eBay 1999 Annual Report Download - page 39

●unscheduled system downtime;
●additions or departures of key personnel;
●announcements of technological innovations or new services by us or our competitors;
●changes in financial estimates by securities analysts;
●conditions or trends in the Internet and online commerce industries;
●changes in the market valuations of other Internet or online service companies;
●developments in Internet regulation;
●announcements by us or our competitors of significant acquisitions, strategic partnerships, joint
ventures or capital commitments;
●sales of our common stock or other securities in the open market; and
●other events or factors that may be beyond our control.
In addition, the trading price of Internet stocks in general, and ours in particular, have experienced extreme
price and volume fluctuations in recent months. These fluctuations often have been unrelated or disproportionate
to the operating performance of these companies. The valuations of many Internet stocks, including ours, are
extraordinarily high based on conventional valuation standards such as price to earnings and price to sales ratios.
The trading price of our common stock has increased enormously from the initial public offering price. These
trading prices and valuations may not be sustained. Any negative change in the public’s perception of the
prospects of Internet or e-commerce companies could depress our stock price regardless of our results. Other
broad market and industry factors may decrease the market price of our common stock, regardless of our
operating performance. Market fluctuations, as well as general political and economic conditions such as
recession or interest rate or currency rate fluctuations, also may decrease the market price of our common stock.
In the past, following declines in the market price of a company’s securities, securities class-action litigation
often has been instituted against the company. Litigation of this type, if instituted, could result in substantial costs
and a diversion of management’s attention and resources.
New and existing regulations could harm our business
We are subject to the same federal, state and local laws as other companies conducting business on the
Internet. Today there are relatively few laws specifically directed towards online services. However, due to the
increasing popularity and use of the Internet and online services, many laws relating to the Internet are being
debated at the state and federal levels and it is possible that laws and regulations will be adopted with respect to
the Internet or online services. These laws and regulations could cover issues such as online contracts, user
privacy, freedom of expression, pricing, fraud, content and quality of products and services, taxation, advertising,
intellectual property rights and information security. Applicability to the Internet of existing laws governing
issues such as property ownership, copyrights and other intellectual property issues, taxation, libel, obscenity and
personal privacy is uncertain. The vast majority of these laws were adopted prior to the advent of the Internet
and related technologies and, as a result, do not contemplate or address the unique issues of the Internet and
related technologies. Those laws that do reference the Internet, such as the recently passed Digital Millennium
Copyright Act, have not yet been interpreted by the courts and their applicability and reach are therefore
uncertain. In addition, numerous states, including the State of California, where our headquarters are located,
have regulations regarding how ‘‘auctions’’ may be conducted and the liability of ‘‘auctioneers’’ in conducting
such auctions. No legal determination has been made with respect to the applicability of the California
regulations to our business to date and little precedent exists in this area. Several states are considering imposing
these regulations upon us or our users, which could harm our business. In addition, as the nature of the products
listed by our users changes, we may become subject to new regulatory restrictions.
34