eBay 2013 Annual Report Download - page 46

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portion of the games in a league's season would harm our tickets business. In addition, a portion of the tickets inventory sold by sellers on the
StubHub website is processed by StubHub in digital form. Systems failures, security breaches, theft or other disruptions that result in the loss of
such sellers' tickets inventory could materially 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/Ticketmaster, Comcast
-Spectacor and Tickets.com), event organizers (such as professional sports teams and leagues),
ticket brokers and 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 free transferability (and by extension, the free resale) of such event tickets either to favor their
own resale affiliates or to discourage resale. Similarly, some professional sports teams have begun to introduce measures that may have the
effect of discouraging season ticket holders from listing their tickets for sale through third party platforms (such as the StubHub website) that
compete with the teams' own or preferred secondary ticketing services. Such measures include making PDF versions of tickets available only for
a limited period of time, and imposing fees on season ticket holders to obtain PDF versions of their tickets. PDF versions of tickets are one of the
most popular formats for ticket listings on the StubHub website. As a result, to the extent that such measures result in our customers' inability or
unwillingness to list tickets for sale on the StubHub website, our tickets business would be harmed.
Ticketing service companies have also begun to use market-based pricing strategies or dynamic pricing to charge much higher prices than
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
effectively compete with these competitors, our tickets business would be harmed.
Pursuant to commercial arrangements with certain of its partners, StubHub provides some of its sellers with the ability to conduct
integrated resale transactions, which consumers may prefer due to, among other factors, quicker delivery and lower fraud concerns. These
integrations are largely deal-dependent, and these arrangements may not be renewed on favorable terms, or at all.
Our StubHub business receives funds directly from buyers for tickets purchased from sellers, and subsequently pays the sellers upon
shipment of the tickets. Intermediation of transactions between buyers and sellers could potentially subject StubHub to licensure requirements,
laws and regulatory oversight in certain jurisdictions, which may harm our ticket business.
We depend on key personnel.
Our future performance depends substantially on the continued services of our senior management and other key personnel, including key
engineering and product development personnel, and our ability to attract, retain and motivate key personnel. Competition for key personnel is
intense, especially in the Silicon Valley where our corporate headquarters are located, and we may be unable to successfully attract, integrate, or
retain sufficiently qualified key 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 attract, retain and motivate employees. In addition, we do not have long-term employment agreements with any of
our key personnel and do not maintain any “key person” life insurance policies. Further, 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 senior management or other key
personnel, or our inability to attract key personnel, could harm our business.
44