eBay 2003 Annual Report Download - page 16

holidays. We have historically experienced our strongest quarters of online growth in our Ñrst and fourth
Ñscal quarters. PayPal has shown similar seasonality, except that its strongest quarter of online growth has
historically been the fourth Ñscal quarter. We expect these patterns of seasonality to become more
pronounced as our websites gain acceptance by a broader base of mainstream users and as the size of our
European operations, which experience greater seasonality, grows relative to our other operations.
Intellectual Property
We regard the protection of our trademarks, copyrights, patents, domain names, trade dress and trade
secrets as critical to our success. We have entered into conÑdentiality and invention assignment agreements
with our employees and contractors, and nondisclosure agreements with parties with whom we conduct
business in order to limit access to and disclosure of our proprietary information.
We aggressively protect our intellectual property rights by relying on a combination of trademark,
copyright, patent, trade dress and trade secret laws and by using the domain name dispute resolution
system. As a result, we actively pursue the registration of our trademarks, copyrights, patents and domain
names in the U.S. and other major countries. We must also protect our trademarks, patents and domain
names in an increasing number of jurisdictions, a process that is expensive, may require litigation, and may
not be successful in every location. We have registered or applied for our ""eBay'' trademark in the U.S.
and over 50 non-U.S. jurisdictions and have in place an active program to continue securing the ""eBay''
and ""PayPal'' domain names in major non-U.S. jurisdictions. We have Ñled to protect our rights to the
""eBay'' and ""PayPal'' names in certain new top-level domains such as "".biz'' "".info'' and "".us'' that have
become operational more recently. Our inability to secure our trademarks or domain names could
adversely aÅect us in any jurisdiction in which we are not able to register.
Third parties have from time to time claimed, and others may claim in the future, that we have
infringed their past, current or future intellectual property rights. We are involved in several such legal
proceedings. Please see the information in ""Item 3: Legal Proceedings'' and in Item 7 under ""Risk Factors
That May AÅect Results of Operations and Financial Condition Ì We are subject to intellectual property
and other litigation'' and ""Ì We may be unable to protect or enforce our own intellectual property rights
adequately.''
Employees
As of December 31, 2003, eBay employed approximately 5,700 persons (excluding approximately 500
temporary employees), of whom approximately 4,200 (excluding approximately 400 temporary employees)
were in the United States. Our future success is substantially dependent on the performance of our senior
management and key technical personnel and on our continuing ability to Ñnd and retain highly qualiÑed
technical and managerial personnel.
Segments
Reporting segments are based upon our internal organization structure, the manner in which our
operations are managed, the criteria used by our chief operating decision-maker to evaluate segment
performance, the availability of separate Ñnancial information and overall materiality considerations.
We have identiÑed three reporting segments: U.S., International and Payments. The U.S. segment
includes U.S. online marketplace trading platforms other than those of our PayPal and Billpoint
subsidiaries. The International segment includes our international online marketplace trading platforms
other than those of our PayPal and Billpoint subsidiaries. The Payments segment includes our global
payments platform consisting of our PayPal and Billpoint subsidiaries. The Payments amounts reÖect
Billpoint's historical operations and PayPal's operations for the post-acquisition period from October 4,
2002 through December 31, 2003. We discontinued Billpoint's operations in the Ñrst half of 2003.
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