eBay 2013 Annual Report Download - page 14

Item 1A: RISK FACTORS
Risk Factors That May Affect Results of Operations and Financial Condition
Our operating and financial results are subject to various risks and uncertainties that could adversely affect our business, financial
condition, results of operations and cash flows, as well as the trading price of our common stock and debt securities.
Our operating and financial results have varied on a quarterly basis during our operating history. Our operating and financial 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 and
financial results include risks described elsewhere in this section and the following:
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• general economic conditions, including the possibility of a prolonged period of limited economic growth or possible economic
decline in Europe; adverse effects of the ongoing sovereign debt crisis in Europe, including increased Euro currency exchange rate
volatility, the negative impact of the crisis and related austerity measures on European economic growth, potential negative spillover
effects to the rest of the world, the “contagion”
risk of the crisis spreading to additional countries in Europe, the possibility that one or
more countries may leave the Euro zone and re-introduce their individual currencies, and, in more extreme circumstances, the
possible dissolution of the Euro currency; the possibility of greater austerity in the U.S. due to, among other factors, a potential
shutdown of the U.S. government, a potential failure to raise the “debt ceiling”, automatic sequesters, or other related actions (or
failure to take actions) by the U.S. Congress and executive branch and, more generally, the impact of uncertainty regarding the fiscal
policy of the U.S. government; disruptions to the credit and financial markets in Europe, the U.S., and elsewhere; 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 manage the rapid shift from online commerce and payments to mobile and multi-
channel commerce and payments;
• our ability to improve the quality of the user experience on our websites and through mobile devices (including our customer support
in the event of a problem) to keep pace with the improved quality of the user experience generally offered by competitive platforms;
• our ability to upgrade and develop our systems (including the migration to our Enterprise business' new enterprise commerce
platform and the “replatforming" of our base PayPal technology), infrastructure and customer service capabilities to accommodate
growth and to improve the functionality and reliability of our websites, mobile platforms and services at a reasonable cost while
maintaining 24/7 operations;
• the primary and secondary effects of previously announced and possible future changes to our pricing, products and policies,
including, among other changes, restrictions or holds on payments made to certain sellers or in connection with certain transactions;
changes to our fee structure; changes to the checkout process, including the eBay shopping cart/basket; the ability for users to connect
their eBay and PayPal accounts more easily; new functionality for sellers to specify shipping, payment and return policies
(collectively referred to as “business policies"), which sellers automatically began to be opted into beginning in August 2013 and
which will become mandatory in 2014; enforcement of new picture quality requirements for listed items starting in July 2013;
automatic enrollment of new sellers in an automated eBay returns process, and other products and features through which we are
increasingly intermediating more aspects of transactions between buyers and sellers using our platforms;
• our ability to retain an active user base, attract new users, and encourage existing users to list items for sale and purchase items
through our websites and mobile platforms, or use our payment services, especially in the face of improving competitor platforms;
• consumer confidence in the safety and security of transactions using our websites and technology (including through mobile devices)
and the effect of any changes in our practices and policies or of any events on such confidence;
• the actions of our competitors, including the introduction of new stores, channels, websites, mobile platforms, applications, services,
products and functionality, or changes to the provisions or prices of products and services important to our success, including
interchange, Internet search and mobile operating systems;
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our ability to effectively manage the costs of and administer our user protection programs;
• 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 comply with existing and new laws and regulations as we expand the range and geographical scope of our products and
services and as we grow larger, including those laws and regulations discussed below under the captions “There are many risks
associated with our international operations,” “We are subject to general litigation and regulatory disputes,” “Our Payments business
is subject to a number of laws and regulations, including those governing banking, cross-border and domestic money transmission,
foreign exchange and payment services, that vary in the markets where we operate,” “ Our Payments business is subject to anti-
money laundering and counter-