eBay 2012 Annual Report Download - page 14

Item 1A: RISK FACTORS
Risk Factors That May Affect Results of Operations and Financial Condition
Our operations and financial results are subject to various risks and uncertainties that could adversely affect our business, financial
condition, results of operations and cash flows, as well as the trading price of our common stock and debt offerings.
Our operating results have varied on a quarterly basis during our operating history. Our operating results may fluctuate significantly as a
result of a variety of factors, many of which are outside our control. Factors that may affect our operating results include risks described
elsewhere in this section and the following:
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• general economic conditions, including the possibility of a prolonged period of limited economic growth or possible economic
decline in the U.S. and Europe; adverse effects of the ongoing sovereign debt crisis in Europe, including increased Euro currency
exchange rate volatility, the negative impact of the crisis and related austerity measures on European economic growth, potential
negative spillover effects to the rest of the world, the “contagion” risk of the crisis spreading to additional countries in Europe, the
possibility that one or more countries may leave the Euro zone and re-introduce their individual currencies, and, in more extreme
circumstances, the possible dissolution of the Euro currency; the possibility of greater austerity in the U.S. due to, among other
factors, automatic sequesters, failure to raise the “debt ceiling,” or other related actions (or failure to take actions) by the U.S.
Congress and executive branch and, more generally, the impact of uncertainty regarding the fiscal policy of the U.S. government;
disruptions to the credit and financial markets in Europe, the U.S., and elsewhere; contractions or limited growth in consumer
spending or consumer credit; and adverse economic conditions that may be specific to the Internet, ecommerce and payments
industries;
• our ability to manage the rapid shift from online commerce and payments to mobile and multi-
channel commerce and payments;
• our ability to improve the quality of the user experience on our websites and through mobile devices (including our customer support
in the event of a problem) in light of the improved quality generally of the user experience offered by competitive merchants;
• our ability to upgrade and develop our systems (including the migration to GSI's new technology platform and our need to
“replatform” our base PayPal technology), infrastructure and customer service capabilities to accommodate growth and to improve
the functionality and reliability of our websites and services at a reasonable cost while maintaining 24/7 operations;
• the primary and secondary effects of previously announced and possible future changes to our pricing, products and policies,
including, among other changes, restrictions or holds on payments made to certain sellers or in connection with certain transactions;
changes to our dispute resolution process; upgrades to eBay checkout services, including the introduction of an eBay shopping
cart/basket that enables buyers to add items from multiple sellers and pay in a single checkout; changes to our fee structure, including
new requirements to qualify for “eBay Trusted Seller”
discounts; changes to the design, navigation and functionality of the eBay.com
website, including a redesigned homepage, a new “eBay Feed” that allows users to establish a personalized feed of items on their
homepage and the display of larger images and product information; changes to the checkout process, including the ability for users
to connect their eBay and PayPal accounts more easily; and other products and features through which we are increasingly
intermediating more aspects of transactions between buyers and sellers using our platforms;
• our ability to retain an active user base, attract new users, and encourage existing users to list items for sale and purchase items
through our websites and mobile platforms, or use our payment services, especially when consumer spending is weak;
• consumer confidence in the safety and security of transactions using our websites and technology (including through mobile devices)
and the effect of any changes in our practices and policies or of any events on such confidence;
•
our ability to manage the costs of and administer our user protection programs;
• our ability to comply with existing and new laws and regulations as we expand the range and geographical scope of our products and
services and as we grow larger, including those laws and regulations discussed below under the caption “If our Payments business is
found to be subject to or in violation of any laws or regulations, including those governing money transmission, electronic funds
transfers, money laundering, terrorist financing, sanctions, consumer protection, banking and lending, it could be subject to liability,
licensure and regulatory approval and may be forced to change its business practices”;
• new laws or regulations (such as those that may stem from the proposed Anti-Counterfeiting Trade Agreement (ACTA) and Trans-
Pacific Partnership Agreement (TPP), the European Consumer Rights Directive and the proposed