eBay 2009 Annual Report Download - page 20

• PayPal Student Account, which enables parents to electronically transfer money to an account their
children can access for use online and offline via the Student Card; and
• PayPal Money Market Fund, which allows participants to earn a yield on the funds in their PayPal
account.
Communications
Our Communications segment was comprised of Skype. Skype is a global Internet communications
company that offers a way for people in almost every country around the world to stay in touch over the Internet
through free voice and video calls, sending instant messages, SMS (text messaging) or files, and by making
low-cost calls to landline and mobile numbers. Skype primarily generated revenue through fees charged to users
to connect Skype’s Internet communications products to traditional fixed-line and mobile telephones (which we
refer to as SkypeOut minutes).
On November 19, 2009, we completed the sale of Skype to an entity (“Buyer”) owned and organized by an
investor group. We received approximately $1.9 billion in cash, a subordinated note issued by a subsidiary of the
Buyer in the principal amount of $125.0 million and an equity stake of approximately 30% of the outstanding
capital stock of the Buyer. Skype was consolidated with our results of operations through November 19, 2009
(the date that the sale of Skype was competed), and after that date, is no longer consolidated with our results of
operations. Our noncontrolling ownership interest in the Buyer is accounted for as an equity investment. For
additional details related to the sale of Skype, please see “Note 4 – Sale of Skype” to the consolidated financial
statements included in this report.
Other Items
Employees
As of December 31, 2009, eBay Inc. and its subsidiaries employed approximately 16,400 people (including
temporary employees), approximately 9,700 of whom were located in the U.S.
Competition
We encounter vigorous competition in our businesses from numerous sources. For our Marketplaces
segment, our users can find, buy, sell and pay for similar items through a variety of competing channels. These
include, but are not limited to, online and offline retailers, distributors, liquidators, import and export companies,
online and offline auctioneers, catalog and mail-order companies, classifieds, directories, search engines,
products of search engines, virtually all online and offline commerce participants (consumer-to-consumer,
business-to-consumer and business-to-business), online and offline shopping channels and networks. As our
product offerings continue to broaden into new categories of items and new commerce formats, we expect to face
additional competition from other online and offline channels for those new offerings. We compete on the basis
of price, product selection, and services. Our growth rates in our most mature markets have significantly slowed
and we are losing market share in some segments. For our Payments segment, our users may choose to pay
through a variety of alternative means, including other online payment services, offline payment methods such as
cash, check or money order, and traditional online or offline credit card merchant accounts. To compete
effectively, we may need to expend significant resources in technology and marketing. These efforts may be
expensive and could reduce our margins and have a materially adverse effect on our business, financial position,
operating results and cash flows and reduce the trading price of our stock. Despite our efforts to preserve and
expand the size and diversity of our users’ online community and enhance the user experience, we may not be
able to continue to manage our operating expenses or increase or maintain our revenue to avoid or reduce a
decline in our consolidated net income or avoid a net loss. 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.”
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