New Survey Reveals Majority of Small Businesses Believe Internet is Critical to Boosting Profitability; Small Businesses Anticipate Revenue Growth and Moderate Hiring in 2004

SAN JOSE, Calif.--(BUSINESS WIRE)--March 23, 2004--The Internet is playing an increasing role in driving profitability for small businesses, according to a national ACNielsen International Research survey commissioned by eBay (Nasdaq:EBAY). Results from the survey indicate that 51 percent of small businesses that utilize the Internet believe that the Internet has helped their businesses become more profitable. Fifty-eight percent say it has helped their businesses grow or expand. Fifteen percent say the Internet is necessary for their business' very survival.

The survey, based on the feedback of approximately 400 small businesses with less than 100 employees, also indicates that many small businesses view the Internet as a powerful sales tool. One out of three (33 percent) small business owners who use the Internet sell goods and services online, and 43 percent find sales prospects online.

“Clearly the Internet is helping fuel the success of many small businesses. The Internet helps small business owners acquire new customers, expand into new geographies, and purchase the goods and services needed to successfully run a business”

Additionally, many small businesses who use the Internet say they make online business purchases. Fifty-four percent procure computers and office technology online and forty-eight percent buy capital equipment and supplies on the Internet. Thirty-three percent buy inventory for resale online and more than one-in-five (21 percent) purchase office furnishings. Fifty-nine percent make online purchases of other business-related goods.

"Clearly the Internet is helping fuel the success of many small businesses. The Internet helps small business owners acquire new customers, expand into new geographies, and purchase the goods and services needed to successfully run a business," said Jordan Glazier, general manager of eBay Business.

Small Business Growth and Hiring

The survey provides evidence that many small businesses have a positive outlook on the year ahead. Seventy-six percent of small business owners predict stronger revenue in 2004, and 74 percent of the respondents expect a growth in their customer base. Despite the growth predictions, the survey reveals a moderate outlook on hiring with only 27 percent anticipating that they will add full-time employees in 2004.

This data further suggests that many small businesses are focused on improving their bottom line so they can increase their personal income. The survey supports that one in three (31 percent) small business owners say increasing their personal income is the single biggest objective in running their business. Other personal goals cited by small business owners include achieving early retirement (9 percent), security (9 percent), independence, freedom and flexibility (8 percent), making a living doing what they like (8 percent).

eBay and Small Businesses

Results from the survey show that small business owners are pointing to eBay as a powerful resource for increasing their bottom line. Among the small businesses that utilize eBay as a purchasing channel, 70 percent say that eBay has helped their businesses become more profitable.

The survey provides evidence that small business owners who use eBay have a more optimistic outlook and are more likely to hire new employees. The results reveal that 70 percent of small businesses that use eBay have a positive company outlook in 2004, compared to 58 percent for non-eBay small businesses. In addition, 36 percent of small businesses that use eBay anticipate adding full time employees, compared to 24 percent for non-eBay small businesses.

According to Glazier, "We estimate that there are over 430,000 small businesses and individuals making a living selling on eBay. Small businesses are finding out that buying and selling on eBay is one of the easiest and most cost-effective ways to start a business, expand geographically, reach new customers, or find sources of equipment and supplies."

Methodology

The survey was conducted via telephone amongst 400 U.S. based business owners and decision makers with less than 100 full time employees. There were two sampling components or cells in the study. The first was composed of a random sample of 200 businesses that fit the target criteria. The second was composed of a sample of 200 businesses that fit the target criteria and had used eBay for purchasing in the past 12 months. This sample was selected randomly and screened from a database provided by eBay of purchasers in their business and industrial category.

About eBay

eBay is The World's Online Marketplace(R). Founded in 1995, eBay created a powerful platform for the sale of goods and services by a passionate community of individuals and businesses. On any given day, there are millions of items across thousands of categories for sale on eBay. eBay enables trade on a local, national and international basis with customized sites in markets around the world. Through an array of services, such as its payment solution provider PayPal, eBay is enabling global e-commerce for an ever-growing online community.

About ACNielsen

ACNielsen, a VNU business, is the world's leading marketing information company. With 21,000 employees worldwide offering services in more than 100 countries, ACNielsen provides market research, information, analysis and insights to the consumer products and service industries. Clients rely on ACNielsen's market research, proprietary products, analytical tools and professional service to understand competitive performance, uncover new opportunities and to raise the profitability of their marketing and sales campaigns.