eBay 2010 Annual Report Download - page 45

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Our tickets business is subject to regulatory, competitive, and other risks that could harm this business.
Our tickets business, which includes our StubHub business, is subject to numerous risks. Many jurisdictions
have laws and regulations covering the resale of event tickets. Some jurisdictions prohibit the resale of event
tickets at prices above the face value of the tickets or at all, or highly regulate the resale of tickets, and new laws
and regulations or changes to existing laws and regulations imposing these or other restrictions may be adopted
that could limit or inhibit our ability to operate, or our users’ ability to continue to use, our tickets business.
Regulatory agencies or courts may claim or hold that we are responsible for ensuring that our users comply with
these laws and regulations or that we or our users are either subject to licensure or prohibited from reselling event
tickets in their jurisdictions.
Some event organizers and professional sports teams have expressed concern about the resale of their event
tickets on our sites. Suits alleging a variety of causes of actions have in the past, and may in the future, be filed
against StubHub and eBay by venue owners, competitors, ticket buyers and unsuccessful ticket buyers. Such
litigation could result in damage awards, could require us to change our business practices in ways that may be
harmful to our business, or could otherwise negatively affect our tickets business.
Our tickets business is subject to seasonal fluctuations and the general economic and business conditions
that impact the sporting events and live entertainment industries. The recent economic downturn has resulted in a
decrease in ticket prices sold on our sites and has negatively impacted revenue and profits. In addition, a work
stoppage, strike or lockout by a professional sports league (for example, the National Football League or the
National Basketball Association) could result in the cancellation of all or a portion of the games in a league’s
season, which would harm our tickets business.
Our tickets business also faces significant competition from a number of sources, including ticketing service
companies (such as Live Nation Entertainment (formerly Ticketmaster), AEG, Comcast-Spectacor and
Tickets.com), event organizers (such as professional sports teams and leagues), ticket brokers, and other online
and offline ticket resellers, such as TicketsNow (which is owned by Live Nation Entertainment) and RazorGator.
In addition, some ticketing service companies and event organizers have begun to issue event tickets through
various forms of electronic ticketing systems that are designed to restrict or prohibit the transferability of such
event tickets. Ticketing service companies have also begun to use market-based pricing strategies or dynamic
pricing to charge much higher prices that they historically have for premium tickets. Besides charging higher
prices, these ticketing service companies have also imposed additional restrictions on transferability for these
types of tickets, such as requiring customers to pick up these tickets at will-call with the purchasing credit card.
To the extent that event tickets issued in this manner cannot be resold on our websites, or to the extent that we
are otherwise unable to compete with these competitors, our tickets business would be harmed.
We depend on key personnel.
Our future performance depends substantially on the continued services of our senior management and other
key personnel and our ability to retain and motivate them. We do not have long-term employment agreements
with any of our key personnel, we do not maintain any “key person” life insurance policies, and some members
of our senior management team have fully vested the vast majority of their in-the-money equity incentives. The
loss of the services of any of our executive officers or other key employees could harm our business. We
currently have a number of vacancies on our senior management team (including President, eBay Marketplaces)
that we are seeking to fill.
Our businesses all depend on attracting and retaining key personnel. Our future success also will depend on
our ability to attract, train, retain and motivate highly skilled technical, managerial, marketing, and customer
support personnel. Competition for these personnel is intense, and we may be unable to successfully attract,
integrate, or retain sufficiently qualified personnel. In making employment decisions, particularly in the Internet
and high-technology industries, job candidates often consider the value of the equity awards they would receive
in connection with their employment. Fluctuations in our stock price may make it more difficult to retain and
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