eBay 2007 Annual Report Download - page 23

• our ability to manage PayPal’s transaction loss rate and payment funding mix;
• the costs and results of litigation that involves us;
• our ability to successfully integrate and manage businesses that we acquire;
• the cost and availability of online and traditional advertising, and the success of our brand building and
marketing campaigns;
• our ability to develop product enhancements, programs, and features at a reasonable cost and in a timely
manner;
• our ability to upgrade and develop our systems, infrastructure, and customer service capabilities to
accommodate growth and to improve our websites at a reasonable cost while maintaining 24/7 operations;
• technical difficulties or service interruptions involving our websites or services provided to us or our users by
third parties;
• our ability to comply with the requirements of entities whose services are required for our operations, such as
credit card associations and banks;
• our ability to expand PayPal’s product offerings outside of the U.S. (including our ability to obtain any
necessary regulatory approvals);
• our ability to increase the acceptance of PayPal by online merchants outside of our Marketplaces platforms,
which may require long implementation cycles and incentives to merchants that are initially dilutive;
• our ability to integrate, manage, and profitably expand and more effectively monetize the Skype business;
• our ability to attract new personnel in a timely and effective manner and to retain key employees;
• the continued healthy operation of our technology suppliers and other parties with whom we have
commercial relations;
• continued consumer acceptance of the Internet as a medium for commerce and communication in the face of
increasing publicity about fraud, spoofing, phishing, viruses, spyware, and other dangers of the Internet; and
• geopolitical events such as war, threat of war, or terrorist actions.
The increased variety of services offered on our websites makes it difficult for us to forecast the level or source
of our revenues or earnings accurately. In view of the rapidly evolving nature of our business and our limited
operating history, we believe that period-to-period comparisons of our operating results may not be meaningful, and
you should not rely upon them as an indication of future performance. We do not have backlog, and substantially all
of our net revenues each quarter come from transactions involving sales or payments during that quarter. Due to the
inherent difficulty in forecasting revenues, it is also difficult to forecast income statement expenses as a percentage
of net revenues. Quarterly and annual income statement expenses as a percentage of net revenues may be
significantly different from historical or projected rates. Our operating results in one or more future quarters may
fall below the expectations of securities analysts and investors. In that event, the trading price of our common stock
would almost certainly decline.
We may not maintain our level of profitability or rates of growth.
We believe that our continued profitability and growth will depend in large part on our ability to do the
following:
• attract new users, keep existing users active and reactivate former users on our websites and services, and
increase the activity levels of our active users;
• react to changes in consumer use of the Internet and changing customer demands, and develop new services
as well as new sources of revenues from our existing services;
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