eBay 2001 Annual Report Download - page 52

motivate highly skilled technical, managerial, marketing and customer support personnel. Competition for
these personnel is intense, especially for engineers and other professionals, especially in the San Francisco
Bay Area, and we may be unable to successfully attract, integrate or retain suÇciently qualiÑed personnel.
In making employment decisions, particularly in the Internet and high-technology industries, job
candidates often consider the value of the stock options they are to receive in connection with their
employment. Fluctuations in our stock price may make it more diÇcult to retain and motivate employees
whose stock option strike prices are substantially above current market prices.
Terrorist acts.
The September 11 terrorist attacks adversely aÅected our revenues and proÑts, particularly in the U.S.
and in the weeks immediately following these attacks. Any further terrorist actions, whether in the U.S. or
elsewhere, would likely adversely aÅect our business. In particular, any action that makes consumers less
willing to purchase or receive goods from third parties they do not know could disproportionately and
adversely aÅect our business.
Our oÉine auction businesses need to continue to acquire auction properties.
The businesses of ButterÑelds and Kruse are dependent on the continued acquisition of high quality
auction properties from sellers. Their future success will depend in part on their ability to maintain an
adequate supply of high quality auction property, particularly Ñne and decorative arts and collectibles and
collectible automobiles, respectively. There is intense competition for these pieces with other auction
companies and dealers. In addition, a small number of key senior management and specialists maintain the
relationships with the primary sources of auction property and the loss of these individuals could harm the
businesses of ButterÑelds and Kruse.
Our oÉine auction businesses could suÅer losses from price guarantees, advances or rescissions of sales.
In order to secure high quality auction properties from sellers, ButterÑelds and Kruse may give a
guaranteed minimum price or a cash advance to a seller, based on the estimated value of the property. If
the auction proceeds are less than the amount guaranteed, or less than the amount advanced and the seller
does not repay the diÅerence, the company involved will suÅer a loss. In addition, under certain
circumstances a buyer who believes that an item purchased at auction does not have good title, provenance
or authenticity may rescind the purchase. Under these circumstances, the company involved will lose its
commissions and fees on the sale even if the seller, in accordance with the terms and conditions of sale, in
turn accepts back the item and returns the funds he or she received from the sale.
We are subject to the risks of owning real property.
In connection with the acquisitions of Kruse and ButterÑelds, we acquired real property including
land, buildings and interests in partnerships holding land and buildings. We have little experience in
managing real property. Ownership of this property subjects us to risks, including:
‚ the possibility of environmental contamination and the costs associated with Ñxing any
environmental problems;
‚ adverse changes in the value of these properties, due to interest rate changes, changes in the
neighborhoods in which the properties are located, or other factors;
‚ the possible need for structural improvements in order to comply with zoning, seismic, disability act
or other requirements; and
‚ possible disputes with tenants, partners or others.
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