eBay 2000 Annual Report Download - page 40

Download and view the complete annual report

Please find page 40 of the 2000 eBay annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 92

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

‚ diÇculties in staÇng and managing foreign operations;
‚ longer payment cycles, diÅerent accounting practices and problems in collecting accounts receivable;
‚ higher telecommunications and Internet service provider costs;
‚ more stringent consumer protection laws;
‚ cultural non-acceptance of online trading;
‚ stronger local competitors;
‚ seasonal reductions in business activity; and
‚ potentially adverse tax consequences.
Some of these factors may cause our international costs to exceed our domestic costs of doing business.
To the extent we expand our international operations and have additional portions of our international
revenues denominated in foreign currencies, we also could become subject to increased diÇculties in
collecting accounts receivable and risks relating to foreign currency exchange rate Öuctuations.
Our revenue from end-to-end service providers, commercial partners and advertising is subject to factors
beyond our control
We are receiving revenues from end-to-end service providers, commercial partnerships and direct
advertising promotions. These revenues may be aÅected by the Ñnancial condition of the parties with whom
we have these relationships and by the success of online promotions generally. The proÑtability of online
advertisements has deteriorated markedly recently. Our direct advertising revenue is dependent in signiÑcant
part on the performance of AOL's sales force, which we do not control. Reduction in these revenues, whether
due to the softening of the demand for online advertising in general or particular problems facing parties with
whom we have commercial relationships, could adversely aÅect our results.
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 Ñrearms, 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. We have been
subject to several lawsuits based upon such allegations. See ""Ì We are subject to intellectual property and
other litigation'' and ""Legal Proceedings.'' In order to reduce our exposure to this liability, we have prohibited
the listing of certain items and increased the number of personnel reviewing questionable items. We may in
the future implement other protective measures that could require us to spend substantial resources and/or to
reduce revenues by discontinuing certain service oÅerings. Any costs incurred as a result of liability or asserted
liability relating to the sale of unlawful goods or the unlawful sale of goods, could harm our business. In
addition, we have received signiÑcant and continuing media attention relating to the listing or sale of unlawful
goods on our website. This negative publicity could damage our reputation and diminish the value of our brand
name. It also could make users reluctant to continue to use our services.
Our business may be harmed by the listing or sale by our users of pirated items
We have received in the past, and we anticipate we will receive in the future, communications alleging
that certain items listed or sold through our service by our users infringe third-party copyrights, trademarks
and tradenames or other intellectual property rights. Although we have actively sought to work with the
content community to eliminate infringing listings on our website, some content owners have expressed the
view that our eÅorts are insuÇcient. Content owners have been active in defending their rights against online
companies, including eBay. An allegation of infringement of third-party intellectual property rights may result
35