eBay 2004 Annual Report Download - page 66

Internet access and services. The Internet has experienced, and is likely to continue to experience, signiÑcant
growth in the numbers of users and amount of traÇc. The Internet infrastructure may be unable to support
such demands. In addition, increasing numbers of users, increasing bandwidth requirements, or problems
caused by ""viruses,'' ""worms,'' and similar programs may harm the performance of the Internet. The
backbone computers of the Internet have been the targets of such programs. The Internet has experienced a
variety of outages and other delays as a result of damage to portions of its infrastructure, and it could face
outages and delays in the future. These outages and delays could reduce the level of Internet usage as well as
the level of traÇc and the processing transactions on our service.
We need to develop new services, features, and functions in order to expand.
We plan to expand our operations by developing new or complementary services, products, or transaction
formats and expanding the breadth and depth of our pre-trade and post-trade services. We may be unable to
expand our operations in a cost-eÅective or timely manner. We are pursuing strategic relationships with other
companies to provide many of these services. As a result, we may be unable to control the quality of these
services or adequately address problems that arise. Expanding our operations in this manner also will require
signiÑcant additional expenses and development, operations and other resources and will strain our manage-
ment, Ñnancial and operational resources. The lack of acceptance of any new businesses or services could
harm our business, damage our reputation, and diminish the value of our brand.
We may be unable to protect or enforce our own intellectual property rights adequately.
We regard the protection of our trademarks, copyrights, patents, domain names, trade dress, and trade
secrets as critical to our success. We aggressively protect our intellectual property rights by relying on a
combination of trademark, copyright, patent, trade dress and trade secret laws, and through the domain name
dispute resolution system. We also rely on contractual restrictions to protect our proprietary rights in products
and services. We have entered into conÑdentiality and invention assignment agreements with our employees
and contractors, and nondisclosure agreements with parties with whom we conduct business in order to limit
access to and disclosure of our proprietary information. These contractual arrangements and the other steps we
have taken to protect our intellectual property may not prevent misappropriation of our technology or deter
independent development of similar technologies by others. We pursue the registration of our domain names,
trademarks, and service marks in the U.S. and internationally. EÅective trademark, copyright, patent, trade
dress, trade secret, and domain name protection is very expensive to maintain and may require litigation. We
must protect our trademarks, patents, and domain names in an increasing number of jurisdictions, a process
that is expensive and may not be successful in every location. We have licensed in the past, and expect to
license in the future, certain of our proprietary rights, such as trademarks or copyrighted material, to others.
These licensees may take actions that diminish the value of our proprietary rights or harm our reputation.
We are subject to the risks of owning real property.
We own real property including land and buildings related to our operations. We have little experience in
managing real property. Ownership of this property subjects us to 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, neighboring owners, or others.
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