eBay 2008 Annual Report Download - page 22

• our ability to meet regulatory requirements as we expand the range and geographical scope of PayPal’s
services and the range of services (and marketing programs) offered by Skype;
• the actions of our competitors, including the introduction of new sites, services, and products;
• consumer confidence in the safety and security of transactions using our websites or technology and our
ability to manage the costs of our user protection programs;
• our ability to manage PayPal’s payment funding mix and the transaction loss rate in our Payments business;
• the costs and results of litigation that involves us;
• 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 networks and banks;
• our ability to manage, profitably expand and effectively monetize the Skype business;
• our ability to manage our businesses following recent reductions in our workforce;
• the cost and availability of online and traditional advertising, and the success of our brand building and
marketing campaigns;
• 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 which 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, malware and other dangers of the
Internet; and
• macroeconomic and geopolitical events affecting commerce generally.
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, 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 invest heavily in marketing and promotion, customer support, protection programs, technology and further
development of the operating infrastructure for our core and non-core operations. Some of this investment entails
long-term contractual commitments. As a result, we may be unable to adjust our spending rapidly enough to
compensate for any unexpected revenue shortfall, which may harm our profitability. Growth rates of our
Marketplaces businesses in our most established markets, such as the U.S., Germany and the U.K., have continued
to decline. Despite our efforts to stem these declines, growth rates in these and other markets may continue to
decline. As our penetration in established markets grows, we will increasingly need to focus on keeping existing
users, especially our top buyers and sellers, active and increasing their activity level on our websites in order to
continue to grow our business. In addition, our Marketplaces business is facing increased competitive pressure. If
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