eBay 2009 Annual Report Download - page 45

Our businesses depend on continued and unimpeded access to the Internet. Internet service providers may be
able to block, degrade, or charge us or our users additional fees for our offerings.
Our customers rely on access to the Internet to use our products and services. In many cases that access is
provided by companies that compete with at least some of our offerings, including incumbent telephone
companies, cable companies, mobile communications companies, and large Internet service providers. Some of
these providers have stated that they may take measures that could degrade, disrupt, or increase the cost of
customers’ use of our offerings by restricting or prohibiting the use of their infrastructure to support or facilitate
our offerings, or by charging increased fees to us or our users to provide our offerings. In addition, Internet
service providers could attempt to charge us each time our customers use our offerings. Worldwide, a number of
companies have announced plans to take such actions or are selling products designed to facilitate such actions.
Interference with our offerings or higher charges for access to our offerings, whether paid by us or by our
customers, could cause us to lose existing customers, impair our ability to attract new customers, and harm our
revenue and growth.
Our tickets business is subject to regulatory, competitive, and other risks that could harm this business.
Our tickets business, which includes our StubHub business, is subject to numerous risks. Many jurisdictions
have laws and regulations covering the resale of event tickets, and some jurisdictions prohibit the resale of event
tickets at prices above the face value of the tickets, and new laws and regulations or changes to existing laws and
regulations imposing these or other restrictions may be adopted that could limit or inhibit our ability to operate,
or our users’ ability to continue to use, our tickets business. Regulatory agencies or courts may claim or hold that
we are responsible for ensuring that our users comply with these laws and regulations or that we or our users are
either subject to licensure or prohibited from reselling event tickets in their jurisdictions.
Some event organizers and professional sports teams have expressed concern about the resale of their event
tickets on our sites. Suits alleging a variety of causes of actions have in the past, and may in the future, be filed
against StubHub and eBay by venue owners, competitors, ticket buyers and unsuccessful ticket buyers. Such
litigation could result in damage awards, could require us to change our business practices in ways that may be
harmful to our business, or could otherwise negatively affect our tickets business. Our tickets business is also
subject to seasonal fluctuations and the general economic and business conditions that impact the sporting events
and live entertainment industries. The recent economic downturn has resulted in a decrease in ticket prices sold
on our sites and has negatively impacted revenue and profits. Our tickets business also faces significant
competition from a number of sources, including ticketing service companies (such as TicketMaster, Live Nation
and Tickets.com), event organizers (such as professional sports teams and leagues), ticket brokers, and other
online and offline ticket resellers, such as TicketsNow (which is owned by TicketMaster) and RazorGator. In
addition, ticketing service companies and event organizers have recently begun to issue event tickets through
paperless (electronic) ticketing systems that include restrictions on the transferability of such event tickets. To
the extent that event tickets issued in this manner cannot be resold on our websites, or to the extent that we are
otherwise unable to compete with these competitors, our tickets business would be harmed.
We depend on key personnel.
Our future performance depends substantially on the continued services of our senior management and other
key personnel and our ability to retain and motivate them. We do not have long-term employment agreements
with any of our key personnel, we do not maintain any “key person” life insurance policies, and some members
of our senior management team have fully vested the vast majority of their in-the-money equity incentives. The
loss of the services of any of our executive officers or other key employees could harm our business. Our new
businesses all depend on attracting and retaining key personnel. Our future success also will depend on our
ability to attract, train, retain and motivate highly skilled technical, managerial, marketing, and customer support
personnel. Competition for these personnel is intense, and we may be unable to successfully attract, integrate, or
retain sufficiently qualified personnel. In making employment decisions, particularly in the Internet and high-
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