eBay 2007 Annual Report Download - page 21

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abundance and diversity of our users’ online community and enhancing our user experience, but we may not be able
to continue to manage our operating expenses to avoid or reduce a decline in our consolidated net income. For more
information regarding these risks, see the information in “Item 1A: Risk Factors” under the caption “Our industry is
intensely competitive, and other companies or governmental agencies may allege that our behavior is anti-
competitive.”
Seasonality
Our fourth quarter has historically been our strongest quarter of sequential revenue growth. We expect
transaction activity patterns on our websites to increasingly mirror general consumer buying patterns as our
businesses continue to mature. Please see the information in “Item 7: Management’s Discussion and Analysis of
Financial Condition and Results of Operations” under the heading “Seasonality.”
Technology
Marketplaces and Payments
Our Marketplaces and Payments platforms utilize a combination of proprietary technologies and services as
well as technologies and services provided by others. We have developed intuitive user interfaces, customer tools
and transaction processing, database and network applications that help enable our users to reliably and securely
complete transactions on our sites. Our technology infrastructure simplifies the storage and processing of large
amounts of data, eases the deployment and operation of large-scale global products and services and automates
much of the administration of large-scale clusters of computers. Our infrastructure has been designed around
industry-standard architectures to reduce downtime in the event of outages or catastrophic occurrences. We are
continually improving our technology to enhance the customer experience and to increase efficiency, scalability and
security. For information regarding technology related risks, see the information in “Item 1A: Risk Factors” under
the captions “Our failure to manage growth could harm our business,” and “System failures could harm our
business.”
Communications
Skype’s VoIP communication and other services are delivered through a peer-to-peer network architecture, in
which users joining the network provide a significant portion of the technology resources (for example, computer
bandwidth and hardware) that enable Skype’s services. To access Skype’s services, users download Skype software
over the Internet. Skype utilizes a combination of proprietary technologies and services as well as technologies and
services provided by others to design, develop and support its products. For more information regarding Skype’s
technology risks, see the information in “Item 1A: Risk Factors” under the caption “Skype depends on key
technology that is licensed from third parties.”
Intellectual Property
We regard the protection of our intellectual property as critical to our success. We have entered into
confidentiality 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.
We aggressively protect our intellectual property rights by relying on federal, state and common law rights, as
well as a variety of administrative procedures. We actively pursue the registration of our trademarks, copyrights,
patents and domain names in the U.S. and international jurisdictions. The expansion of our business has required us
to protect our trademarks, patents and domain names in an increasing number of jurisdictions, a process that is
expensive, may require litigation, and may not be successful in every location. We have registered our core brands
as trademarks and domain names in the U.S. and a large number of other jurisdictions and have in place an active
program to continue to secure trademarks and domain names that correspond to our brands in markets of interest. If
we are unable to secure our trademarks or domain names, we could be adversely affected in any jurisdiction in
which our trademarks or domain names are not registered.
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