eBay 2000 Annual Report Download - page 47

addition, employee turnover frequently increases during the period following an acquisition as employees
evaluate possible changes in compensation, culture, reporting relationships, and the direction of the business.
Such increased turnover could increase our costs and reduce our future revenues. Our future success also will
depend on our ability to attract, train, retain and motivate highly skilled technical, managerial, marketing and
customer support personnel. Competition for these personnel is intense, especially for engineers and other
professionals, especially in the San Francisco Bay Area, and we may be unable to successfully attract,
integrate or retain suÇciently qualiÑed personnel. In making employment decisions, particularly in the
Internet and high-technology industries, job candidates often consider the value of the stock options they are
to receive in connection with their employment. Fluctuations in our stock price may make it more diÇcult to
retain and motivate employees whose stock option strike prices are substantially above current market prices.
Our oÉine auction businesses need to continue to acquire auction properties
The businesses of ButterÑelds and Kruse are dependent on the continued acquisition of high quality
auction properties from sellers. Their future success will depend in part on their ability to maintain an
adequate supply of high quality auction property, particularly Ñne and decorative arts and collectibles and
collectible automobiles, respectively. There is intense competition for these pieces with other auction
companies and dealers. In addition, a small number of key senior management and specialists maintain the
relationships with the primary sources of auction property and the loss of any of these individuals could harm
the business of ButterÑelds and Kruse.
Our oÉine auction businesses could suÅer losses from price guarantees, advances or rescissions of sales
In order to secure high quality auction properties from sellers, ButterÑelds and Kruse may give a
guaranteed minimum price or a cash advance to a seller, based on the estimated value of the property. If the
auction proceeds are less than the amount guaranteed, or less than the amount advanced and the seller does
not repay the diÅerence, the company involved will suÅer a loss. In addition, under certain circumstances a
buyer who believes that an item purchased at auction does not have good title, provenance or authenticity may
rescind the purchase. Under these circumstances, the company involved will lose its commissions and fees on
the sale even if the seller, in accordance with the terms and conditions of sale, in turn accepts back the item
and returns the funds he or she received from the sale.
We are subject to the risks of owning real property
In connection with the acquisitions of Kruse and ButterÑelds we acquired real property including land,
buildings and interests in partnerships holding land and buildings. We have no experience in managing real
property. Ownership of this property subjects us to new risks, including:
‚ the possibility of environmental contamination and the costs associated with Ñxing any environmental
problems;
‚ adverse changes in the value of these properties, due to interest rate changes, changes in the
neighborhoods in which the properties are located, or other factors;
‚ the possible need for structural improvements in order to comply with zoning, seismic, disability act or
other requirements; and
‚ possible disputes with tenants, partners or others.
Our market is intensely competitive
Depending on the category of product, we currently or potentially compete with a number of companies
serving particular categories of goods as well as those serving broader ranges of goods. The Internet is a new,
rapidly evolving and intensely competitive area. We expect competition to intensify in the future as the
barriers to entry are relatively low, and current and new competitors can launch new sites at a nominal cost
using commercially available software. Our broad-based competitors include the vast majority of traditional
department and general merchandise stores as well as emerging online retailers. These include most
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