eBay 2001 Annual Report Download - page 54

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Tool/Equipment/Hardware: Home Depot, HomeBase, Amazon.com, Ace Hardware, OSH
Business-to-Business: Ariba, BidFreight.com, Bid4Assets, BizBuyer.com, bLiquid.com, Buyer Zone,
CloseOutNow.com, Commerce One, Concur Technologies, DoveBid, FreeMarkets, Iron Planet, labx.com,
Oracle, Overstock.com, PurchasePro.com, RicardoBiz.com, Sabre, SurplusBin.com, Ventro, VerticalNet
Additionally, we face competition from various online commerce sites including: Amazon.com,
Surplus Auction, uBid, Yahoo! Auctions and a large number of other regional and national companies
engaged in consumer-to-consumer or business-to-consumer sales. Overseas, we face competition from
similar channels in most countries and from a large number of regional and national online and oÉine
competitors in each country. DiÅerent aspects of our Ñxed-priced business compete with the major
Internet portals (AOL, MSN, Yahoo! and comparable companies outside the U.S.) as well as
Amazon.com and others.
The principal competitive factors for eBay include the following:
‚ ability to attract buyers;
‚ volume of transactions and selection of goods;
‚ customer service; and
‚ brand recognition.
With respect to our online competition, additional competitive factors include:
‚ community cohesion and interaction;
‚ system reliability;
‚ reliability of delivery and payment;
‚ website convenience and accessibility;
‚ level of service fees; and
‚ quality of search tools.
Some current and potential competitors have longer company operating histories, larger customer
bases and greater brand recognition in other business and Internet spaces than we do. Some of these
competitors also have signiÑcantly greater Ñnancial, marketing, technical and other resources. Other online
trading services may be acquired by, receive investments from, or enter into other commercial relationships
with larger, well-established and well-Ñnanced companies. As a result, some of our competitors with other
revenue sources may be able to devote more resources to marketing and promotional campaigns, adopt
more aggressive pricing policies and devote substantially more resources to website and systems
development than we can. Increased competition may result in reduced operating margins, loss of market
share and diminished value of our brand. Some of our competitors have oÅered services for free, and
others may do this as well. We may be unable to compete successfully against current and future
competitors.
In order to respond to changes in the competitive environment, we may, from time to time, make
pricing, service or marketing decisions or acquisitions that could harm our business. For example, we have
implemented a buyer protection program that generally insures items up to a value of $200, with a $25
deductible, for users with a non-negative feedback rating at no cost to the user. New technologies may
increase the competitive pressures by enabling our competitors to oÅer a lower cost service. Some
Internet-based applications that direct Internet traÇc to certain websites may channel users to electronic-
commerce services that compete with us.
Although we have established Internet traÇc arrangements with several large online services and
search engine companies, these arrangements may not be renewed on commercially reasonable terms. Even
if these arrangements are renewed, they may not result in increased usage of our service. In addition,
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