eBay 2011 Annual Report Download - page 49

Our integrated X.commerce platform, which is open to third-party developers, subjects us to additional risks.
In 2009, we launched the PayPal Developer Platform to enable third-party developers to access a wide variety of PayPal product and
programming code specifications and to connect to select PayPal payment application programming interfaces (APIs). We also began providing a
software tool kit for building mobile payments applications, and enabling third-party developers to access certain APIs with respect to our
Marketplaces platforms. In June 2011, we launched X.commerce, our integrated open commerce platform initiative, which includes our eBay
Developer Program, the PayPal Developer Network and Magento, which provides open source ecommerce platforms and which we acquired in
August 2011. There can be no assurance that third-party developers will develop and maintain applications and services on our open commerce
platforms on a timely basis or at all, and a number of factors could cause such third-party developers to curtail or stop development for our
platforms. In addition, our business is subject to many regulatory restrictions, which may be contravened by such third party applications. If this
were to occur, we could be liable for the regulatory failure and our business could be adversely affected.
There are risks associated with our indebtedness.
At December 31, 2011, we had $2.0 billion in unsecured indebtedness outstanding, as well as $2.5 billion of available borrowing capacity
under our existing commercial paper program and unsecured revolving credit facility (after adjusting for capacity maintained in order to repay
commercial paper borrowings in the event we are unable to repay those borrowings from other sources when they become due). We may incur
additional indebtedness in the future, including under our revolving credit facility or through public or private offerings of debt securities. Our
outstanding indebtedness and any additional indebtedness we incur may have important consequences, including, without limitation, the
following:
Our ability to make payments of principal of and interest on our indebtedness depends upon our future performance, which will be subject to
general economic conditions, industry cycles and financial, business and other factors affecting our consolidated operations, many of which are
beyond our control. If we are unable to generate sufficient cash flow from operations in the future to service our debt, we may be required to,
among other things:
Such measures might not be sufficient to enable us to service our debt. In addition, any such financing, refinancing or sale of assets might
not be available on economically favorable terms or at all.
We depend on the continued growth of online commerce.
The business of selling goods over the Internet and mobile networks, particularly through online trading, is dynamic and relatively new.
Concerns about fraud, privacy and other problems may discourage additional consumers from adopting the Internet or mobile devices as a
medium of commerce. In countries such as the U.S., Germany, Korea and the U.K., where our services and online commerce generally have been
available for some time and the level of market penetration of our services is high, acquiring new users for our services may be more difficult and
costly than it has been in the past. Moreover, the growth rates of Internet users is slowing in many countries where we have a significant presence.
In order to expand our user base, we must appeal to and acquire consumers who historically have used traditional means of commerce to purchase
goods and may prefer Internet analogues to such traditional retail means, such as the retailer's own website, to our offerings. If these consumers
prove to be less active than our earlier users due to lower levels of willingness to use the Internet or mobile devices for commerce for any reason,
including lack of access to high-speed communications equipment, congestion of traffic on the Internet, Internet or mobile network outages or
delays, disruptions or other damage to users' computers or mobile devices, and we are unable to gain efficiencies in our operating costs, including
our cost of acquiring new customers, our business could be adversely impacted.
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•
we will be required to use cash to pay the principal of and interest on our indebtedness;
• our indebtedness and leverage may increase our vulnerability to adverse changes in general economic and industry conditions, as well
as to competitive pressure;
• our ability to obtain additional financing for working capital, capital expenditures, acquisitions and for general corporate and other
purposes may be limited; and
•
our flexibility in planning for, or reacting to, changes in our business and our industry may be limited.
•
seek additional financing in the debt or equity markets;
•
refinance or restructure all or a portion of our indebtedness;
•
sell selected assets;
•
reduce or delay planned capital expenditures; or
•
reduce or delay planned operating expenditures.