Small Businesses See Increased Revenue and Improved Market Reach after Moving Online; IPSOS Survey Evaluates Benefits and Challenges of e-Commerce

New research shows that small
businesses saw increased revenue, improved business efficiencies and widened
market reach after moving online, according to a recent study from IPSOS,
commissioned by PayPal.

With the number of small businesses growing in the U.S. every day, many business
owners are moving online to increase market presence. However, according to
research firm IDC, at the end of 2004 only about half of the nation's small
businesses had their own Web sites, up from about 40 percent in 2002. IPSOS
surveyed 900 companies, each with annual online sales of $50,000 to $5 million
and asked about the benefits and challenges found in operating an e-commerce
site.

Overall, 77 percent of the small businesses surveyed said that an online
presence had a positive impact on their businesses. Sixty-five percent said that
the biggest benefit of accepting payments online was the ability to increase the
number of customers, while sixty-four percent cited notably increased revenue
and sales.

"Opening up a storefront on the Internet means that you're opening your doors to
potential new customers and revenue," said Stephanie Tilenius, vice president of
PayPal's merchant services group. "PayPal works with many small businesses that
tell us about the power of accepting payments online, and how it helps them
expand the reach of their products and services."

Nearly three out of four small businesses surveyed (73 percent) said that
conducting business online enables them to receive payments faster, and 70
percent said they could conduct business more easily with e-commerce. Among
online merchants that offer PayPal, 79 percent indicated that accepting PayPal
allowed them to receive payments faster, and 76 percent noted it enabled them to
operate more easily.

Entrepreneur magazine Editorial Director Rieva Lesonsky noted that, for any
small business, cash flow is vitally important. "Paying suppliers, employees and
vendors in a timely manner is critical to business growth," said Lesonsky.
"Receiving money quickly from customers is the first step for keeping this
process running smoothly."

E-commerce not only boosts sales and increases cash flow for small businesses,
but it also helps them to operate more efficiently, according to the survey.
Reductions in administrative costs were noted by 73 percent of respondents,
while 62 percent of the merchants surveyed saw gains in employee efficiency
after moving their businesses online.

The survey showed that e-commerce did not appear to result in a reduction in the
number of employees needed to run the business. Presumably, staffing to handle
increased shipping activity, keep the Web site current, ensure online security
and communicate with customers required employee levels to remain the same.

Lesonsky recently wrote The Entrepreneur's Guide to Doing Business Online, a
handbook for small business owners with tips and steps to follow when
considering an e-commerce strategy. The guide is available for download at
www.paypal.com.

About IPSOS

IPSOS is the fastest growing market research company in the U.S. and among the
most trusted research brands in North America. With more than 1,300
professionals and support staff in the U.S and Canada, IPSOS offers a suite of
survey-based services -- guided by industry experts and bolstered by advanced
analytics and methodologies -- in advertising, customer loyalty, marketing, and
public affairs research, as well as forecasting and modeling. IPSOS companies
offer a complete line of custom, syndicated, omnibus, panel, and online research
products and services. To learn more, visit: www.ipsos-na.com.

About PayPal

PayPal, an eBay (Nasdaq:EBAY) Company, enables any individual or business with
an email address to securely, easily and quickly send and receive payments
online. PayPal's service builds on the existing financial infrastructure of bank
accounts and credit cards and utilizes the world's most advanced proprietary
fraud prevention systems to create a safe, global, real-time payment solution.
Founded in 1998, PayPal has more than 56 million member accounts and is
available to users in 45 countries around the world. More information about the
company can be found at www.paypal.com/.

SOURCE: PayPal


CONTACT: Airfoil Public Relations
Elin Spahr, 313-887-7209
spahr@airfoilpr.com

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