eBay 2015 Annual Report Download - page 35

We may also need to expend significant additional resources to protect against security breaches or to
redress problems caused by breaches. These issues are likely to become more difficult and costly as we expand
the number of markets where we operate. Additionally, our insurance policies carry low coverage limits, which
may not be adequate to reimburse us for losses caused by security breaches and we may not be able to fully
collect, if at all, under these insurance policies.
Systems failures or cyberattacks and resulting interruptions in the availability of or degradation in the
performance of our websites, applications, products or services could harm our business.
Our systems may experience service interruptions or degradation due to of hardware and software defects or
malfunctions, computer denial-of-service and other cyberattacks, human error, earthquakes, hurricanes, floods,
fires, natural disasters, power losses, disruptions in telecommunications services, fraud, military or political
conflicts, terrorist attacks, computer viruses, or other events. Our systems are also subject to break-ins, sabotage
and intentional acts of vandalism. Some of our systems are not fully redundant and our disaster recovery
planning is not sufficient for all eventualities.
We have experienced and will likely continue to experience system failures, denial of service attacks and
other events or conditions from time to time that interrupt the availability or reduce the speed or functionality of
our websites and mobile applications. These events have resulted and likely will result in loss of revenue. A
prolonged interruption in the availability or reduction in the speed or other functionality of our websites and
mobile applications could materially harm our business. Frequent or persistent interruptions in our services could
cause current or potential users to believe that our systems are unreliable, leading them to switch to our
competitors or to avoid our sites, and could permanently harm our reputation and brands. Moreover, to the extent
that any system failure or similar event results in damages to our customers or their businesses, these customers
could seek significant compensation from us for their losses and those claims, even if unsuccessful, would likely
be time-consuming and costly for us to address. We also rely on facilities, components and services supplied by
third parties and our business may be materially adversely affected to the extent these components or services do
not meet our expectations or these third parties cease to provide the services or facilities. In particular, a decision
by any of our third party hosting providers to close a facility that we use could cause system interruptions and
delays, result in loss of critical data and cause lengthy interruptions in our services. We do not carry business
interruption insurance sufficient to compensate us for losses that may result from interruptions in our service as a
result of systems failures and similar events.
Acquisitions, dispositions, joint ventures, and strategic investments could result in operating difficulties and
could harm our business.
We have acquired a significant number of businesses of varying size and scope, technologies, services, and
products and have recently distributed 100% of the outstanding common stock of PayPal to our stockholders,
pursuant to which PayPal became an independent company, and sold our Enterprise business. We also 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. .
These transactions may involve significant challenges and risks, including:
• the potential loss of key customers, merchants, vendors and other key business partners of the
companies we acquire, or dispose of, following and continuing after announcement of our transaction
plans;
• declining employee morale and retention issues affecting employees of companies that we acquire or
dispose of, which may result from changes in compensation, or changes in management, reporting
relationships, future prospects or the direction of the acquired or disposed business;
• difficulty making new and strategic hires of new employees;
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