eBay 2008 Annual Report Download - page 44

‘Collectibles’ category include, among others, Artfact, Beckett, Bonhams & Butterfields, Bowers and Morena,
Christie’s, Collectiblestoday.com, Collectors Universe, etsy, Franklin Mint, Go Collect, Heritage, Littletoncoin,
Mastronet, Replacements.com, Ruby Lane, Shop At Home, Sotheby’s, Tias, U.S. Mint, U.S. Postal Service, antique
and collectible dealers, antique and collectible fairs, auction houses, estate sales, flea markets and swap meets,
independent coin and stamp dealers, and specialty retailers.
Our international Marketplaces websites compete with similar online and offline channels in each of their
vertical categories in most countries. In addition, they compete with general online ecommerce sites, such as Quelle
and Otto in Germany, Leboncoin. fr and Price Minister in France, Tradus (recently acquired by Naspers) in Poland,
Yahoo-Kimo in Taiwan, Lotte and Gmarket in South Korea, Trading Post, OZtion and Aussie Bidder in Australia,
and Amazon in the United Kingdom and other countries. In some of these countries, there are online sites that have
much larger customer bases and greater brand recognition than we do, and in certain of these jurisdictions there are
competitors that may have a better understanding of local culture and commerce than we do.
The principal competitive factors for Marketplaces include the following:
• ability to attract and retain buyers and sellers;
• volume of transactions and price and selection of goods;
• customer service; and
• brand recognition.
With respect to our online competition, additional competitive factors include:
• community cohesion, interaction and size;
• website ease-of-use and accessibility;
• level of trust in the seller;
• system reliability;
• reliability of delivery and payment;
• level of service fees; and
• quality of search tools.
Some current and potential competitors have longer operating histories, larger customer bases and greater
brand recognition in other business and Internet sectors than we do. Other online trading services may be acquired
by, receive investments from, or enter into other commercial relationships with well-established and well-financed
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. Some of our competitors have offered services for free
and others may do this as well. We may be unable to compete successfully against current and future competitors. In
addition, certain offline competitors may encourage manufacturers to limit or cease distribution of their products to
dealers who sell through online channels such as eBay, or may attempt to use existing or future government
regulation to prohibit or limit online commerce in certain categories of goods or services. The adoption by
manufacturers or government authorities of policies or regulations discouraging the sales of goods or services over
the Internet could force eBay users to stop selling certain products on our websites. Increased competition or anti-
Internet distribution policies or regulations may result in reduced operating margins, loss of market share and
diminished value of our brand. 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 may be controversial with and lead to
dissatisfaction among a number of our sellers, and which could harm our profitability.
Conversely, other companies and government agencies have in the past and may in the future allege that our
actions violate the antitrust or competition laws of the U.S. or other countries, or otherwise constitute unfair
competition. Such claims, even if without foundation, typically are very expensive to defend, involve negative
publicity and diversion of management time and effort, and could result in significant judgments against us.
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