eBay 2009 Annual Report Download - page 50

Download and view the complete annual report

Please find page 50 of the 2009 eBay annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 140

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

• providers of traditional payment methods, particularly credit cards, checks, money orders, and
Automated Clearing House transactions;
• issuers of stored value targeted at online payments, including VisaBuxx, NetSpend and GreenDot;
• mobile payments, including Obopay, Amazon Payments, Boku, Crandy, LUUP and Payforit;
• Amazon Payments, which offers online merchants the ability to accept credit card- and bank-funded
payments from Amazon’s base of online customers on the merchant’s own website;
• Google Checkout, which enables the online payment of merchants using credit cards; and
• Payment services targeting users of social networks and online gaming, including Facebook and Hi5
credits, PlaySpan, Zynga and Zong.
Some of these competitors have longer operating histories, significantly greater financial, technical,
marketing, customer service and other resources, greater name recognition, or a larger base of customers in
affiliated businesses than PayPal. PayPal’s competitors may respond to new or emerging technologies and
changes in customer requirements faster and more effectively than PayPal. Some of these competitors may also
be subject to lesser licensing, anti-money laundering, and other regulatory requirements than PayPal, which is
subject to additional regulations based on its licensure as a bank in Luxembourg. They may devote greater
resources to the development, promotion, and sale of products and services than PayPal, and they may offer
lower prices. For example, Google Checkout has offered free payments processing on transactions in an amount
proportionate to certain advertising spending with Google. Competing services tied to established banks and
other financial institutions may offer greater liquidity and engender greater consumer confidence in the safety
and efficacy of their services than PayPal.
Overseas, PayPal faces competition from similar channels and payment methods. In each country, numerous
banks provide standard online credit card acquiring and processing services, and these banks typically have
leading market share. In addition, PayPal faces competition from Visa’s Visa Direct, MasterCard’s MoneySend,
Royal Bank of Scotland’s World Pay, Moneybookers, ClickandBuy and Ukash in the EU, NOCHEX in the
United Kingdom, Sofortüberweisung in Germany, CertaPay and HyperWallet in Canada, Paymate, BPay and
POLI in Australia, Alipay, YeePay and 99 Bill in China and Inicis in South Korea. In addition, in certain
countries, such as Germany and Australia, electronic funds transfer is a leading method of payment for both
online and offline transactions. As in the U.S., established banks and other financial institutions that do not
currently offer online payments could quickly and easily develop such a service.
Some of PayPal’s competitors, such as Wells Fargo, First Data, American Express, and Royal Bank of
Scotland, also provide processing or foreign exchange services to PayPal. If PayPal were to seek to expand the
financial products that it offers, either alone or through a commercial alliance or an acquisition, these processing
and foreign exchange relationships could be negatively affected, or these competitors and other processors could
make it more difficult for PayPal to deliver its services.
Our business may be adversely affected by factors that cause our users to spend less time on our websites,
including seasonal factors, national events and increased usage of other websites.
Anything that diverts our users from their customary level of usage of our websites could adversely affect
our business. We would therefore be adversely affected by geopolitical events such as war, the threat of war, or
terrorist activity, and natural disasters, such as hurricanes or earthquakes. Similarly, our results of operations
historically have been seasonal because many of our users reduce their activities on our websites with the onset
of good weather during the summer months, and on and around national holidays. In addition, increased usage of
social networking or other entertainment websites may decrease the amount of time users spend on our websites,
which could adversely affect our financial results.
42