eBay 2012 Annual Report Download - page 43

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Problems with or price increases by third parties who provide services to us or to our users could harm our business.
A number of parties provide services to us or to our users that benefit us. Such services include seller tools that automate and manage
listings, merchant tools that manage listings and interface with inventory management software, storefronts that help our users list items, caching
services that make our sites load faster and shipping providers that deliver goods sold on our platform, among others. In some cases we have
contractual agreements with these companies that give us a direct financial interest in their success, while in other cases we have none. PayPal is
dependent on the processing companies and banks that link PayPal to the payment card and bank clearing networks. Similarly, Bill Me Later
relies on an unaffiliated lender in providing the Bill Me Later service and also relies heavily on third parties to operate its services, including
merchant processors and payment gateways to process transactions. In addition, GSI utilizes unaffiliated payment processing companies to
process transactions on the websites operated by GSI's clients, third parties to provide underlying components of its ecommerce platform, and
third parties in its operations business to perform services during peak order volume periods. Financial or regulatory issues, labor issues (e.g.,
strikes, lockouts or work stoppages) or other problems that prevent these companies from providing services to us or our users could reduce the
number of listings on our sites, make it more difficult for users to complete transactions on our websites and mobile platforms, or adversely
affect GSI's ability to timely fulfill and ship products sold on the websites operated by GSI's clients, which would harm our business.
Price increases by, or service terminations, disruptions or interruptions at, companies that provide services to our users and clients (such as
postal and delivery services, as well as our recently launched global shipping platform intended to facilitate cross-border transactions between
buyers and sellers) could also reduce the number of listings on our websites or make it more difficult for our sellers to complete transactions or
for us to timely fulfill and ship products sold on the websites operated by GSI's clients, thereby harming our business. Some third parties who
provide services to us may have or gain market power and be able to increase their prices to us without competitive constraint. In addition, the
U.S. Postal Service has announced that it is considering closing thousands of local post offices and ending Saturday mail delivery. While we
continue to work with global carriers to offer our sellers a variety of shipping options and to enhance our shipping experience, these closures
could require certain sellers to utilize alternatives which could be more expensive or inconvenient, which could in turn decrease the velocity of
trade on our site, thereby harming our business. Any security breach at a company providing services to our users could also adversely affect our
customers and harm our business. We have outsourced certain functions to third-party providers, including some customer support and product
development functions, which are critical to our operations. If our service providers do not perform satisfactorily, our operations could be
disrupted, which could result in user dissatisfaction and adversely affect our velocity of trade, business, reputation and operating results.
Although we generally have been able to renew or extend the terms of contractual arrangements with, or if necessary replace, third parties
who provide services to us on acceptable terms, there can be no assurance that we will continue to be able to do so in the future. If any third
parties were to stop providing services to us on acceptable terms, including as a result of bankruptcy due to poor economic conditions, we may
be unable to procure alternatives from other third parties in a timely and efficient manner and on acceptable terms, or at all. In addition, there can
be no assurance that third parties who provide services directly to our users will continue to do so on acceptable terms, or at all.
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