Showing no signs of slowing down, eBay Inc. reports a 39% rise in listings to 1.9 billion in 2005 as its number of active users reached a record 71.8 million and gross merchandise sales, the total value of all closed listings on eBay's trading platforms, rose to $44 billion from $34 billion in 2004.

“We saw accelerating growth and momentum across the board,” CEO Meg Whitman said.

EBay said it now has 383,000 online stores worldwide operating within eBay.com, including 212,000 based in the U.S. It reported that total payment volume initiated through its PayPal system (excluding its payment gateway business) last year amounted to $27.5 billion, up 45% from $18.9 billion in 2004.

Consolidated net income last year rose 39% to $1.08 billion, up from $778.22 million in 2004, and net revenue rose 39.2% to $4.55 billion from $3.27 billion.

For the fourth quarter ended Dec. 31, gross merchandise sales rose 22% to $12 billion, up from $9.8 billion a year earlier. Fixed-price trading accounted for $4 billion or 34% of Q4 gross merchandise sales, eBay said.

The percentage of online revenue lost of fraud has been relatively stable over the past few years, according to CyberSource Corp.'s Seventh Annual Online Fraud Report – but the volume of e-commerce sales is driving a rising trend in dollars lost, with an estimated $2.8 billion lost to online fraud in 2005, up from $2.6 billion the previous year.

The report notes the percentage of revenues lost to fraud online was 1.8% in 2004 and actually slightly less, 1.6%, in 2005. But during that time, a 20% growth in e-commerce drove the dollar value represented by those percentages up to $2.8 billion in 2005 from $2.6 billion in 2004.

Online merchants with annual revenues of less than $5 million continue to experience higher rates of fraud, though CyberSource reports that their rate of fraud loss declined slightly during 2005. By contrast, merchants in the range of $5 million to $25 million experienced the greatest increase in loss rates over the year. CyberSource speculates that`s because this group is “operationally challenged;” the most likely to be migrating from an environment of a lower sales volume accompanied by a high degree of manual order review to one in which order volume is higher and they're struggling to automate review.

In 2005, CyberSource reported, manual review rates stabilized after rising for the previous four years. 73% of merchants are engaging in manual order review, with merchants having online revenues of less than $5 million have the highest order review rate at 28% of orders.

Merchants selling more than $5 million online review 15% to 25% of orders and are looking to automate that process. Medium and large-sized merchants in general employ twice the number of screening tools as smaller merchants and are two times as likely to use automated decision systems, the survey found. Surveyed merchants reported a rate of fraud associated with international orders twice as high as the overall average, and that they reject international orders at a rate three times higher than the overall average.

With e-commerce growing at the rate of about 20% a year, large merchants in particular can expect their existing fraud management capacities to be challenged by higher order volume. Their fraud management efficiency will have to increase by the same degree every year, and exceed 20% for healthy business growth, according to CyberSource.