eBay 2000 Annual Report Download - page 20

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Business-to-Business: Ariba, BidFreight.com, BizBuyer.com, bLiquid.com, CloseOutNow.com, Com-
merce One, Concur Technologies, DoveBid, FreeMarkets, Oracle, PurchasePro.com, RicardoBiz.com, Sabre,
SurplusBin.com, UnionStreet.com, Ventro, VerticalNet
Additionally, eBay faces competition from various online auction sites including: Amazon.com, the
Fairmarket Auction Network (an auction network including Microsoft's MSN, Excite@Home, Dell Com-
puter, ZD Net, Lycos and more than 100 others), First Auction, Surplus Auction, uBid, Yahoo! Auctions and
a large number of other companies using an auction format for consumer-to-consumer or business-to-
consumer sales. Overseas, we face competition from Yahoo! Auctions in most countries and from a large
number of regional and national competitors in each country.
The principal competitive factors for eBay include the following:
‚ ability to attract buyers;
‚ volume of transactions and selection of goods;
‚ customer service; and
‚ brand recognition.
With respect to eBay's online competition, additional competitive factors are:
‚ community cohesion and interaction;
‚ system reliability;
‚ reliability of delivery and payment;
‚ website convenience and accessibility;
‚ level of service fees; and
‚ quality of search tools.
Some current and potential competitors have longer company operating histories, larger customer bases
and greater brand recognition in other business and Internet spaces than eBay does. Some of these competitors
also have signiÑcantly greater Ñnancial, marketing, technical and other resources. Other online trading services
may be acquired by, receive investments from or enter into other commercial relationships with larger, well-
established and well-Ñnanced companies. As a result, some of eBay's competitors with other revenue sources
may be able to devote more resources to marketing and promotional campaigns, adopt more aggressive pricing
policies and devote substantially more resources to website and systems development than we are able to.
Increased competition may result in reduced operating margins, loss of market share and diminished value of
our brand. Some of eBay's competitors have oÅered services for free, and others may do this as well. eBay may
be unable to compete successfully against current and future competitors.
In order to respond to changes in the competitive environment, eBay may, from time to time, make
pricing, service or marketing decisions or acquisitions that could harm its business. For example, eBay has
implemented an insurance program that generally insures items up to a value of $200, with a $25 deductible,
for users with a non-negative feedback rating at no cost to the user. New technologies may increase the
competitive pressures by enabling our competitors to oÅer a lower cost service. Some Internet-based
applications that direct Internet traÇc to certain websites may channel users to trading services that compete
with eBay.
Although eBay has established Internet traÇc arrangements with several large online services and search
engine companies, these arrangements may not be renewed on commercially reasonable terms. Even if these
arrangements are renewed, they may not result in increased usage of its service. In addition, companies that
control access to transactions through network access or Internet browsers could promote eBay's competitors
or charge eBay substantial fees for inclusion.
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