eBay 2012 Annual Report Download - page 39

one or more countries, and could also materially affect our brands, our international expansion efforts, our ability to attract and retain employees,
our business, and our operating results. Although we have implemented policies and procedures designed to ensure compliance with these laws
and regulations, there can be no assurance that our employees, contractors, or agents will not violate our policies.
In addition, we conduct certain functions, including product development, customer support and other operations, in regions outside the
U.S., particularly in India and China. We are subject to both U.S. and local laws and regulations applicable to our offshore activities, and any
factors which reduce the anticipated benefits associated with providing these functions outside of the U.S., including cost efficiencies and
productivity improvements, could adversely affect our business.
We maintain a portion of Shopping.com's research and development facilities and personnel in Israel, and have acquired other Israeli
companies. Political, economic and military conditions in Israel affect those operations. Increased hostilities or terrorism within Israel or armed
hostilities between Israel and neighboring countries or other entities could make it more difficult for us to continue our operations in Israel,
which could increase our costs. In addition, many of our employees in Israel could be required to serve in the military for extended periods of
time under emergency circumstances. Our Israeli operations could be disrupted by the absence of employees due to military service, which could
adversely affect our business.
Acquisitions, joint ventures and strategic investments could result in operating difficulties, dilution, and other harmful consequences.
We have acquired a significant number of businesses, technologies, services and products. We expect to continue to evaluate and consider
a wide array of potential strategic transactions as part of our overall business strategy, including business combinations, acquisitions and
dispositions of businesses, technologies, services, products and other assets, as well as strategic investments and joint ventures. At any given
time we may be engaged in discussions or negotiations with respect to one or more of these types of transactions. Any of these transactions
could be material to our financial condition and results of operations.
These transactions involve significant challenges and risks. Some of the areas where we may face risks or difficulties include:
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• the need to integrate the operations, systems (including accounting, management, information, human resource and other
administrative systems), technologies, products and personnel of each acquired company, which is itself an inherently risky process;
the inefficiencies and lack of control that may result if such integration is delayed or not implemented; and unforeseen difficulties and
expenditures that may arise in connection with integration;
• diversion of management time, as well as a shift of focus from operating the businesses to issues related to integration and
administration, particularly given the number, size and varying scope of our recent acquisitions;
• declining employee morale and retention issues resulting from changes in, or acceleration of, compensation, or changes in
management, reporting relationships, future prospects, or the direction of the business;
• the need to implement
controls, procedures and policies appropriate for a larger public company at companies that prior to acquisition
may have lacked such controls, procedures and policies;
• risks associated with our expansion into new international markets and doing business internationally, including those described
under the risk factor caption “There are many risks associated with our international operations” above;
• difficulties in entering new markets where we have no or limited direct prior experience or where competitors may have stronger
market positions;
• in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the
particular economic, currency, political and regulatory risks associated with specific countries;
• the potential loss of key customers, vendors and other business partners of the companies we acquire following and continuing after
announcement of our acquisition plans;
•
in some cases, the need to transition operations, users and customers onto our existing or new platforms;
• liability for activities of the acquired company before the acquisition, including intellectual property and other litigation claims or
disputes, violations of laws, rules and regulations, commercial disputes, tax liabilities and other known and unknown liabilities;
•
the potential loss of key employees following the acquisition;
• the acquisition of new customer and employee personal information, which in and of itself may require regulatory approval and or
additional controls, policies and procedures and subject us to additional exposure; and