eBay 2012 Annual Report Download - page 15

revisions to the European Data Protection Directive) and interpretations of existing laws or regulations, including national court
interpretations of the European Court of Justice's decision in the L'Oréal case (see “Item 3: Legal Proceedings” below), that impose
liability on us for the actions of our users or otherwise harm our business models, especially as we become more actively involved in
various aspects of transactions on our platforms;
It is difficult for us to forecast the level or source of our revenues or earnings accurately. In view of the rapidly evolving nature of our
business, we believe that period-to-period comparisons of our operating results may not be meaningful, and you should not rely upon them as an
indication of future performance. We do not have backlog, and substantially all of our net revenues each quarter come from transactions
involving sales or payments during that quarter. Due to the inherent difficulty in forecasting revenues, it is also difficult to forecast income
statement expenses as a percentage of net revenues. Quarterly and annual income statement expenses as a percentage of net revenues may be
significantly different from historical or projected rates. Our operating results in one or more future quarters may fall below the expectations of
securities analysts and investors. In that event, the trading price of our common stock would almost certainly decline.
We invest heavily in technology, marketing and promotion, customer support, protection programs and further development of the
operating infrastructure for our operations. Some of this investment entails long-
term contractual commitments. As a result, we may be unable to
adjust our spending rapidly enough to compensate for any unexpected revenue shortfall, which may harm our profitability.
The growth of Internet users is slowing in many countries where we have a significant presence. As our growth rates in established markets
slow, we will increasingly need to focus on keeping existing Marketplaces users (especially our top buyers
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• regulatory and legal actions imposing obligations on our businesses or our users, including the injunction related to certain cosmetic
and perfume brands (see “Item 3: Legal Proceedings” below);
• the impact on PayPal or Bill Me Later of regulations enacted pursuant to new laws regulating financial institutions, including the
Dodd-Frank Wall Street Reform and Consumer Protection Act in the U.S., or the Dodd-Frank Act;
•
our ability to manage the costs of compliance with existing and new laws and regulations that affect our businesses;
•
the volume, velocity, size, timing, monetization, and completion rates of transactions using our websites or technology;
• 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 increase activity of PayPal account holders, particularly in our merchant services
business;
• our ability to develop product enhancements, programs, and features on different platforms and mobile devices at a reasonable cost
and in a timely manner, including our initiatives to make PayPal solutions available at the retail point of sale;
•
changes to our use of advertising on our sites;
• the actions of our competitors, including the introduction of new stores, channels, sites, applications, services, products and
functionality, or changes to the provision of services important to our success, including Internet search and access to smartphones
through operating systems;
•
the costs and results of litigation or regulatory actions that involve us;
•
technical difficulties or service interruptions involving our websites;
•
disruptions to services provided to us or our users by third parties;
•
our ability to manage the transaction loss rate in our Marketplaces, Payments and GSI ecommerce services businesses;
• our ability to manage funding costs, credit risk and interest-
rate risk associated with our Bill Me Later business;
• our ability to successfully and cost-
effectively integrate and manage businesses that we acquire;
• the amount and timing of operating costs and capital expenditures relating to the maintenance and expansion of our businesses,
operations and infrastructure;
• our ability to comply with the requirements of entities whose services are required for our operations, such as payment card networks
and banks;
•
the cost and availability of traditional and online advertising, and the success of our brand building and marketing campaigns;
•
our ability to attract new personnel in a timely and effective manner and to retain key employees;
•
the continued healthy operation of our technology suppliers and other parties with which we have commercial relations;
• continued consumer acceptance of the Internet and of mobile devices as a medium for commerce and payments in the face of
increasing publicity about data privacy issues, including breaches, fraud, spoofing, phishing, viruses, spyware, malware and other
dangers; and
•
macroeconomic and geopolitical events affecting commerce generally.