eBay 1998 Annual Report Download - page 10

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10
less the number of negative postings) by more than one point, no matter how many comments an individual makes.
Furthermore, in order to discourage users from registering for the purpose of leaving excessive positive or negative
feedback, a user must be registered with eBay for at least five days in order to leave feedback. Users who receive a
sufficiently negative net feedback rating have their registrations suspended and are unable to bid on or list items for
sale. The Company believes its Feedback Forum is extremely useful in overcoming initial user hesitancy when
trading over the Web as it reduces the anonymity and uncertainty of dealing with an unknown trading partner. See
“Risk Factors—We are subject to risks associated with information disseminated through our service.”
Trust and Safety Initiatives. The Company has developed a number of programs designed to make users more
comfortable with dealing with an unknown trading partner over the Web. In addition to the Feedback Forum, the
Company offers the SafeHarbor program, which provides guidelines for trading, helps provide information to
resolve user disputes and responds to reports of misuses of the eBay service. The Company’ s SafeHarbor staff of 28
persons, including regular employees and contractors, investigates users’ complaints of possible misuse of eBay and
takes appropriate action, including issuing warnings to users or suspending users from bidding on or listing items for
sale. Some of the complaints the SafeHarbor staff investigates include various forms of bid manipulation, malicious
posting of negative feedback and posting illegal items for sale. The SafeHarbor staff also provides information to
assist users with disputes over the quality of the goods sold or other fraudulent activity and, upon receipt of an
officially filed, written claim of fraud from a user, will generally suspend the offending user from eBay. Also, upon
receipt of a written claim of intellectual property infringement by the owner of the intellectual property, the
Company will remove the offending item from eBay. Users who infringe intellectual property rights more than once
are suspended. To assist intellectual property owners, the Company is developing numerous tools, including an
automated daily key word search that will enable owners to locate quickly potentially infringing auction items and
dedicated email accounts established solely for owners to more easily contact eBay with regard to questionable
items. In addition, the Company has increased the number of personnel reviewing potentially illegal items. The
Company’ s trust and safety initiatives, including user verifications, insurance, integrated escrow and authentications
and appraisals, are intended to bolster eBay’ s reputation as a safe place to trade. See “Risk Factors—Our business
may be harmed by fraudulent activities on our website.”
What Can Be Purchased or Sold on eBay. The eBay service has grown from offering 10 product categories
when it was first introduced in September 1995 to offering more than 1,000 categories as of December 31, 1998. As
the number of product categories has grown, the Company periodically organizes the categories under different
headings to reflect the major types of items currently listed. As of December 31, 1998, these product categories were
organized under the following headings:
Antiques Jewelry, Gemstones
Books, Movies, Music Photo & Electronics
Coins & Stamps Pottery & Glass
Collectibles Sports Memorabilia
Computers Toys & Beanie Babies
Dolls, Figures Miscellaneous
Each category has numerous subcategories. As of December 31, 1998, eBay offered a selection of over 1.0
million items, with the most popular items sold on eBay being those that are relatively standardized or are well-
represented with a photo (and therefore can be evaluated to some degree without a physical inspection), are small
and easily shippable, and are relatively inexpensive. As the eBay community grows and additional items are listed,
the Company will continue to organize auctions under additional categories to respond to the needs of the eBay
community.
Community Services. Beyond providing a convenient means of trading, eBay has devoted substantial
resources to building an online person-to-person trading community, which the Company believes is one of the
strongest on the Web. Key components of the Company’ s community philosophy are maintaining an honest and
open marketplace and treating individual users with respect. The Company offers a variety of community and
support features that are designed to solidify the growth of the eBay community and to build eBay user affinity and
loyalty. eBay facilitates email communications between buyers and sellers by offering:
• category-specific chat rooms;