eBay 2007 Annual Report Download - page 42

online sites at a nominal cost using commercially available software or partnering with any one of a number of
successful ecommerce companies.
Our broad-based competitors include the vast majority of traditional department, warehouse, discount, and
general merchandise stores (as well as the online operations of these traditional retailers), emerging online retailers,
online classified services, and other shopping channels such as offline and online home shopping networks. These
include most prominently: Wal-Mart, Target, Sears, Macy’s, JC Penney, Costco, Office Depot, Staples, OfficeMax,
Sam’s Club, Amazon.com, Buy.com, AOL.com, Yahoo! Shopping, MSN, QVC, and Home Shopping Network.
A number of companies offer a variety of services that provide channels for buyers to find and buy items from
sellers of all sizes, including online aggregation and classifieds websites such as craigslist (in which we own a
minority equity stake), Google Base, Microsoft Live Expo, and Oodle.com. Our Kijiji websites offers classifieds
listings in a variety of local international markets, and in July 2007, Kijiji launched local classifieds websites in the
U.S. In many markets in which it operates, including in the U.S., our classified platforms compete against more
established online and offline classifieds platforms.
In 2005, we acquired Shopping.com Ltd., an online shopping comparison site. Shopping.com competes with
sites such as Buy.com, Google’s Product Search, Nextag.com, Pricegrabber.com, Shopzilla, and Yahoo! Product
Search, which offer shopping search engines that allow consumers to search the Internet for specified products.
Recent legal developments may affect the utility of shopping comparison sites if manufacturers begin requiring
more uniformity in product pricing. In addition, sellers are increasingly acquiring new customers by paying for
search-related advertisements on search engine sites such as Google and Yahoo!. We use product search engines and
paid search advertising to channel users to our sites, but these services also have the potential to divert users to other
online shopping destinations.
We also compete with many local, regional, and national specialty retailers and exchanges in each of the major
categories of products offered on our websites. For example, category-specific competitors to offerings in our
Computers, Consumer Electronics, and Cameras & Photo categories include Abt Electronics, Amazon.com, Apple,
Best Buy, Buy.com, Circuit City, CNET, CompUSA, Computer Discount Warehouse, Dell, Electronics Boutique,
Fry’s Electronics, Gamestop, Gateway, Hewlett Packard, Lenovo, MicroWarehouse, Overstock.com, PC Connec-
tion, PCMall.com, Radio Shack, Ritz Camera, Tech Depot, Tiger Direct, Tweeter Home Entertainment, uBid, major
wireless carriers, and computer, consumer electronics, and photography retailers
Our international Marketplaces websites compete with similar online and offline channels in each of their
vertical categories in most countries. In addition, they compete with general online ecommerce sites, such as Quelle
and Otto in Germany, Yahoo-Kimo in Taiwan, Daum and Gmarket in South Korea, OZtion and Aussie Bidder in
Australia, and Amazon in the United Kingdom and other countries. In some of these countries, there are online sites
that have much larger customer bases and greater brand recognition than we do, and in certain of these jurisdictions
there are competitors that may have a better understanding of local culture and commerce than we do.
The principal competitive factors for Marketplaces include the following:
• ability to attract and retain buyers and sellers;
• volume of transactions and price and selection of goods;
• customer service; and
• brand recognition.
With respect to our online competition, additional competitive factors include:
• community cohesion, interaction and size;
• website ease-of-use and accessibility;
• system reliability;
• reliability of delivery and payment;
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