eBay 2009 Annual Report Download - page 22

heading “SEC Filings” our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on
Form 8-K and amendments to those reports as soon as reasonably practicable after such materials are
electronically filed with (or furnished to) the SEC. Information contained on our websites is not incorporated by
reference into this Annual Report on Form 10-K.
ITEM 1A: RISK FACTORS
Risk Factors That May Affect Results of Operations and Financial Condition
The risks and uncertainties described below are not the only ones facing us. Other events that we do not
currently anticipate or that we currently deem immaterial also may adversely affect our results of operations and
financial condition.
Our operating results may decline.
Our operating results have varied on a quarterly basis during our operating history. Our operating results
may fluctuate significantly as a result of a variety of factors, many of which are outside our control. Factors that
may affect our operating results include the following:
• general economic conditions, including the possibility of a protracted recession or prolonged period of
limited economic growth in the U.S. and a worldwide economic slowdown; disruptions to the credit
and financial markets in the U.S. and worldwide; contractions or limited growth in consumer spending
or consumer credit; and adverse economic conditions that may be specific to the Internet, ecommerce
and payments industries;
• our ability to retain an active user base, attract new users, and encourage existing users to list items for
sale, purchase items through our websites, or use our payment services, especially when consumer
spending has contracted;
• the primary and secondary effects of previously announced and possible future changes to our pricing,
products and policies, including, among other changes: a reduced emphasis on upfront fees (e.g.,
insertion fees for listings) and corresponding increases in success-based fees (e.g., final value fees for
sold items); the discontinuation of certain optional seller listing features and loss of associated
revenues; new algorithms for determining which listings appear at the top of searches; tighter seller
standards, which may restrict some sellers from selling on our websites even if they have been able to
do so historically; restrictions or holds on payments made to certain sellers or in connection with
certain categories of higher-risk transactions; incentives and rewards for top sellers, including pricing
discounts; increased protection for buyers; lower insertion fees for, and extended duration of, listings of
fixed-price items; shipping and handling limits on certain categories of items (e.g., media); requiring
sellers to accept at least one approved payment method (and restricting sellers from referencing
non-permitted payment methods, including paper forms of payment such as checks and money orders),
on eBay.com in the U.S. for most categories of items; and recently implemented changes intended to
drive more sales and improve seller efficiency, including, among others, the expansion of buyer
incentives and loyalty programs, requiring sellers to provide additional key information intended to set
buyer expectations and help reduce seller costs, changes to performance standards and/or rewards for
sellers (including the creation of a new top-rated seller status) and changes to the dispute resolution
process (including directing eBay buyers to resolve disputes with sellers through eBay instead of
through PayPal);
• our ability to improve the quality of the user experience on our websites (including in the event of a
problem) in light of the improved quality generally of the user experience offered by competitive
Internet merchants;
• our ability to reduce the loss of active buyers and sellers and increase activity of the users of our
Marketplaces business, especially with respect to our top buyers and sellers, and especially in the U.S.,
Germany and the U.K.;
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