eBay 1999 Annual Report Download - page 34

of our business and our limited operating history, we believe that period-to-period comparisons of our operating
results are not necessarily meaningful. You should not rely upon our historical results as indications of our future
performance.
Acquisitions could result in dilution, operating difficulties and other harmful consequences
If appropriate opportunities present themselves, we intend to acquire businesses, technologies, services or
products that we believe are strategic. In 1999 we completed the four acquisitions described earlier in this
document as well as several smaller acquisitions. The process of integrating any acquisition may create
unforeseen operating difficulties and expenditures and is itself risky. The areas where we may face difficulties
include:
●diversion of management time (at both companies) during the period of negotiation through closing
and further diversion of such time after closing from focus on operating the businesses to issues of
integration and future products;
●decline in employee morale and retention issues resulting from changes in compensation, reporting
relationships, future prospects, or the direction of the business;
●the need to integrate each company’s accounting, management information, human resource and other
administrative systems to permit effective management and the lack of control if such integration is
delayed or not implemented; and
●the need to implement controls, procedures and policies appropriate for a larger public company at
companies that prior to acquisition had been smaller, private companies.
Prior to the 1999 acquisitions we had almost no experience in managing this integration process. Most of
our acquisitions to date have involved either family run companies or very early stage companies, which may
worsen these integration issues. Moreover, the anticipated benefits of any or all of these acquisitions may not be
realized. Future acquisitions or mergers could result in potentially dilutive issuances of equity securities, the
incurrence of debt, contingent liabilities or amortization expenses related to goodwill and other intangible assets,
any of which could harm our business. Future acquisitions or mergers may require us to obtain additional equity
or debt financing, which may not be available on favorable terms or at all. Even if available, this financing may
be dilutive.
Unauthorized break-ins or other assaults on our service could harm our business
Our servers are vulnerable to computer viruses, physical or electronic break-ins and similar disruptions,
which could lead to interruptions, delays, loss of data or the inability to complete customer transactions. In
addition, unauthorized persons may improperly access our data. We have experienced an unauthorized break-in
by a ‘‘hacker’’ who has stated that he can in the future damage or change our system or take confidential
information. We have also experienced ‘‘denial of service’’ attacks on our system which made our website
unavailable for periods of time. These and other types of attacks could harm us. Actions of this sort may be very
expensive to remedy and could damage our reputation and discourage new and existing users from using our
service.
Our business may be harmed by the listing or sale by our users of illegal items
The law relating to the liability of providers of online services for the activities of their users on their service
is currently unsettled. We are aware that certain goods, such as firearms, other weapons, adult material, tobacco
products, alcohol and other goods that may be subject to regulation by local, state or federal authorities, have
been listed and traded on our service. We may be unable to prevent the sale of unlawful goods, or the sale of
goods in an unlawful manner, by users of our service, and we may be subject to allegations of civil or criminal
liability for unlawful activities carried out by users through our service. In order to reduce our exposure to this
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