How The Adams-Onís Treaty Affected The Growth Of Our Nation :: American America History

How The Adams-Ons Treaty Affected The Growth Of Our NationAmericans were elicit in further expansion and looked to the weak Spanish provinces of East and West Florida. The Spanish were reluctant to give up what is now Florida, but in the goal they worked out an agreement c solelyed the Adams Onis Treaty. In this essay I will describe how the Americans eventually got these provinces, the set backs of the signing of the treaty, and how it effected the economic growth of our nation.Americans living in West Florida between the Iberville and Perdido Rivers declared their independence, and President Madison ordered the Governor of New Orleans Territory to take operate on of the independent land. The Americans now had control over half the territory they wanted but this did not satisfy them, this only made them more eager to gain control of East Florida. virtually two years after this event peace concluded, but Spain still had possession of East Florida. This time Spain only had two solu tions to avoid a ignominious political break down over this region. One was to gain support of a European ally, and the second was to get some form of honor in this event by winning some of the United States best land else where in North America. The first plan fell through, Britain and other European nations refused to back up Spain. They eventually fell to having discussions with the United States.The American government was entirely willing to have discussion of the East Florida issue become the end result of all Spanish-American boundary questions. John Quincy Adams was the Secretary of State and was the person taking care of all discussions between the U.S. and Spain. He saw that this was a perfect time to endeavour to extend the boundary to the Pacific Ocean. Luis de Ons was the minister of Spain at the time and he was the Spanish representative to the U.S. His instructions from the Spanish government was to steer the Floridas to the United States in return for the America n settlement west of the Mississippi. Onis was in any case to get a promise that the United States would not give material care to, or recognize the independence of Spains colonies in South America because of their lack of cooperation.Difficulties came up over negotiating a satisfactory boundary in the West and also over the command to put American military in East Florida in 1818.

The Fight That Will Never End Essay -- essays research papers fc

The Fight That Will Never EndAbstractIn this paper I will be exploring and explaining the act of abortion. I will talk about the historical and analytical background by explaining pre Row versus Wade, and post Row versus Wade. I will be explaining this issue on a National level, and address how womens role in society has changed dramatically since the famous trial run. IntroductionAbortion is the act of ending a pregnancy, either through surgery or by taking medication, with the intention not to have an infant born alive. Because many people believe that abortion should be legal under plastered circumstances, it has been a topic of great debate and controversy throughout the nation. The most historic case to ever argue the issue was Roe versus Wade the trial that legalized abortion in the United States of America. It was this very decision made by the Supreme hail that opened the door to the greater feminist movement, giving women much freedom and control of their bodies, in the workplace, and in their own households. In this paper, I will explain the famous case, the courts decision, and the impact it had, and still holds over society. Historical background knowledgeGeographically speaking, abortion is a huge issue not only in the United States of America, but also all over the world. It is vastly various however, because several countries allow abortion without it being a national issue. America has had many court cases and appeals to obtain the law it has today. I am explaining abortion internationally with a Maco level of analysis, giving a broad overview of varied countries policies. I have decided to tighten my focus, and explain abortion Nationally with a small level of analysis because abortion in America is an issue of huge controversy. It has been such an issue in the past, as well as now, that it took the Supreme tourist court to make a decision that everyone must abide by, without restricting women of their rights (Schoen 2000).Abortion in the United States is a subject of public debate. Opinion polls press out that most people think abortion should be legal. Thes... ... the matter, this fight will never end. Works Cited1.Carlton, Casey and Eileen S. Coleman. 2000. College Students Attitude Toward Abortion and Commitment to Abortion. The social Science ledger v.37(4) 619-25.2.Schoen, Johanna. 2000. Reconceiving Abortion Medical Practice,Womens Access, and Feminist Policies Before and After Roe v.Wade. Feminist Studies, summer 2000, pp 349-376.3.2000. The Enduring Battle Over Choice. New York Times, October11, 2000, pp. A34.4.2001. Free deliverance Can Be Ugly. San Francisco Chronicle, March30, 2001, pp. A24.5.Retrieved November 21, 2001 from the World Wide Webhttp//www.gargaro.com/abortion.html6.Retrieved November 29, 2001 from the World Wide Webhttp//www.prochoice.com/ The Fight That Will Never End Essay -- essays question papers fc The Fight That Will Never EndAbstractIn this paper I will b e exploring and explaining the act of abortion. I will handle the historical and analytical background by explaining pre Row versus Wade, and post Row versus Wade. I will be explaining this issue on a National level, and deal how womens role in society has changed dramatically since the famous trial. IntroductionAbortion is the act of ending a pregnancy, either through surgery or by taking medication, with the intention not to have an infant born alive. Because many people believe that abortion should be legal under certain(prenominal) circumstances, it has been a topic of great debate and controversy throughout the nation. The most historic case to ever argue the issue was Roe versus Wade the trial that legalized abortion in the United States of America. It was this very decision made by the Supreme Court that opened the door to the greater feminist movement, giving women more than freedom and control of their bodies, in the workplace, and in their own households. In this paper , I will explain the famous case, the courts decision, and the impact it had, and still holds over society. Historical primer coatGeographically speaking, abortion is a huge issue not only in the United States of America, but also all over the world. It is vastly different however, because several countries allow abortion without it being a national issue. America has had many court cases and appeals to obtain the law it has today. I am explaining abortion internationally with a Maco level of analysis, giving a broad overview of different countries policies. I have decided to tighten my focus, and explain abortion Nationally with a small level of analysis because abortion in America is an issue of huge controversy. It has been such an issue in the past, as well as now, that it took the Supreme Court to make a decision that everyone must abide by, without restricting women of their rights (Schoen 2000).Abortion in the United States is a subject of public debate. Opinion polls deno minate that most people think abortion should be legal. Thes... ... the matter, this fight will never end. Works Cited1.Carlton, Casey and Eileen S. Coleman. 2000. College Students Attitude Toward Abortion and Commitment to Abortion. The social Science diary v.37(4) 619-25.2.Schoen, Johanna. 2000. Reconceiving Abortion Medical Practice,Womens Access, and Feminist Policies Before and After Roe v.Wade. Feminist Studies, summer 2000, pp 349-376.3.2000. The Enduring Battle Over Choice. New York Times, October11, 2000, pp. A34.4.2001. Free wrangle Can Be Ugly. San Francisco Chronicle, March30, 2001, pp. A24.5.Retrieved November 21, 2001 from the World Wide Webhttp//www.gargaro.com/abortion.html6.Retrieved November 29, 2001 from the World Wide Webhttp//www.prochoice.com/

Dantes Divine Comedy - Eighth Circle of Hell in Canto XXVIII :: Divine Comedy Inferno Essays

8th Circle of Hell  in Canto XXVIII      Who, sluice with limitless words and many attempts at telling, ever could enjoin in full the blood and wounds that I straightway saw?  Dante begins the opening of Canto XXVIII with a rhetorical question. Virgil and he have scarcely arrived in the one-ninth Abyss of the Eighth Circle of hell. In this pouch the Sowers of Discord and Schism are continu wholey wounded by a demon with a sword. Dante poses a question to the reader Who, even with untrammeled words and many attempts at telling, ever could recount in full the blood and wounds that I now saw? (Lines 1-3) The rhetorical question draws the reader into the course because we know by this point in the godlike Comedy that Dante is a great poet. What is it that Dante sees before him on the brink of the Ninth Abyss that is so indefinable that he, as a poet, feels he cannot handle? In the following lines Dante expands on this rhetorical position. He elaborates o n why it is important for any man to introduce a good description of what he sees. No poet can achieve this description Each tongue that tried would certainly fall short... (L. 4) It is not just poetic talent that is at s enquire poets do not have the background to give them the poetic power for such description. His reasoning is the shallowness of twain our speech and intellect cannot contain so much. (Lines 5-6) one time again the reader is intrigued how could a man of Dantes stature criticize language which is the very tool he uses to create the epic work of La Commedia ? If we cannot take Dante seriously with these opening statements, we must pose the question of what Dante is trying to do by teasing us with this artificial beginning to Canto XVIII? Dante will now contradict himself and try to describe what he says is impossible. But, if he were to go right into a description of the Ninth Abyss, it would deflate his rhetorical position. Instead, Dante first sets up a quite le ngthy comparison of the sights he has just witnessed with examples of bloodshed throughout human history. Were you to reassemble all the men who once, within Apulia1s fateful land, had mourned their blood, shed at the Trojans hands, as well as those who fellDantes Divine Comedy - Eighth Circle of Hell in Canto XXVIII Divine Comedy Inferno Essays Eighth Circle of Hell  in Canto XXVIII      Who, even with untrammeled words and many attempts at telling, ever could recount in full the blood and wounds that I now saw?  Dante begins the opening of Canto XXVIII with a rhetorical question. Virgil and he have just arrived in the Ninth Abyss of the Eighth Circle of hell. In this pouch the Sowers of Discord and Schism are continually wounded by a demon with a sword. Dante poses a question to the reader Who, even with untrammeled words and many attempts at telling, ever could recount in full the blood and wounds that I now saw? (Lines 1-3) The rhetorical question dra ws the reader into the passage because we know by this point in the Divine Comedy that Dante is a great poet. What is it that Dante sees before him on the brink of the Ninth Abyss that is so ineffable that he, as a poet, feels he cannot handle? In the following lines Dante expands on this rhetorical position. He elaborates on why it is important for any man to offer a good description of what he sees. No poet can achieve this description Each tongue that tried would certainly fall short... (L. 4) It is not just poetic talent that is at stake poets do not have the background to give them the poetic power for such description. His reasoning is the shallowness of both our speech and intellect cannot contain so much. (Lines 5-6) Once again the reader is intrigued how could a man of Dantes stature criticize language which is the very tool he uses to create the epic work of La Commedia ? If we cannot take Dante seriously with these opening statements, we must pose the question of what Dan te is trying to do by teasing us with this artificial beginning to Canto XVIII? Dante will now contradict himself and try to describe what he says is impossible. But, if he were to go right into a description of the Ninth Abyss, it would deflate his rhetorical position. Instead, Dante first sets up a quite lengthy comparison of the sights he has just witnessed with examples of bloodshed throughout human history. Were you to reassemble all the men who once, within Apulia1s fateful land, had mourned their blood, shed at the Trojans hands, as well as those who fell

Terror and Protection :: essays research papers fc

Winston Churchill once said Never, never, never believe any war will be silent and easy, or that anyone who embarks on the strange voyage cornerstone measure the tides and hurricanes he will encounter. The statesman who yields to war fever moldiness realize that once the luff is given, he is no longer the master of policy but the slave of unforeseeable and uncontrollable events. at once some people believe that should America comely withdraw from all of its military engagements and then terrorism would just disappear. This however is not the answer. While numerous disagree on foreign policy I wish to discuss domestic protection. An internally strong nation will produce an equally strong outward nation. For this reason I believe many more safety precautions should be instituted to keep us safe not only in the public sector but in the private sector. Today numerous prospective radical targets include skyscrapers, airports and nuclear power plants. Each of these is susceptible in its own manner and as such each can be defended. With added security any potential damage must become no damage. The methods in which this can be done will be outline in the subsequent paragraphs.Presently the first and most problematic area in security are airports. Last sunday A Kentucky woman, carrying a pistol made it past security screeners and almost boarded a plane with the weapon. Airport police were alerted to the situation when the woman realized her mistake and reported it herself (Kuo). Mishaps such as this cannot be tolerated within airport safety. How do you miss a gun within a passengers carry-on luggage? This woman did it with ease by accident imagine what someone who had meaningly brought a weapon on to a plane could do. Airport security emplyees should be scrupulously certified with competency tests as well as identity verification. To keep another 9-11 from taking place FAA must rigorously curb access to planes, and other facilities in and around airports. The FAA must likewise meticulously perform more serious background checks. Every passengers name should be run in legal and terrorist databases to also prevent any disasters. Every flight, domestic or non domestic should have armed air marshals on it. Initially this was done following phratry 11th but was phased out due to the cost. If these simple precautions are employed flying will become much safer.Many believe that if a passenger has a through background check it will impede his rights to privacy.

Free Essays: The Weak Gods of Iliad, Odyssey and Epic of Gilgamesh :: comparison compare contrast essays

The Weak Gods of The Iliad, Odyssey and Gilgamesh The Oxford English Dictionary defines god as 1. A being conceived as the perfect, omnipotent, omniscient ruler and originator of the universe, the principal purpose of faith and worship in monotheist religions. 2. A being of supernatural powers, believed in and worshipped by a people. The first definition reflects Modern Americas connotation of the word god. The latter rec whollys the Ancient Greco-Sumerian ideal of a being greater than man. While both definitions are equally valid in literature, some(prenominal) perceive the word only in the first view. However, the Iliad, the Odyssey, and the Epic of Gilgamesh portray gods with limits and weaknesses. The contemporary Christian god is able to demand things of his followers, readily expecting wholehearted and inexplicit obedience. This was not the case with his ancient counterparts. Rather than exacting demands upon their followers, occasionally the ancient gods were lim ited to requests. Often they were refused. In the Odyssey, the goddesses Circe and Calypso both expected lifelong commitments from the flop Odysseus. Both promised great things to the hero, including godhood. Odysseus was able to refuse both goddesses. Human obstinacy beat out the whims of goddesses. If the Protestant god were to make sexual demands upon his followers, more than likely, he would not be refused. One could argue, though, that Odysseus did give in to the goddesses by bedding them. Always though, his focus eventually shifted to returning home and reuniting with his mortal wife. Homer depicted a man who refused immortal beauty for true love She is mortal after all, and you are immortal and ageless. But even so, what I want and all my days I pine for is to go back to my house and see my day of homecoming. And if some god batters me far out on the wide sober water, I will endure it, keeping a stubborn spirit within me, for I have already suffered much (93-94) . Thus, the mortal Odysseus was able to defy the temptations of the goddesses multiple times. In the Epic of Gilgamesh, another goddess whims are put down. Ishtar, goddess of war and love becomes attracted to the mighty but mortal Gilgamesh. But rather than jumping salutary into the sack with

Free Essays: The Weak Gods of Iliad, Odyssey and Epic of Gilgamesh :: comparison compare contrast essays

The Weak Gods of The Iliad, Odyssey and Gilgamesh The Oxford English Dictionary defines god as 1. A being conceived as the perfect, omnipotent, omniscient pattern and originator of the universe, the principal object of faith and worship in monotheist religions. 2. A being of supernatural powers, believed in and worshipped by a people. The first commentary reflects Modern Americas connotation of the word god. The latter recalls the Ancient Greco-Sumerian ideal of a being greater than man. While some(prenominal) definitions are as valid in literature, many perceive the word only in the first view. However, the Iliad, the Odyssey, and the Epic of Gilgamesh portray gods with limits and weaknesses. The contemporary Christian god is able to hire things of his followers, readily expecting wholehearted and unquestioning obedience. This was not the case with his ancient counterparts. Rather than exacting demands upon their followers, occasionally the ancient gods were limited to requests. Often they were refused. In the Odyssey, the goddesses Circe and Calypso both expected lifelong commitments from the mighty Odysseus. Both promised great things to the hero, including godhood. Odysseus was able to refuse both goddesses. Human obstinacy beat expose the whims of goddesses. If the Protestant god were to sort out sexual demands upon his followers, more than likely, he would not be refused. One could argue, though, that Odysseus did give in to the goddesses by bedding them. Always though, his focus change surfacetually shifted to returning lieu and reuniting with his mortal wife. Homer portrayed a man who refused immortal beauty for true love She is mortal after all, and you are immortal and ageless. notwithstanding even so, what I want and all my days I pine for is to go back to my house and see my day of homecoming. And if some god batters me far out on the wide blue water, I will endure it, keeping a stubborn spirit within me, for I have al ready suffered a great deal (93-94). Thus, the mortal Odysseus was able to deny the temptations of the goddesses multiple times. In the Epic of Gilgamesh, another goddess whims are put down. Ishtar, goddess of war and love becomes attracted to the mighty but mortal Gilgamesh. But rather than jumping right into the sack with

A Precise Thought on Hunger by Charles Dickens Essay

Great Expectations was published in 1861 when the flowering of the Victorian Age had been at its height. During this period England was disconcert by many problems emanating from the changes in feudal economy that fai direct to withstand the invasion of growing industries, explosion of population ,emergence of slums, unbridled exploitation and the simmering discontent. The theme involves an worried childhood, guilt and imprisonment, ruthlessness of law, the corrupting power of money, and above all, tender loneliness.These themes are worked out by means of contrasts and confrontations the instinctive sense of justice versus the legal arrangement the outcast versus society willed isolation against human commitment, inherited fortunes versus personal achievement. In one sense, it would be proper to call the novel a snobs progress towards self-realisation. On reading the great novel Great Expectations I felt too sympathetic & pity for a little boy called flog by Charles Dickens. He ,from his early childhood had to face and undergone through many circumstances and situations which as if made him stand strong later in his days.The opening rendering of the death of his brother and sister To five little stone lozenges,each about a foot and had never taken them out in this state of existence. Gave us a vivid picture of Dickens close observation on the most vital utterance of life that is food and death. One put up understand easily that it was Dickens extreme irritation that made him jot about the prior call of nature that was sufferings. According to Dickens food and human are correlated to eachother. Food/Hunger stands as an identity that makes us work severely so that the minimum bread of ours can be earned.It led us to the hard and harder aspects of life where while going through we come across the utter darkness that is the universal truth and reality of mankind. indeed again the just word hunger teaches us to explore new ideas & makes us discover things w hich are buried in the oldest urn lying beneath the populace. The preconceived dogmas of life calls hunger as an object that just gave pain & screwed the deeper realism of the worlds sob and wail. It was Dickens who enhanced and enliven us to commend on a word hunger that is perhaps the most alarming agenda of life.I think it was he who only touch us the point of utter grief that actually provided us with relief and became universal. Dickens projected the term hunger as the reality of humans and mental civilisation that generally produced an energy /stimulus to work for the betterment of oneself that equally helped the others. According to me hunger produced a juice that provided us with strengths and topped ourself. Yes it gave pain tho it also made us complete. One got an opportunity to move on and face things as it is. The portion where we came across the lines My thoughts strayed from that question as I looked disconsolately at the fire rose before me in the avenging coal s. Also taught us the truth and the pain that directly came out from the expression of a little boy who has just came to this world not too early. He added the word food into a column that showed us that for him food is a material that is too hard to earn. As he is just a little one and have not come across the harsh reality of life ,dont you think that he has unknowingly fallen into the so called cradle of ill desires.Was he not being drived into the bitter beliefs? His age was too little to be termed as a sufferer. Last but not the least I would like to conclude that very beautifully Dickens compared the two terms beget & Hunger together. As one(hunger) stands for an epistemology of knowledge ,desire,lust and longing and the other( suffer) stood for the ultimate thet can never be avoided nor ignored but has to be faced,as we the mere human beings are a framed puppet in the hands of them,The Almighty. Thank you.

Ford Motor Company: Supply Chain Strategy Essay

The Ford aim Company finds itself in a dynamic business environment where new technologies and practices spell the potential to alter in a signifi placet way the landscape in which it operates. Henry Ford was in his time an innovator in whirl cars for the masses. He introduced to the car industry methods and systems innovative in their day. Ford needs once again to forge new paths to ensure future belligerent advantage .Executives at Ford have been considering the Direct Model created by Dell Computer Corporation and finds that there is considerable appeal. Dell has been able to whet up inventory velocity such that there is only eleven days of inventory on hand. This has led to an inventory turnover rate of cardinal times per annum . This achievement, termed by Michael Dell Virtual integration has been achieved by blurring the line between supplier, Dell and client, to the extent that third party service staff are often thought, by clients, to be Dells own staff.In order to se e how congruent the Dell model is to Fords business we need to prove the similarities and differences between the two companies. This bequeath tout ensembleow us to gain some insight as to whether practical(prenominal) integration could work at Ford.Ford Motor CompanyDell Computer CorporationSimilarities*Cars are consumer items.*Computers are a consumer item.*Suppliers are often located close to manufacturing facilities.*Ford maintains close locational links with suppliers.*Number of suppliers is small.*Ford is working to build relationships with a limited number of strategic suppliers.*Fords customers range from large corporations, to government activity institutions, to the consumer.*Dells clients range from large corporations, to government institutions, to the consumer.Differences*Cars are personal in temper and many clients want to have close contact. A showroom is usually preferred.*Computers are generic in nature and do not need showrooms.*Safety and reliability are m ajor concerns.*Computers are not expected to be entirely reliable.*A car is do up of generic (tyres, petrol caps) and custom (dashboards, body panels) parts.*Computers are made almost entirely of generic parts.*Suppliers are often completely dep finisent on Ford*Suppliers are not entirely dependent upon Dell.*Ford is large and whitethorn have limited manoeuvrability.*Dell is flexible and can rapidly reply to market or supplier pressure.*Ford has a large monger network, both independent and company owned.*Dell has no retail network, all sales are Direct.*Ford has a vast range of products.*Dell has a limited range of products with a narrow palette of variations.Analysis and SuggestionsKey to Dells dodge is their policy of outsourcing all manufacture. Dellacts merely as the assembler and packager. The company is able to pick and choose from the range of industry leading components, allowing other manufacturers to make water the investments in leading edge technology. The suppliers manufacture their, essentially generic, products for many customers and therefore are economically independent of them and in like manner have little difficulty in meeting the JIT (just in time) requirements of Dell.Ford has at one time, both illustrious similarities and striking differences in terms of their relationship with suppliers. Many Ford components such as tyres, windscreen wipers, and electrical components are sourced from large suppliers who supply the same components to other companies. These products are well suited to a closer integration of supply virtual integration.On the other hand, a very large proportion of Ford components are custom made for Ford. Tier one suppliers of custom components such as body panels, seats and engine components are heavily dependent on Ford and other large carmakers. These suppliers second tier suppliers, who in turn also have suppliers. If virtual integration is to succeed with these components every company along the value chain ri ght back to the raw materials would need to be involved. This would be a very difficult and complex network to coordinate.Fords history is a factor to be considered, their longevity and size in the industry gives them a dread(a) degree of influence when compared with Dell, a relative newcomer to business and whilst a large buyer of components, not so influential on trends and technology. The disadvantage may be that this stature may make it hard to bring their very large organisation and supplier network along the road to virtual integration.The dealer network must be considered. The dealers carry a very limited range of products, which they hold in stock. If Ford decides to carry the Direct Model towards the end consumer they need to ask whether they need a dealer network and in what form. The possibility of disintermediation needs to be examined. Alternative forms, that use the existing network ay be viable, for example, the dealer might be used to postpone the final form until t he pointof customer order. This might be the fitting of audio equipment, air learn or interior trim customisation. This would modify more consumers to benefit from the vast possible range of options, as well as, at the same time diminution the factory lead-time for manufacture.RecommendationIf Ford is to successfully emulate Dell then they are best able to do this in areas where they have similarities. The most notable congruency is in the area of supply of generic components. Here Ford should continue its process of building strategic relationships.Where components are of a more specialised nature then Ford should examine the relationships to ascertain whether bringing suppliers closer to the company will offer benefits to both parties.Ford should work on its internal culture. Integration of supply chains on the scale practiced by Dell can only occur in an environment where information flows freely to all points of the supply network. As outlined in the case documents Ford maint ains a high degree of separation of the purchasing departments from marketing and production. Ford will not be able to provide focus up and downstream unless they themselves are committed to an open culture where logistics information is a part of the life business line of the company.The relationship with customers is more difficult. The dealer network will probably be averse to Ford moving towards direct sales, as it will threaten their livelihood. They can reap some of the benefits by introducing a web based ordering service for cars, allowing clients to specify the car that they want and then matching the requirement to the cars already in stock through out the network. If a client prefers they could order a vehicle built to order and supplied to a local dealer. This will enable Ford to become closer to the needs of clients, seeing accurately what they want rather than what they buy because it is available.This compromise will give the company some benefits* entropy about custo mer wishes.*Opportunity to reduce both dealer stocks and Fords stocks by avoiding duplication.*Delaying the final form of the product by increasing the range of dealer fitted items will enable Ford to simplify manufacture, whilst offering a greater degree of real customisation to clients.*Delay of final form will increase dealer revenues, get their enthusiasm and consent for the next stages of coordination.EpilogueSince this case was written, Ford has, in collaboration with General Motors and Daimler Chrysler established a joint venture, now called Covisint. It is envisioned as a global business-to-business supplier exchange. Its purpose is to share information with suppliersEach of the partners has combined their E-business initiatives in order that suppliers would be able to develop systems to deal with a single system rather than . The hoped for benefits are*Increased levels of collaboration*Lower addresss for all members of the supply chain*More efficient business practicesGM is now piloting a build to order system for its Brazilian Celta model. They are able to do this because they have the support of dealers who are sharing the cost savings with GMreferencesAustin, Robert D. 1999. Ford Motor Company Supply Chain Strategy. In Huff Wade Schneberger. New York McGraw-Hill.Joan Magretta. The Power of Virtual Integration An reference With Dell Computers Michael Dell. Harvard Business Review, March April 1998, pp. 73 84.Covisint web site, http//www.covisint.com/about/history Accessed November 2nd, 2002Ibid.US News.com web site, http//www.usnews.com/usnews/biztech/articles/020401/1industry.b1.htm Accessed November 2nd, 2002

Intro to Early Childhood Essay

Friedrich William Froebel (1782-1852) had a significant influence on early infanthood education as we know it today. He is known as the inventor of kindergarten, a German word meaning childrens garden. The model of the new day kindergarten was conceived by Froebel, who opened his own kindergarten in 1836, calling it a Play and Activity Institute. There he implmented such practices as promoting a childs right to play, to have toys, and to be in the c be of trained teachers.He believed that education should be pleasant for the child, because of his own unhappy childhood, instead of switching the role of the teacher from strict disciplinarian to friendly facilitator. Froebel also had the idea that men as well as women should teach, which was not heard of in those times. His strategy of teaching was centered around self activity and the development of a childs self- esteem rather than relying on sterile and rigid instructions. (Hewes 1993).Froebel observed the children and came to an understanding of how they learned and what they like to do. It was his belief that children learned much in the process of playing. (Ann Miles Gordon and Kathryn Williams Browne 21, 22) We can see the fruits of Froebel vision alive today in a variety of ways. For example, many early childhood programs are teacher-directed, with the focus being on planting ideas for the children to cultivate in their own time.Also, you may storm a teacher of the male persuasion in your childs classroom. Often, teachers in early childhood education are required to pursue nigh type of training and/or education relating to childcare, which was encouraged by Froebel. ( Ann Miles Gordon and Kathryn Williams Browne 21, 22) Froebels philosophy was that life was a school and the world was a classroom. He wanted the environment in which children learn to be full of discovery and adventure.He called the educational toys he created gifts, giving us insight into how he viewed erudition and the teaching of the young mind. There are children in kindergarten all over the world thanks to the dedication of Friedrich Wilhelm Froebel. His work is an accomplishment that reflects on the way children are taught and cared for today. (Ann Miles Browne and Kathryn Williams Browne 21,22) Works Cited Gordon, Ann Miles and Kathryn Williams Brown. Beginnings and Beyond-Foundations in Early Childhood Education. 8th ed. California. Wadsworth. 2011, 2008.

How does DNA play a role in inheritance Essay

How does DNA play a role in inheritance? You receive one-half of your DNA from your mother and one-half from your father move over an example of a dominant and recessive factortic disorder. People with light look tend to carry recessive alleles of the major genes people with dark eyes tend to carry dominant alleles. Give an example of an X- and Y- linked disorder.x(Hemophilia By(color blindness)How can genetics help to predict diseases? Doctors can give you a prognostic genetic test(PGT) to predict future problems. But let it be known that the test is not 100% certainty What role does a genetic direction play in helping families with known genetic diseases? A genetic counselor play a very big important role for the patient. They be able to present complex and difficult to understand information, to both the patient and there family. They also talk to them about testing, different options, genetic risks and counseling services. What disease(s) is gene therapy currently universe tested on? Hemophilia, Chronic Granulomatus Disorder(CGD), Cancer, Neurodegenerative Diseases and much more. Has gene therapy been approved in the United States? No.If gene therapy has been approved in the US, what is it being used to treat? If gene therapy has not been approved in the US, why not? Gene therapy is still in the investigative stage. The only way to sire gene therapy in the US is to go through clinical trials. What are some of the safety issues associated with gene therapy? it usually has to be delivered using a carrier, called a vector. The most common gene therapy vectors are viruses because they can recognize certain cells and carry genetic material into the cells genes. Researchers remove the original disease-causing genes from the viruses, replacing them with the genes needed to hinderance disease. Unwanted immune system reaction, Targeting the wrong cells, Infection caused by the virus, Possibility of causing a tumo Do you believe that gene therapy is ethical? Why or why not? Its hard to say. For someone who needs it(a sick person), I think its a possiblilty.

Worst Day Of Life

The worst day of my life was when I lost my cockle it was very painful I was emotionally scared and I cant play video games like public people. I lost my thumb when I was only a few years old and it hurt a lot. It got taken off in a bike chain. Thats how I lost my thumb.Im not able to play video games like normal people play. My thumb is always sliding off the buttons. It always hard to keep up when play video games with my friends. Its really annoying to play. Im not as accurate when playing games. I always die a lot in the games I play. besides I lose a lot when Im playing two player games. I cant move my thumb as fast as normal people. I end up in last often in games. I get problems holding things. That is what disadvantages I oblige when playing video games.When I lost my thumb it was very painful. My thumb was ripped off painfully in a bike chain. I think I should have sued the people that make the stupid bike. When it fell off it was just sitting there and that was bad. Wh en it got cut off it was gushing lots of blood. There was blood every where. When this happened the carpet was flush in blood it was weird. Then they took me to the hospital and they stitched it up because they couldnt put it back on because it was cut into small pieces. They had to but a cast on to. It was different when they took it off because I didnt have a thumb and that was different. Thats what were some painful things about my thumb being ripped off.It emotionally sacred me for life. I was neer the same. I couldnt hold a cup that easy. It made it hard to write. Ive always and forever be a freak. People call me a freak. Its really merry looking. Ill never be like the normal people. They laugh at my missing thumb. I cant always join into normal activities of normal people. Thats wherefore I sacred for life forever.Thats why the worst day of my life was when I lost my thumb. It was bad because that was my most painful experience I have ever had. It sacred me emotionally for ever. I can never be the same.

Allowing Students to Bring Mobile Phones to School Essay

In todays generation, wandering phones have been a necessity in everyone everyday lives. numerous teenagers today describe their mobile phones as their life. Technology nowadays increasely sophisticated makes all information is just at our fingertips. So, the question arose whether mobile phones should be allowed during condition sessions? What atomic number 18 the effects of it? Some people support this proposal because they felt that mobile phones send packing help students at the school. While rough others felt that it will increase social problems among students. As for my opinion, there ar two pros allowing students to start out mobile phones to the school, which is act as convenient communication slam and attainment aids, and one con which is increasing in deplorable cases.With the development of technology, each purpose of usage has its own pros and cons. There are some advantages of allowing students to add together mobile phones to school which is act as convenien t communication tool and learning aids. Firstly, as a communication tool, students can use mobile phones to halt in touch with their parents or friends while they are still at school. As a small tool, mobile phones are very convenient to the students to acquit it around the school in their pocket or bag. Moreover, students can use mobile phones as an emergency aid. As we know nowadays that there are lots of illegal activities such as bully and theft that has already plagued school. So, by allowing students to bring mobile phones to school, students can use it to contact authorities if they are in danger during school hour.Besides that, mobile phones can also be used as learning aids at school. As tell above, the technology of mobile phones nowadays is very advance and sophisticated. Thus, students can used this technology to aid them and look for information about knowledge in the winged ways. There are lots of functions or application such as calculator, maps, internet, diction aries, notes, and calendars that can assist students in their learning process at school. Thats wherefore Deputy Education Minister, Datuk Dr Wee Ka Siong said that in 2013, students will be allowed to bring mobile phones and IT gadgets to school after the rules and regulations under the Education Act 1996 areamended. It is suggested like that because the government has foreseen how mobile phone can aid students to gain more and faster knowledge during school hour.Read moreEssay on Heavy School BagsHowever, every development there is also con when bring a mobile phones to school, which is increasing in criminal cases. Some examples of criminal cases that occur in the school are theft, bullying and cheating. First of all is theft cases, there are good chances of phone theft when students bring an pricey and attractive mobile phones to school. In fact, Datin Noor Azimah (The Star Online, 2012) said When there is a theft, time would be spent and wasted while trying to look for the pe rpetrator and this would likely disrupt classes. So, it is best to leave them at home to prevent this problem from occur. As well as bullying, this is the form of cyber-bullying that has replaced the physical bullying and makes the school environment unsafe for many students.This is because, mobile phones nowadays have a built-in digital camera, and there is a distinct possibility that some students whitethorn take unflattering pictures, send incriminating videos, or utter threatening. Therefore, the use of mobile phones can be quickly turned into tools of corruption. Apart from it there is increasing in cheating cases. Mobile phones that can surf the Web and have application such as advance calculator or camera can facilitate cheating on tests, quizzes, in-class essays and other assignments. For example, an article titled Students Called on SMS Cheating proves that cheating is present inside the classroom, and allowing cell phones inside the classroom puts a teachers classroom mana gement at risk. As a result, it will give a lot of trouble to school.To conclude, we can see that allowing students to bring mobile phones to school will be beneficial to them. Even though, mobile phones can be used as a communication tool and learning aids, still the disadvantages such as increase in criminal cases will give more impact to students life and that cannot be overlooked. point of referenceBernama (2012, July 17). PTA No mobile phones to school, please The Star. Retrieved from http//thestar.com.my/ intelligence activity/story.asp?file=/2012/7/17/nation/20120717222415&sec=nationCulture Education. (2003, January 30). Students called on SMS cheating. Retrieved from http//www.wired.com/culture/education/news/2003/01/57484Loo T. E. (2012, July 16). Students can take handphones, IT gadgets to school from 2013. The Star. Retrieved from http//thestar.com.my/news/story.asp?file=/2012/7/17/nation/20120717222415&sec=nation

Operation AI and Machine Learning

Principle of surgery AI and railroad car acquire and how it could affect the earlyInvestigationI am very interested in Computer light and programming. That is why my goal for this project is to research about AI and instrument learning(neural ne dickensrks) and find out how it tush affect in the future and how is it affecting immediately.I have chosen this project because in the future i want to become a programmist and study this topic. My computer science and ICT classes provide me knowledge to do this project. thither i learn to code and program, which abide help me to understand the functions of AI.AI (Artificial In ensureigence) is recognition displayed by machines.It was fashiond to gain riddles that people burn down non solve. It is not discovered fully yet, solely it is one of the priorities of technology world nowadays.Today, AI(Machine learning nowadays) is utilize in a var. of spheres Virtual Personal Assistants, Predictions while Commuting, Email Spam and Malwargon Filtering, Online Customer go . The most famous and helpful specific examples are to see patterns in any spheres.Logical invention StepDescriptionQualityControl Date Start End1Research about AI.Effectively try and evaluate a wide go astray of source/ education in wrong of parley channel and purpose, recognizing set and limitations.Synthesizes development to make valid, well-supported arguments1 Dec, 2017 10 Jan, 20182Research how it change our life now.Effectively analyse and evaluate a wide range of source/ info in terms of origin and purpose, recognizing values and limitations.Synthesizes information to make valid, well-supported arguments1 Dec, 2017 10 Jan, 20183Research how other people(powerful) responded about AI.Effectively analyse and evaluate a wide range of source/data in terms of origin and purpose, recognizing values and limitations.Synthesizes information to make valid, well-supported arguments1 Dec, 2017 10 Jan, 20184What AI mint cause in the future.Effectively analyse and evaluate a wide range of source/data in terms of origin and purpose, recognizing values and limitations.Synthesizes information to make valid, well-supported arguments1 Dec, 2017 15 Jan, 20185During 1-4 steps release in the final report.Effectively analyse and evaluate a wide range of source/data in terms of origin and purpose, recognizing values and limitations.Synthesizes information to make valid, well-supported arguments1 Dec, 2017 15 Jan, 20186Analyse exclusively 1-5 steps and information in it and write conclusion.Thoroughly interpret a range of different perspectives and their implications.Synthesizes information to make valid, well-supported argumentsJan 15, 2018 Jan 25, 20187Correct all report and check grammar and information mistakes.Effectively analyse and evaluate a wide range of source/data in terms of origin and purpose, recognizing values and limitations.Thoroughly interpret a range of different perspectives and their implications. Synthesizes information to make valid, well-supported arguments Jan 25, 2018 Jan 30, 2018EssayAI or artificial intelligence is the simulation of human intelligence cognitive processes by machines, especially computer systems. Nowadays AI is almostthing that people wants to create, some of them spend their personal coin to reach this goal. The best example of this is Elon Musk, he is an awesome engineer, he has a lot of companies that create something new and essential, always make a real huge step in science.Today AI is a goal that all world wants to reach, precisely what they are creating and developing now is Machine Learning Systems. Now machine learning helps us a lot. All big corporations are trying to put it into more move of the telephoner. In the future, if someone creates AI, it pull up stakes take all jobs from the people, because AI is a person, but not in the human body.But before AI, Machine learning provide develop a lot, so it will take some jobs, but not all , actually jobs that should do something with the same operations or the hard process that needs a lot of energy.Amazon one of the biggest smart set that is trying to create AI. Amazon Machine Learning platform provides companies with the ability to predict and find patterns utilize data. Additionally, Amazon Echo brings artificial intelligence into the home through the intelligent voice server, Alexa. in any case, our favorite federation Apple is trying to create AI. Apple has acquired four artificial intelligence startups within the past two years, demonstrating its big step into the artificial intelligence sphere. Siri, Apples virtual assistant, has transformed over the years from being a fairly simple voice assistant to being a fully-fledged digital assistant. But still its not AI, its just Machine Learning system.About Elon Musk, he has 2 companies that have relationship with AI, first is OpenAI, this company is trying to create Artificial Intelligence. And the company that works with it is Neuralink, this company is creating software to merge people with it. Also creating a device for this.Nowadays all big corporations are trying to put as much Machine Learning as they can, they do it because it can help people a lot.This one takes place in everyday peoples life, its personal assistant, like Siri, Cortana, Alice, so they all are doing the same and the big advantage of employ Machine Learning is that people dont need to write each step that product should make because it learns by itself.If we take Siri as an example, we will see that in the first year Siri wasnt really confident with answers, with its voice, but it took some m for Siri to study from the peoples respond and we can see how Siri is answering our questions, it almost every time perfect, but it still learning, actually it could make intonation it a quiet good manner, but as I told it still learning.Also, Google is giving Machine Learning to anyone who need it, its picture search, it find the major parts of the picture and using it, trying to find the same one, but with the text and information about it. As well it analyzes what youre searching, so next time it could give you the best information that you need.So again we can see that Machine Learning system is learning by itself from us. And one of the most important for human race lives is Security. If youve flown on an airplane or attended a big public event lately, you almost sure as shooting had to wait in long earnest screening lines. But machine learning is proving that it can be an asset to help eliminate false alarms and spot things human screeners might miss in security screenings at airports, stadiums, concerts, and other venues.That can speed up the process significantly and ensure safer events. Also, security can be electronic money security. Machine learning is getting better and better at contracting potential cases of fraud across many different fields. Paypal, for example, is using machine learn ing to fight money laundering.The company has tools that compare millions of proceedings and can precisely distinguish between legitimate and fraudulent transactions between buyers and sellers. Also Data security for example company Kaspersky. Their learning model has no problem with the 210% variations and can predict which files are malware with great accuracy. In other situations, machine learning algorithms can look for patterns in how data in the cloud is accessed, and report anomalies that could predict security breaches.There are 2 opinions about future of AI, one of them is that its very dangerous and another one will help people. Here is one of them Autonomous weapons are artificial intelligence systems that are programmed to kill. In the turn over of the wrong person, these weapons could easily cause mass casualties.Moreover, an AI arms race could inadvertently lead to an AI war that also results in mass casualties. To avoid being thwarted by the enemy, these weapons wou ld be designed to be extremely difficult to simply turn off, so humans could plausibly lose promise of such(prenominal) a situation. This risk is one thats present even with narrow AI but grows as levels of AI intelligence and autonomy increase.Here is another one Artificial intelligence and the science of robotics can be put to use in mining and other fuel exploration processes. Not unaccompanied that, these complex machines can be used for exploring the ocean floor and hence overcome the human limitations.Due to the programming of the robots, they can perform more laborious and hard work with greater responsibility.Moreover, they do not hold up out easily. Machines, unlike humans, do not require frequent breaks and refreshments. They are programmed for long hours and can perpetually perform without getting bored or distracted or even tired.The principle of operations Machine Learning Systems is that it learns and analyze information by itself. But yet nobody can exact tell ope ration of AI because nobody created it, but a lot wants to.AI is a basic human, but not in the human body. So in my opinion people will need to create more rules and pressure and control levers to control AI. Machine learning is developing now and take really big steps to develop it and create AI. The big corporation is fully engaged in process of creating and using AI.AI could affect future in different ways, but still, nobody knows how it still all about teaching it properly like a child.Development of skillsWhen I started doing the project, I had critical thinking skills such as interpreting data, formulating factual and topical questions and revising understanding based on new information. by the project, I developed such critical thinking skills as evaluating evidence and arguments, drawing reasonable conclusions and generations from the information I was getting during by research in books, internet sources and knowledge that Ive got on the conferences.I also had communication and complaisant skills which are using appropriate forms of writing for different purposes, participating in digital social media networks and collaborating with peers and experts.I developed the communication skills such as giving and receiving meaningful feedback and using a variety of speaking techniques to communicate with variety of audiences while summarising the information and writing a final version of my essay.

Credit Card and Paypal

In this report, we focus on either aspects of the PayPal vexation. PayPal Basics PayPal is quickly establishing itself as a spheric earnings processor with scale, facilitating approximately $60B in Total salary Volume in 2008. It trunk the largest player foc officed solely on online remunerations however when compared to the heart and soul volume of large global players, such as Visa and MasterCard, PayPals volume remains fairly sm still its $60B TPV was meet all everywhere 1% of the follow volume of commitments processed last year by Visa and MasterCard combined. manikin 1 PayPals Volume Dwarfed by Incumbents in billions 2,000 1, cholecalciferol 1,757 1,548 969 1,000 500 0 Visa ( consultation) Visa (Debit) MasterCard (Credit) character lodge reports, J. P. Morgan estimates. Note Parts of PayPal volume whitethorn be processed using Visa or MasterCards net profit Visa volume excludes Visa europium 406 60 MasterCard (Debit) Pay Pal PayPal is an Established remuner ation Ne cardinalrk and Brand A Rare Commodity PayPal is in rare company, successfully creating itself into a formidable payment network and brand alongside dominant payment brands in Visa, MasterCard, the Statesn Express and Disc over.Payment networks mount at the top of the value chain in payments, collecting high- border fees for facilitating payments from participants seeking access to a network of trusted merchandisers and consumers. PayPal overcame the classic chicken-and-egg dilemma and now has a critical mass of substance abusers in its network, differentiated as a trusted brand for facilitating online payments with the potential to extend its presence into offline opport social unities longer-term.One driver of PayPals exploitation is that, unlike traditional payment methods which developed in an offline world and boast been overlaid onto eCommerce, PayPals platform was built with eCommerce in mind. As such, PayPal has developed tools and risk management measures to orchestrate the unique complexities of handling post-horse not exhibit payments over the net one of the fastest ripening categories in payments. Moreover, PayPal is elegantly structured to simplify the web of connections requ vexationd in a traditional payment system, making it well positioned to penetrate the wee assembly line payments food market. Imran khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com northwesterly the States right liveliness for 26 June 2009 Figure 2 PayPal Simplifies the Payment passage Traditional payment structure merchandiser Payment gate look supplier Merchant depose man-made lake J. P. Morgan. PayPal payment structure Merchant Consumer Consumer Card issuer processor Card-issuing bank Merchant bank Consumer bank We conceptualize the online marketplace, and marketers in particular, benefit from this simplification in some(prenominal)(prenominal) ways Ease of Use.PayPa l gives connoisseurshipally anyone the capacity to select payments, enabling a merchandiser to operate stock-still at an initial scale that would otherwise be uneconomical (i. e. , at that place are no minimum requirements for payment volume in order to use PayPal. ) Higher level of trust. The payments system is not very transparent, and not all aspects were intended for mass use. A trusted central clearinghouse like PayPal tin encourage use of online payments by lowering users safety concerns and face lift their volitioningness to send money online. PayPal Is Differentiated beyond Just Online Commerce PayPal is different from other payment brands (e. g. MasterCard, Visa) in that it is a vertically merged payment provider. In other words, PayPal is a single source provider of payment services. By contracting directly with PayPal Merchant function, small merchants bathroom get all of their payment needs, and do not necessarily need a separate merchant bank account or paymen t gateway services provider. PayPal is gradually expatiateing its presence off eBay by promoting itself as an integrated payment endure along side other payment brands (e. . MasterCard, Visa), supported by PayPals own merchant services plying and alliances with payment vendors like CyberSource (payment gateway) and pass over Paymentech (largest merchant acquirer in the U. S. ). PayPals crossway Offerings for Online Sellers PayPal offers several different products for payment driveance, based on the size and needs of the merchant Email product. This is the offering used largely by little eBay merchants, who receive payments entirely via e-mail, with no situation of their own on which they need to integrate PayPal. Website Payments Standard.This product seizes merchants to place a PayPal only whenton on their site, and when a user is render to check out, the user pullulates the button and is taken to the PayPal site where the actual checkout occurs. 4 Imran caravanse rai (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com normality the States Equity search 26 June 2009 Website Payments Pro. With an incremental $30 periodical fee, the Pro product is break away integrated into a sellers site. The product is intended for small- to medium-size sellers, and requires the seller to be using a compatible hopping cart vendor (most are compatible). Express checkout condemnation. Intended for larger merchants (those already accepting admit Dell and Barnes & Noble). Express Checkout is incremental to the payment acceptance service used by a vendor it gives users an sum totalal checkout option. When a shopper uses Express Checkout, s/he logs into PayPal, and PayPal then forwards address and other info to the merchant. This allows an existing PayPal user to bypass entering personal and shipping information again, even if it is the users first time using the specific merchant. Strong cau seth in dynamic UsersBy continuing to add users crosswise multiple platforms, PayPal has been able to post strong user vexth in recent drags, even despite the slowdown in on-eBay growth and low-single-digit user growth on the eBay site itself Figure 3 PayPal Active User emergence Strong in Recent Quarters Users in Millions 150 100 50 26. 7% 23. 7% 20. 7% 19. 6% 18. 6% 19. 2% 17. 7% 16. 3% 16. 1% 16. 0% 17. 3% 22. 9% 21. 4% 30% 20% 10% 73 70 65 63 60 57 53 55 51 47 49 45 44 0 0% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Pay Pal Activ e Accounts Y/Y Grow th Source social club reports, J.P. Morgan Payment Business Basics For a primer on the payments industry, transport see Payment Processing Payments Market Share Handbook published on June 5, 2009 by J. P. Morgans calculating machine Services & IT Consulting analyst, Tien-tsin Huang When a buyer hands cash to a seller, the execution is self-contained. If a faith (or calculate) bug is involved, howeve r, several other parties become involved in the transaction, which we describe below Issuer (Cardholders Bank). Card proceeding start with a card issued by an issuing bank (e. g. Bank of the States, Chase, etc. ) to a consumer.In harm of economics, the bank that issued the consumers credit card takes the purchase price, collects its tack together fee (in the US, 170 -225 bps depending on the type of card), and passes the remainder to the Acquirer (Commonly the Merchants Bank). The acquirer provides merchant services to the merchant, handling all the card and/or electronic payment acceptance needs of the merchant. The merchants acquiring bank 5 Imran caravansary (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com trades union America Equity enquiry 26 June 2009 ccepts the payment, collects a merchant give notice (generally in the 30-50 bps prescribe in the US), and forwards the balance to the seller/merchant. Both t he Issuer and the Acquirer pay a small (7-9 bps each) fee to the Payment Network (see next entry). Merchant acquirer functions allow in Sign up merchants to enable them to accept card payments. Enable merchants to authorize card payments via the network. Pay all network and associated fees for a merchants proceedings Facilitate clearing and settlement of card payments nominate incremental services, e. g. , sending out statements, etc. Payment network (e. g.Visa, MasterCard). As the backbone to the payments industry, networks connect versatile banks that need to process credit card payments with merchants and provide authorization, clearing and settlement services. Networks also set rules and interchange pass judgment (earned by the issuing bank). Payment gateway. In the offline world, the payment gateway is the equivalent of a point-of-sale terminal that accepts the payment type (e. g. credit, debit entry card) and translates it into a format that wad be accepted by the merchant acquirer. In the online world, the gateway generally connects an eCommerce site with the merchant acquirer.PayPal already functions as a Payment Gateway, largely as a result of its acquisition of VeriSigns payment business, which had 144,000 customers when acquired in 4Q05. 6 Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 Figure 4 Example of a Credit Card Payment Processing Cycle Source J. P. Morgan. How Does PayPal fit in? In most cases, when a PayPal user pays with a credit or debit card, PayPal functions as the Merchant (in Fig. 4).PayPal relies upon its merchant acquirer (usually rise up Fargo) to facilitate the transaction. PayPal the charges the merchant its fees, which on average represent a spread over what the acquirer charges PayPal. In addition, if merchants want, PayPal offers certain merchant acquiring services such as the means to authori ze valid card proceeding and facilitating the clearing and settlement of the transaction done and through the payment network. At this point, we estimate that PayPals merchant acquiring business comprises less than 5% of PayPals TPV. 7 Imran Khan (1-212) 622-6693 imran. t. emailprotected om Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 PayPal Revenue Model Transactional Revenue PayPals business model involves collecting a percentage of revenue from each payment made on the system this percentage has remained in the 3. 75%-4. 0% range since F05. In F08, PayPal collected 3. 86% of TPV as revenue. The following fudge summarizes the contributors to take rate evade 1 Contributors to PayPals Transactional Revenue Take Rate Type Cross-border transactions (CBT) US sellers, non-CBT Intl sellers, non-CBT Payment Gateway Website Payments Pro Source J.P. Morgan estimates % of revenue 35% 33% 25% 3-5% 2-5% footnote PayPal charg es up to 100 bps high rates for CB transactions charges an additional 250 bps for currency spiritual rebirth Sliding scale from 1. 9% based on volume Country-specific pricing generally higher rates than US Acquired from Verisign in 4Q05 limited growth since periodical $30 fee for WPP product Figure 5 Our Estimates of Contributors to PayPals Transactional Revenue Intl rev enue Pay ment Gatew ay Website Pay ments Pro Monthly Fees Cross-border rev enue US rev enue Source J. P. Morgan estimates trade Services and otherwise Revenue Several items are counted as a part of Marketing Services and Other revenue. These include Interest earned on some customer balances. PayPal earns revenue as it receives engross on the balances of some non-US account holders. Note that US customer balances are held in FDIC-insured accounts or in a money market account PayPal does not receive interest on these accounts. BillMeLater interest and fees. Interest and fees earned on existing BML knob balances are classified as Marketing Services and Other revenue. Comparing PayPal Fees to Online CompetitorsPayPals fee structure is standardized to those of its online-only competitors both Google Checkout and Checkout by amazon offer a similar package of fees depending on a merchants monthly gross sales volume Amazon differs in charging a exquisitely different fee level for transactions under $10 as well as minimal cross-border support both buyer and seller must have a US-based financial instrument to use the service. Both Google 8 Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 nd PayPal charge roughly (in Googles case, exactly) 1% to a salienter extent for cross-border transactions. See add-in 2 for a summary. As a point of reference, we study offline fees for accepting tease (aka merchant discount rate) average around 1. 9-2. 0% in the U. S. In action of 2009 , Google announced that it would no longer offer a discount on payment process on Google Checkout for Google AdWords advertisers. put off 2 Fees for PayPal, Google, Amazon Remain Similar Transaction Type/Volume Transactions under $10 Up to $3,000 / month Between $3K-$10K Between $10K-$100K $100K and above Cross-border PayPal Same as below 2. % of transaction + 30 cents 2. 5% of transaction + 30 cents 2. 2% of transaction + 30 cents 1. 9% of transaction + 30 cents Varies by currency but 1% extra payments with currency conversion add 2. 5% charge Google Checkout Same as below 2. 9% of transaction + 30 cents 2. 5% of transaction + 30 cents 2. 2% of transaction + 30 cents 1. 9% of transaction + 30 cents 1% of transaction Checkout by Amazon 5. 0% of transaction + 5 cents 2. 9% of transaction + 30 cents 2. 5% of transaction + 30 cents 2. 2% of transaction + 30 cents 1. 9% of transaction + 30 cents US only (seller and buyer must have US-based account)Source conjunction websites PayPals T ransaction salutes Set against the 3. 9% revenue take rate, the business faces two key expense lines that drive its transactional margins transaction processing represent and fraud losses Figure 6 F08 Revenue and Expense get hold ofrs for Aggregate PayPal Payment Volume % of Total Payment Volume, Aggregated across all TPV and Funding Methods 4% 3% 2% 1% 0% 100% of PP rev enue 30. 9% of rev enue 1. 19% 7. 4% of rev enue 0. 28% 61. 8% of rev enue 3. 86% 2. 67% 2. 38% 2. 38% Rev enue Take Rate Processing Ex pense Transaction Losses = Transaction ProfitSource Company reports, J. P. Morgan estimates Processing expense is driven by funding change integrity PayPals positiveness is driven in large part by the undulate of sources from which customers draw coin in order to pay on PayPal. In particular, when customers pay using a credit card, PayPal incurs a world-shatteringly higher cost of finances than when customers fund a purchase using their PayPal balance or an ACH transfer. 9 Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009Specifically, PayPal, similar to any merchant that accepts credit separate, is charged a soma of fees (the largest of these is interchange, which is the fee charged by the cardholders bank). For PayPal, we confide these fees amount to 220-250 bps of payments funded with a credit card, with the range representing different types of cards and different geographies (interchange fees are generally higher in the US than across part of the world, including Europe and Australia). Fees are slightly lower, but still in the 150200 bps range, if users shoot a debit card rather than a credit card.By comparison, a payment funded from money already in a users PayPal account carries virtually no cost to PayPal. A payment funded though ACH carries a flat processing fee, usually less than 25c this represents less than 40 bps on a n average PayPal transaction of $62. Figure 7 PayPals Funding desegregate Merchant PayPal collects take rate (1. 9% to as oft as 5%), based on merchant volume and location (signifi screwtly higher if currencies converted) PayPal If funded via If funded from users PayPal balance, cost to PayPal is negligible Credit card, cost to PayPal is 220-250 bps PayPal then functions as Merchant in Fig. above. If funded via If funded via ACH, cost to PayPal is $0. 10-$0. 25 Debit card, cost to PayPal is 150-200 bps PayPals cost of funds becomes more prospering Source J. P. Morgan 10 Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 Drivers of Funding Mix PayPal allows users to pay with both a credit/debit card and ACH however, PayPal defaults to using an existing balance or ACH, and users must actively select to pay via a credit/debit card every time they use the service.The c ompany has say that customers generally shift toward a more favorable funding intermixture over time. Additionally, as PayPal adds new merchant sites, users of those sites begin with a heavier mix of credit card use. The mix for a merchant site begins to resemble that for PayPal overall as users familiarity with PayPal grows generally, 12-18 months. Additionally, we cerebrate BillMeLater, which is funded entirely through checks and ACH, can help improve funding mix for PayPal down the road. Other Margin Drivers PayPal margins have historically been in the 20% range, excluding corporate expenses.We believe several factors drive the variance mingled with the 60%+ transaction margins and the high-teens overall profitability. Primary among these are Customer service costs. Call centers as well as a word form of employees needed to manage any problems that arise in the payments process. We do not expect these expenses to show important economies of scale as the business continues to grow. Sales and Marketing. As PayPal has invested in growing its Merchant Services business, we believe that segments growth has been fueled by higher Sales conk. When the business matures, we believe there should be some scale economies in Sales. BillMeLater Basics PayPal acquired BillMeLater in 4Q08. The service allows users to request transactional credit, rather than a revolving credit line as is the case with a credit card. BML offers consumers rapid credit decisioning on the infrastructure of less detailed information (date of birth and last four digits of a Social Security Number) than requirement for more traditional financing. The legal age of BMLs revenue is derived from consumer interest payments and fees, as shown below 11 Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 Figure 8 BillMeLater Economics as of clip of Acquisition % of TPV 12% 10% 8 % 6% 4% 2% 0% 2. 4% Merchant Fees + 6. 5% 3. 6% 2. 9% 3. 4% 2. 1% 4. 1% Cust. Interest Cust. Fees Acquisition Income + Credit follow of Funds = Transaction Profit Serv icing Fraud Loss Source Company presentation, J. P. Morgan estimates Note Cost of funds includes an implied cost of financing consumer receivables transaction expense for processing funds is minimal due to funds being sourced primarily via ACHAt this point, BillMeLaters presence on the eBay site itself remains minimal the company has lay a 3Q09 target for better integration of the business with PayPal, and we believe that, afterwards fuller integration, eBay may choose to drive higher BML brainstorm on the Marketplaces business through, e. g. , promotional or interest-free financing. Complete integration of BML into all aspects of the PayPal solution is expected in 1Q10. Charge-offs BillMeLater reports its net charge-offs as a percentage of the average receivables balance over the course of the quarter in Q10 9 net charge-offs rose to 8. 95%, compared to 8. 5% during the part of the fourth quarter after the acquisition. receivable to the transactional nature of the business, we believe BML has the capacity to continue keeping loan losses at a reasonable level additionally, the company has expressed that it plans to focus on being more fusty with offers of credit in the near term, even at the expense of TPV growth. Nevertheless, we expect charge-offs to continue rising somewhat. Historically, credit card charge-offs have been correlated with the unemployment rate, as seen below. 12 Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 Figure 9 Historically, Credit Card Charge-offs Rise when Unemployment Rises 10% 8% 6% 4% 2% 0% Q195 Q196 Q197 Q198 Q199 Q100 Q101 Q102 Q103 Q104 Q105 Q106 Q107 Q108 Q109 Unemploy ment Rate Source Federal Reserve, J. P. Morgan Credit Card Net Ch arge-off Ratio piece we believe charge-offs at BML can be managed better, due to the transactional nature of BMLs exposure, we reckon rising unemployment is unconvincing to leave the business untouched. Thus, if unemployment keeps going up, we would expect continued upward drift in charge-offs.PayPals Growth Strategy PayPals original growth engine was the marriage between PayPal and eBay, and the ability to drive higher penetration on the eBay site. We believe the low-hanging fruit in this regard has largely been gathered, but room for growth still exists along several areas of opportunity. 1. Growth Opportunities for PayPal on eBay Continued Geographic Expansion Can Drive Growth One of the biggest factors driving higher PayPal penetration on eBay has been geographic expansion in territories where the business is less mature than in the US.PayPal has had roughly five years of operating history in more than of Continental Europe, compared to nearly a decade in the United States. Table 3 PayPal Penetration as % of Addressable TPV continues to Grow % of addressable TPV Country US Canada United Kingdom Australia France Spain Italy Germany 2004 64% 60% 49% 7% 8% 5% 7% 2% 2008 80% 79% 74% 47% 43% 37% 36% 15% 2011(E) 84% 82% 81% 72% 61% 57% 56% 39% Comment Could see addl boost from BML Penetration already nearly 60% see below In terms of online act, much of continental Europe is following in the footsteps of the UK, but several years behind.Penetration nearly doubled in F08 alone Source eBay Presentation, J. P. Morgan estimates We believe the 2008 take in in Australia, where PayPal penetration went from under 40% to nearly 60% over the course of a year, is broody of eBays capacity to grow penetration via rule changes the company rolled out rules mandating most sellers to offer PayPal as an option in 2008, and penetration grew by more than half over the course of the year. 13 Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009Figure 10 Australia Demonstrates PayPals Capacity to rapidly Boost Penetration 60% 50% 40% 30% Q108 Q208 Q308 Q408 Source Company presentation, J. P. Morgan estimates Additionally, several continental European countries have seen growth roughly in parallel since the rollout of PayPal in much of continental Europe in summer 2004. We See Limited Opportunity for Domestic on-eBay Growth Having already achieved notable levels of penetration on established sites, we dont think PayPal will see significant additional pluss in on-eBay penetration from current levels, especially in the US.However, as eBay increases the amount of buyer protections and begins to offer credit through BML, we think the percentage of GMV that is addressable by PayPal can rise. Figure 11 PayPal volume as a % of Addressable GMV, 2008 GMV in $B 30 20 $29B $24B 10 0 79% 41% US Source Company reports, J. P. Morgan Pay Pal Non-Pay Pal In ternational One additional way to increase penetration on the site is for the company to offer increased incentives for sellers and buyers to choose PayPal as the payment method.These incentives can take the form of carrots (coupons, higher levels of protection) or sticks (e. g. , rules making other forms of payment more difficult to accept). PayPal has continually increased buyer protections on eBay for uses who pay with PayPal, with the levels rising from $1,000 to $2,000 in January 2007 and going up again to offer unlimited coverage in June 2008. We think offering higher levels of buyer protection but only when paying with PayPal remains a useful lever for increasing the penetration of PayPal on the eBay site. 14Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 PayPal on eBay Challenges Weak Marketplaces Growth Will Negatively move TPV Growth In line with recen t declines in GMV, the percentage of PayPals TPV that is driven by on-eBay activity has been steadily declining in recent quarters, with 3Q08 having represented the first quarter in PayPals history that saw a majority of TPV come from the Merchant Services part of the Payments business.Figure 12 On-eBay TPV Continues to Decline as a dower of Total 70% 60% 50% 40% 30% 20% 10% 0% 62% 58% 56% 56% 54% 51% 49% 49% 46% Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Percentage of TPV deriv ed on eBay Source Company reports, J. P. Morgan estimates As eBay has struggled to improve GMV growth and faced headwinds from FX, the on-eBay portion of TPV has seen nominal phrase growth turn negative in recent quarters, as shown in the chart below set for FX the last two quarters have seen on-eBay TPV grow 5% and 3%, respectively.Figure 13 On-eBay TPV Growth Continues to shut away Off-eBay TPV Y/Y change 80% 60% 40% 20% 0% -20% 1Q07 50% 19% 57% 62% 66% 61% 57% 49% 35% 26% -7% 18% 18% 17% 17% 19% 12 % -3% 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 On-eBay TPV, Y/Y Source Company reports, J. P. Morgan estimates Off-eBay TPV, Y/Y We are currently modeling GMV to shrink by 14% in F09, returning to slight growth in F10 with a 1% rise. Even when looking only at non-Vehicles GMV, our model calls for an 11% decline this year, followed by a 1% growth in the next year.While we think eBay has taken many correct steps in improving the agonisticalness of its Marketplaces segment, we remain concerned that the competitive environment 15 Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 will make it difficult for eBay to reaccelerate growth and reclaim market carry on in future years. Additionally, we believe the shift to a frictionless eCommerce model is driving buyers to choose fixed-price formats over an auction approach.As this has the effect of moving from a home eBay con trols into a much more competitive, multi-channel environment, we think it creates an additional headwind to growth. Cultural Headwinds in Some Geographies In addition to the above, two specific geographic regions have presented challenges for growing PayPal penetration In Germany (and Austria, combined, estimated at 15% of GMV), the majority of online payments are made using bank transfers, and PayPal has had limited success displacing this system. However, as Table 3 (above) indicates, PayPals penetration in Germany has been rising.In Korea (we estimate 5% of GMV), where eBay recently announced plans to acquire GMarket and combine it with its current auction. co. kr site, the predominant mode of payments is using escrow accounts. As in Germany, we believe penetration can rise over time as users become more comfortable with PayPal. Given the challenges in these two areas, which comprise approximately one fifth of eBays GMV, we believe it could be difficult for eBay to go signific antly past the 70% penetration threshold in the next five years. Bottom Line We see $36B in F11 on-eBay TPVBased on our current model of F10 GMV (excluding Vehicles) of $43B, and an assumption of accelerating GMV growth to 10% Y/Y in F11, we think PayPals oneBay TPV could hit $36B in F11 (implying a 6% 3-year CAGR), with a range of $33B-$40B depending on more or less favorable assumptions. Figure 14 On current trends, on-eBay portion of PayPal would contribute $36B in F11 TPV On-eBay TPV, $ in billions 40 35 30 25 2008 2009E Optimistic Current Model 2010E Pessimistic 2011E Source Company reports, J. P. Morgan estimates 16 Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 2. Growth Opportunities for PayPal off eBay PayPals growth through increasing penetration of off-eBay online commerce has been a key component of the businesss growth in recent years. We think the co mpany retains significant runway to add customers. Historically, Focus on Smaller Sellers Due to its roots as a solution for payments on the eBay platform, PayPal has generally seen a higher penetration among little and mid-size sellers.This is partly due to the fact that PayPal has no fixed costs to a merchant, whereas accepting credit cards carries fixed costs. For a seller generating $100K in annual revenue, a $60$70/month cost for accepting credit cards amounts to nearly 1% of sales. Table 4 Economics of PayPal compelling for SMB market PayPal Setup fees Monthly Service Fee Monthly Gateway Fee Transaction fee Monthly Minimums $0 $0 $0 1. 9%-2. 9% + $0. 30 None Merchant Processor $0-$ccc $20-$50 $10-$30 2. 0%-3. 0% + $0. 10-$0. 50/transaction $0-$30Source Company reports, processor websites and J. P. Morgan estimates Figure 15 Payment Solutions P a y m e nt s o lu tion s D is a d va n ta ge s re la tiv e to P ay P al Buyer S eller C an n ot b e tra cked L im ite d p rote cti on ag a in st lo ss/th eft R estricte d to virtu a l w orld L im ite d p ro te ction a g a in st lo ss/th eft R e stricte d to virtu a l w orld S lo w se ttle m en t/fu lfillm e n t tim e C ost/tim e of w ritin g che cks S lo w se ttle m en t tim e F ra ud riskC red it C ard Joh n Q Pu b lic 5012 345 6 7890 1234 S ecu rity unce rta in ty of sm a ll b usin e ss site C re d it lim its In te re st co sts H ig h tra n sa ctio n fee s p ro hib itive fo r sm a ll m erch a n ts R e qu ire s m e rcha n t b ank a ccoun t F ra ud risk (card no t p rese n t) P ro ce ssin g tim e /co st S e tup co sts W ire (e . g. , W e ste rn U n io n ) F ee s U su a lly re qu ire s p h ysica l visit to ve n do r L im ite d a cce p ta n ce Source J. P. MorganPenetration among Large Businesses Small, but Growing Whereas smaller sellers were PayPals bread-and-butter in the early days, the greater part of online commerce now occurs at larger sellers. This is especially legitimate when one incl udes online travel, a category PayPal has pursued aggressively whereas eCommerce has a fairly long tail of sites, the great majority of online travel is transacted at the large providers and OTAs. 17 Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009Table 5 Penetration at top 50 online merchants, by geography As of March 2009 Country USA UK Germany France Australia Penetration 42% 28% 16% 36% 60% Source Company presentation and J. P. Morgan estimates Internet Retailer Data PayPals Penetration Higher with Smaller Merchants Based on data from Internet Retailer, we estimate that 26% of the total sales volume on the top 50 online retailers in F08 came on sites that accept PayPal. Consistent with PayPals past focus on smaller sellers, PayPal penetration among sites outside the top 50 is 39%, nearly 1. x the penetration among the top 50. Figure 16 Smaller Merchants More Lik ely to Accept PayPal % of internet retailers accepting PayPal, weighted by 2008 online sales Internet Retailer Top 50 I. R. Top 50, ex cluding Amazon Rest of I. R. Top 500 (51-500) 0% Source Internet Retailer, J. P. Morgan estimates 26% 33% 39% 10% 20% 30% 40% Note Internet Retailer does not include travel sites in its rankings The following table summarizes PayPals presence (including previously existing BillMeLater relationships) on the top 50 retail sites as ranked by Internet Retailer. 8 Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 Table 6 26% of Revenue at top 50 US eCommerce Sites is Addressable by PayPal 2008 Sales in $ millions Site Amazon. com Inc. Staples Inc. Dell Inc. Office Depot Inc. Apple Inc. OfficeMax Inc. Sears Holdings Corp. CDW Corp. smartegg Inc. Best Buy Co. QVC Inc. SonyStyle. com Walmart. com Costco Wholesale Corp. J. C. Penney Co. Inc. HP floor & Home Office inclose Circuit City Stores Inc.Netflix Inc. Victorias Secret Target Corp. Systemax Inc. L. L. Bean Inc. Macys Inc. Williams-Sonoma Inc. spreadhead Inc. Direct HSN Inc. Zappos. com Inc. Amway orbiculate Overstock. com Inc. Avon Products Inc. 1-800-Flowers. com Inc. Nordstrom Inc. Buy. com Inc. Redcats USA The Neiman Marcus Group Inc. Musicians Friend Inc. Blockbuster Inc. PC Connection Inc. Toys R Us Inc. Cabelas Inc. BarnesandNoble. com Inc. bookworm Inc. The Home Depot Inc. VistaPrint Ltd. Saks Direct Nutrisystem Inc. Peapod LLC drugstore. com Inc. Nike Inc. Kohls Corp.Verticals nonuple Office Supplies Computers Office Supplies Computers, Digital Sales Office Supplies incision Store Computers Computers Electronics Multiple Electronics Multiple Multiple Department Store Electronics Electronics Video Rental Apparel Multiple Electronics Apparel Department Store Home Apparel Multiple Apparel Multiple Multiple wellness & Beauty Flowers Apparel Multiple Mult iple Department Store Musical Equipment Video Rental Computers Toys debauched Goods Media Media Home Office Supplies Department Store Food Groceries Health & Beauty Apparel Department Store 2008 Online Sales $19,170 $7,700 $4,830 $4,800 $3,642 $3,084 $2,693 $2,600 $2,100 $2,015 $1,993 $1,828 $1,740 $1,700 $1,500 $1,497 $1,414 $1,365 $1,333 $1,209 $1,072 $1,044 $1,040 $1,033 $1,030 $1,016 $1,014 $904 $834 $754 $750 $686 $657 $617 $565 $531 $526 $516 $500 $497 $466 $455 $437 $401 $381 $376 $373 $367 $366 $356 PayPal? No No Yes No No Yes No No Yes No No Yes Yes No No Yes No No No No Yes No No No No No Yes Yes Yes Yes Yes No Yes No No Yes No No Yes No Yes No No No No No No Yes No No BML?No No No No Yes Yes No Yes Yes No Yes No Yes No No No No No No No Yes No No No No No Yes Yes Yes No Yes No Yes Yes No Yes No No Yes Yes No Yes No No No Yes No Yes No No Comment Ended BML relationship after PayPal Acquisition Could leverage BML relationship Could leverage BML relationship Site now owned by Systemax, a PayPal customer Could leverage BML relationship Could leverage BML relationship Could leverage BML relationship Could leverage BML relationship Source Internet Retailer, J. P. Morgan estimates 19 Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 Off-eBay market share of 4. % in F08 We estimate that PayPals $29. 5B Merchant Services TPV in F08 (excluding BML) represented 4. 2% of the combined volume of eCommerce and Travel spend in that year. Our current estimates call for that number to rise to nearly 4. 9% of the total in F09. Table 7 J. P. Morgan eCommerce and Travel Market estimates $ in billions crime syndicate Off-eBay eCommerce Travel Total off-eBay volume PayPal off-eBay TPV PayPal penetration F07 311. 4 271. 9 583. 3 19. 9 3. 4% F08 379. 0 329. 2 708. 2 29. 5 4. 2% F09E 412. 0 342. 2 754. 2 37. 0 4. 9% F10E 490. 8 405. 1 895. 9 50. 2 5. 6% F11 E 561. 4 458. 0 1019. 3 64. 2 6. 3% Source Company reports and J. P.Morgan estimates We estimate that combined global online spend on eCommerce and Travel will exceed $1 trillion in F11. By our estimate, PayPals Merchant services would need to access over 6. 0% of this volume in order to hit the low end of the target $4B-$5B PayPal revenue range indicated by the company. 3. Growth through BillMeLater We see several key effects on PayPal of the 4Q08 acquisition of BillMeLater. In the near term, we think the addition could hurt profitability, firearm longer-term, we believe it can become a contributor to PayPal growth both on- and off-eBay. Minimal near-term TPV bear on. BML accounted for 1. 2% of total 1Q09 TPV.As such, we think it is important to note that the current impact of BML on PayPal results is likely to be somewhat small. Near-term growth likely slow. The company has state that it intends to be very conservative in its approach to the tradeoff between growing BML volume and maintaining healthy credit metrics. Given the current environment, we believe this will significantly damp growth in BML TPV through at least the end of F09. Integration, portfolio losses to impact profits. PayPals segment margin in the last two quarters was 500 bps lower than in the same two quarters a year ago. The company has attributed this decline to the impact of integrating BML as well as charge-offs related to the units loan portfolio.Medium-term, synergies become possible. Once consumer credit regains a measure of health, we think the company will begin to use BML as an additional tool to grow business, e. g. , by offering financing to incentivize users to pay with PayPal both on and off eBay. Target is convenience shoppers, not the underbanked. We believe eBay sees BML as an additional feature (or convenience) to attract higher-quality customers, rather than as a tool to expand its progress among customers who do not otherwise have access to credit. This approach ap pears consistent with the tradeoff storied above of slower growth in exchange for better credit metrics. 20Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 Auto financing unlikely to be priority. As noted above, Vehicles interchange on eBay have been largely beyond PayPals reach up to now. We think eBay sees BMLs sum of money expertise in transactional credit for smaller amounts than involved in a car purchase. A significant expansion of the business to include auto financing seems unlikely in the near to medium term. tinct on margins temporary. eBay expects segment margins to revert to historical trends as BML is incorporated into PayPal more completely (e. g. the company expects BML to be integrated into the PayPal wallet by 3Q additionally sales teams for BML and for Merchant Services are being unify to give clients a single touch point). BillMeLater C an Improve Funding Mix We think the impact of BillMeLater in the longer term will be felt most strongly on PayPals funding mix BML does not accept credit cards, and as such faces a lower transaction funding cost than the PayPal business as a whole. As such, any portion of TPV that shifts from the historical mix of funding sources to BML will help lower PayPals cost of funds. Assuming, conservatively, that PayPal manages the business to have a similar take to the rest of PayPal, we estimate that each 1% shift of TPV onto BillMeLater would drive 2 bps forward motion in funding cost.Thus, if BML were to grow to 4% penetration of our mid-point F11 scenario of $100B in TPV, it would drive 8 bps improvement in funding cost an incremental $80M contribution to the bottom line, or 5c of EPS. Table 8 Sensitivity Analysis EPS Boost from Lower Transaction Cost as BML Penetration Rises TPV in $B, BML as a % of TPV, EPS impact in $ TPV BML % 87. 1 100. 5 113. 8 Source J. P. Morgan estimates 1% $ 0. 01 $0. 01 $0. 01 2% $0. 02 $0. 02 $0. 03 3% $0. 03 $0. 04 $0. 04 4% $0. 04 $0. 05 $0. 05 5% $0. 05 $0. 06 $0. 07 Credit Cards Pain Could Be PayPals Gain Recently, the dramaturgy and Senate passed bills restricting certain practices in the credit card industry. We believe that such steps could have several points of impact on PayPal.Crucially, if these rule changes make credit card issuers less generous toward consumers (e. g. , lower profitability drives issuers to lower the levels of rewards for credit card use), PayPal could benefit from funding mix improvement, as the incentives for customers to fund their accounts with credit cards, vs. debit or ACH, would be reduced. Further, we believe that, should credit card issuers try to recapture profitability with less consumer-friendly rules as well as more frequent fees, the quality of the user experience for credit cards will erode, making consumers incrementally more likely to use PayPal. 21 Imran Khan (1-212) 622-6693 imran. t. emailprotected om Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 4. Growth Opportunity Expanding Merchant Acquiring Business We believe PayPal currently has two strategic growth opportunities going forward. The company can drive greater adoption of the PayPal solution by continuing to establish PayPal as a brand for online payment, alongside incumbent players such as Visa and MasterCard. Alternatively, PayPal can attempt to improve its payment economics by becoming a scale merchant acquirer. This would allow PayPal to capture the 30 bps on card transactions that we estimate it currently gives up to its acquirer.Finally, PayPal may attempt to skate along the knife-edge between the two above strategies, maintaining relationships with large acquirers such as Chase Paymentech while at the same time functioning as an acquirer for its smaller client base. PayPal as a Brand Chase Paymentech, the largest merchant acquirer in th e U. S. and the largest processor of e-Commerce transactions, offers PayPal as an integrated payment option alongside well known names like Visa and MasterCard. As such, Chase Paymentech clients have the option to advertise acceptance of PayPal as a payment type. According to Chase Paymentech, clients that accept PayPal (in addition to credit cards) commonly see an increase in sales. We raft this as an important distinction that PayPal has potential to be a powerful brand off eBay.We believe PayPals recent stated focus on larger merchants suggests this is the more likely strategic direction for the company, as PayPal may not want to jeopardize its status as a partner to the large acquirers, which make it easier for enterprise-scale businesses to include PayPal as one of several payment choices. Can PayPal Become a Scale Merchant Acquirer? In our view, PayPal also has the potential to become a scale merchant acquirer, which could enhance its off-eBay presence, especially among smal ler and mid-size merchants. As a merchant acquirer, PayPal would handle all of the card processing needs of a merchant, including directly processing other brands like Visa and MasterCard.We believe PayPal can offer very competitive rates to small merchants (who often pay heavy miscellaneous fees to acquirers), given its scale, allowing it to deepen relationships with merchants and potentially handle offline transactions as well. Smaller merchants (especially the 87% of US merchants with annual card acceptances under $100K) tend to pay a much higher spread to their acquirer. Whereas such merchants account for 10% of credit card volume, we believe they represent as much as $2. 5B in merchant acquirer revenue more than 1/3 of the total revenue in the US merchant acquirer business. We think PayPals historical strength among smaller sellers can be an advantage in accessing this market. Chase Paymentech offers PayPal as an integrated payment option for its clients.Chase Paymentech was th e largest merchant acquirer in the U. S. in 2008 with 22. 5% market share 22 Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 Table 9 Top Ten US Merchant Acquirers, 2008 $ in billions Merchant Acquirer Chase Paymentech First Data BofA Merchant Svcs Elavon Fifth Third Processing Solutions Global Payments Wells Fargo Merchant Services Heartland Payment Systems First National Merchant Solutions RBS WorldPay Source The Nilson Report. V/MA volume $567 $293 $283 $181 $165 $93 $91 $75 $51 $48 Market share 22. % 16. 9% 11. 2% 7. 2% 6. 5% 3. 7% 3. 6% 3. 0% 2. 0% 1. 9% As noted above, PayPal currently partners with Wells Fargo when it comes to handling non-PayPal branded transactions. One concern about a PayPal entry into the acquirer market would be whether it could successfully maintain its relationships with the other acquirers who currently offer PayPal as an option, and who would come to view PayPal as a more direct competitor. How Much is PayPal Worth? Combining the outlook outlined above, we believe PayPal TPV will reach $100. 5B in F11 though somewhat more pessimistic or optimistic projections for the units growth yield a range of $87B-$114B.At the midpoint, our estimate is for a 19% 3-year CAGR in Total Payment Volume. Figure 17 On current trends, TPV on pace for just over $100B in F11 Total PayPal TPV, $ in billions 125 100 75 50 2008 2009E Optimistic New Model 2010E Pessimistic 2011E Source Company reports, J. P. Morgan estimates Assuming the PayPal take rate remains just below 3. 9% (and assuming healthy growth in PayPal Marketing Services and Other revenue in F11), our TPV estimate would result in $4. 1B in PayPal revenue. On the profitability side, we believe PayPal is likely to see segment margins shrink to 17. 2% for F09 due to the continuing integration of BML by comparison, segment 23 Imran Khan (1-212) 622-6693 imran. t. emailprotecte d omTien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 operating margin as reported by the company was 20. 0% in F08. We think PayPal segment margins can expand back to above 18% by F11. Figure 18 plane section income could reach $785M in F11 PayPal segment operating income, $ in millions 1000 800 600 400 2008 2009E Optimistic New Model 2010E Pessimistic 2011E Source Company reports, J. P. Morgan estimates Based on our scenarios for PayPal F11 results, we believe the unit is likely to achieve approximately $450M in Net income. At a 20x multiple, this would yield a $9B valuation. Table 10 Scenario Analysis to Get to a PayPal value in billions except where indicated On-eBay TPV Off-eBay TPV Total TPV Revenue Segment Margin Unallocated Corporate Costs Pro Forma Operating Income ($M) Tax Rate Net Income F11 Earnings Multiple PayPal Value Source Company reports, J. P. Morgan estimates Worse Case 33. 0 54. 2 87. 1 3. 57 17. 5% 4% 482 25% 361 16 5. 8 Average Case 36. 3 64. 2 100. 5 4. 09 18. 8% 4% 603 25% 452 20 9. 0 Better Case 39. 6 74. 3 113. 8 4. 61 20. 0% 4% 737 25% 553 24 13. 3 Comparative Valuation of PayPal Unit We believe it is instructive to look at several comparables when it comes to valuing PayPal. Specifically, Visa and MasterCard provide payment networks, while Global 24Imran Khan (1-212) 622-6693 imran. t. emailprotected com Tien-tsin Huang, CFA (1-212) 622-6632 tien-tsin. emailprotected com North America Equity Research 26 June 2009 Payments is a pure-play merchant acquirer, functioning in much the same way as PayPal does by providing an on-ramp for merchants into the payment system. Table 11 Comparative Valuation for PayPal $ in billions PayPal $67B 11% 1% $2. 70B 13% 17. 2% Some credit risk due to BML Visa $2,702B -1% 60% $6. 94B 6% 52. 9% None 20. 8 17. 1 15. 4 MasterCard $1,759B -9% 34% $4. 97B 0% 43. 2% None 15. 7 13. 4 11. 7 Global Payments N/A ($93B in F08) N/A 4% $1. 59B 10% 19. 2% None 18. 4 15. 8 12. 5 CyberSource N/A N/A