eBay 2005 Annual Report Download - page 17

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dependent on the performance of our executive and senior management and key technical personnel, and on
our continuing ability to find and retain highly qualified technical and managerial personnel.
Segments
Reporting segments are based upon our internal organizational 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 financial information and overall materiality considerations.
The U.S. Marketplaces segment includes U.S. online marketplaces commerce platforms. The Interna-
tional Marketplaces segment includes our international online marketplaces commerce platforms. The
Payments segment consists of our global payments platform operated by our PayPal subsidiary. The
Communications segment consists of the VoIP offerings provided by our Skype subsidiary. The results of our
Communications segment reflect Skype's operations for the post-acquisition period from October 15, 2005
through December 31, 2005.
The financial information used by our chief operating decision-maker is focused on revenues and direct
costs of the particular segment. Direct contribution consists of net revenues less direct costs. Direct costs
include specific costs of net revenues, sales and marketing expenses, and general and administrative expenses
over which segment managers have direct discretionary control, such as advertising and marketing programs,
customer support expenses, bank charges, provisions for doubtful accounts, authorized credits and transaction
losses. Expenses over which segment managers do not currently have discretionary control, such as certain
general and administrative costs, are monitored by management through shared cost centers and are not
evaluated in the measurement of segment performance.
For an analysis of financial information about geographic areas as well as our segments, see ""Note 4 Ì
Segments'' to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Available Information
Our Internet address is www.ebay.com. Our investor relations website is located at
http://investor.ebay.com. We make available free of charge on our investor relations website under ""SEC
Filings'' our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and amendments to those reports as soon as reasonably practicable after we electronically file or furnish such
materials to the SEC.
ITEM 1A: RISK FACTORS
The risks and uncertainties described below are not the only ones facing us. Other events that we do not
currently anticipate or that we currently deem immaterial also may affect our results of operations and
financial condition.
Our operating results may fluctuate.
Our operating results have varied on a quarterly basis during our operating history. Our operating results
may fluctuate significantly as a result of a variety of factors, many of which are outside our control. Factors
that may affect our operating results include the following:
‚ our ability to retain an active user base, to attract new users, and to encourage existing users to list
items for sale, purchase items through our websites, or use our payment service or communication
software and products;
‚ the volume, size, timing, and completion rate of transactions using our websites or technology;
‚ the amount and timing of operating costs and capital expenditures relating to the maintenance and
expansion of our businesses, operations, and infrastructure;
‚ our ability to integrate, manage, and profitably expand our newly-acquired Skype business;
13