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As filed with the Securities and Exchange Commission on September 19, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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eBay Inc.
(Exact name of registrant as specified in its charter)
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Delaware 7389 77-0430924
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
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2145 Hamilton Avenue
San Jose, California 95125
(408) 558-7400
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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Michael R. Jacobson
Vice President, Legal Affairs, General Counsel and Secretary
2145 Hamilton Avenue
San Jose, California 95125
(408) 558-7400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
number for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
TITLE OF CLASS OF SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
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Common Stock, par value $0.001 per share 3,889,646 $61.75 $240,185,640.50 $64,409.01
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(1) This registration statement shall cover any additional shares of our
common stock which become issuable by reason of any stock dividend, stock split,
recapitalization or any other similar transaction effected without the receipt
of consideration that results in an increase in the number of shares of our
outstanding common stock.
(2) Estimated solely for the purpose of calculating the registration fee
based on the average of the high and low sales prices of our common stock on the
Nasdaq National Market on September 13, 2000.
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The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment that specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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EXPLANATORY NOTE
This registration statement contains a prospectus relating to a public
offering of an aggregate of 3,889,646 shares of our common stock that are all
owned by former stockholders of Half.com, Inc, a Pennsylvania corporation. We
acquired Half.com in July 2000. The complete prospectus for this offering
follows immediately.
The information in this prospectus is not complete and may be changed.
The selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
SUBJECT TO COMPLETION
(SEPTEMBER 19, 2000)
eBay Inc.
3,889,646 SHARES
COMMON STOCK
THE SELLING STOCKHOLDERS: The selling stockholders identified in this
prospectus are selling 3,889,646 shares of our
common stock. We are not selling any shares of our
common stock under this prospectus and will not
receive any of the proceeds from the sale of shares
by the selling stockholders.
OFFERING PRICE: The selling stockholders may sell the shares
of common stock described in this prospectus in a
number of different ways and at varying prices. We
provide more information about how they may sell
their shares in the section titled "Plan of
Distribution" on page 22.
TRADING MARKET: Our common stock is listed on the Nasdaq
National Market under the symbol "eBAY." On
September 18, 2000, the closing sale price of our
common stock, as reported on the Nasdaq National
Market, was $66.0625.
RISKS: INVESTING IN OUR COMMON STOCK INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON
PAGE 3.
The shares offered or sold under this prospectus have not been approved
by the Securities and Exchange Commission or any state securities commission,
nor have these organizations determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
THE DATE OF THIS PROSPECTUS IS , 2000
eBay(R) and the eBay logo are our registered trademarks. This prospectus
also includes trade dress, trade names and trademarks of other companies. Our
use or display of other parties' trademarks, trade dress or products is not
intended to and does not imply a relationship with the trademark or trade dress
owners.
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PROSPECTUS SUMMARY
The following is a summary of our business. You should carefully read
the section entitled "Risk Factors" in this prospectus, our Annual Report on
Form 10-K for the year ended December 31, 1999 and our Quarterly Reports on
Forms 10-Q for the quarters ended March 31, 2000 and June 30, 2000 for more
information on our business and the risks involved in investing in our stock.
In addition to the historical information contained in this prospectus,
this prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of
1934. These statements may be identified by the use of words such as "expects,"
"anticipates," "intends," "plans" and similar expressions. The outcome of the
events described in these forward-looking statements is subject to risks and
actual results could differ materially. The sections entitled "Risk Factors"
beginning on page 3 of this prospectus, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business" in our
Annual Report and Quarterly Reports contain a discussion of some of the factors
that could contribute to those differences.
eBay Inc.
OVERVIEW
We pioneered online person-to-person trading by developing an
Internet-based community in which buyers and sellers are brought together in an
efficient and entertaining auction format to buy and sell personal items such as
antiques, coins, collectibles, computers, memorabilia, stamps and toys. The eBay
service permits sellers to list items for sale, buyers to bid on items of
interest and all eBay users to browse through listed items in a fully-automated,
topically-arranged, intuitive and easy-to-use online service that is available
24-hours- a-day, seven-days-a-week. We have extended our online offerings with
the acquisitions of alando, an international online person-to-person trading
community, Billpoint, a provider of online billing and payment solutions that is
now a majority owned subsidiary, and most recently with Half.com, a provider of
fixed price person-to-person e-commerce. We have expanded beyond our online
origins into the traditional auction business with our acquisitions of
Butterfield & Butterfield Auctioneers Corporation, d/b/a Butterfields, and
Kruse, Inc. d/b/a Kruse International.
We were formed as a sole proprietorship in September 1995, incorporated
in California in May 1996 and reincorporated in Delaware in April 1998. Our
principal executive offices are located at 2145 Hamilton Avenue, San Jose,
California 95125. Our telephone number is (408) 558-7400, and our website is
located at www.ebay.com. Information contained on our website is not a part of
this prospectus.
ACQUISITION OF HALF.COM
On July 11, 2000, eBay acquired Half.com. Half.com was incorporated in
Pennsylvania in June 1999 and provides a fixed-price person-to-person e-commerce
site allowing people to buy and sell high quality, previously owned goods at a
discount to the original list price. Sellers on the Half.com site can easily
list videos, DVDs, books, compact discs or video games for sale by inputting the
product's bar code (UPC or ISDN code), the product's condition, and the sales
price. Half intends to expand this platform to other categories in the future.
In contrast to eBay, products generally stay listed until sold. If a buyer
selects a seller's item, Half queries the seller to confirm that the item is
still for sale, then charges the buyer for the item plus a standardized shipping
and processing fee and notifies the seller of the sale, requesting that the
merchandise be shipped. Half later remits to the seller the sales price, less
Half's commission (generally 15%) and a shipping allowance. In addition, buyers
may put items which they would like to purchase on a "wish list" in order to
seek potential sellers.
In connection with the merger, eBay issued, or reserved for issuance, a
total of approximately 5,484,000 shares of eBay common stock to Half.com's
existing shareholders, option holders and warrant holders as consideration for
all shares of capital stock and options and warrants of Half.com held
immediately prior to consummation of the merger. The merger will be accounted
for as a pooling of interests.
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RISK FACTORS
RISK FACTORS THAT MAY AFFECT RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The risks and uncertainties described below are not the only ones facing
eBay. Additional risks and uncertainties not presently known to us or that we
currently deem immaterial also may impair our business operations. If any of the
following risks actually occur, our business could be harmed.
We have a limited operating history
Our company was formed as a sole proprietorship in September 1995 and
was incorporated in May 1996. We have only a limited operating history on which
you can base an evaluation of our business and prospects. As an online commerce
company still relatively early in our development, we face substantial risks,
uncertainties, expenses and difficulties. To address these risks and
uncertainties, we and our subsidiaries must do the following:
- maintain and increase our number of registered users, items listed
on our service and completed sales;
- expand into new markets;
- maintain and grow our website and customer support operations at a
reasonable cost;
- continue to make trading through our service safer for users;
- maintain and enhance our brand;
- continue to develop and upgrade our technology and information
processing systems;
- continue to enhance our service to meet the changing requirements of
our users;
- provide superior customer service;
- respond to competitive developments; and
- attract, integrate, retain and motivate qualified personnel.
We may be unable to accomplish one or more of these goals, which could
cause our business to suffer. In addition, accomplishing one or more of these
goals might be very expensive, which could harm our financial results.
Our operating results may fluctuate
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 quarterly operating results include the following:
- our ability to retain an active user base, to attract new users who
list items for sale and who purchase items through our service and
to maintain customer satisfaction;
- our ability to keep our website operational and to manage the number
of items listed on our service;
- the amount and timing of operating costs and capital expenditures
relating to the maintenance and
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expansion of our business, operations and infrastructure;
- foreign, federal, state or local government regulation, including
investigations prompted by items improperly listed or sold by our
users;
- the introduction of new sites, services and products by us or our
competitors;
- volume, size, timing and completion rate of trades on our website;
- consumer confidence in the security of transactions on our website;
- our ability to upgrade and develop our systems and infrastructure to
accommodate growth;
- technical difficulties or service interruptions;
- our ability to attract new personnel in a timely and effective
manner;
- our ability to retain key employees in both our online businesses
and our acquisitions;
- our ability to successfully integrate Half.com, our newest
acquisition;
- the ability of our land-based auction businesses to acquire high
quality properties for auction;
- the timing, cost and availability of advertising in traditional
media and on other websites and online services;
- the timing of marketing and other expenses under existing contracts;
- consumer trends and popularity of some categories of collectible
items;
- the success of our brand building and marketing campaigns;
- the level of use of the Internet and online services;
- increasing consumer acceptance of the Internet and other online
services for commerce and, in particular, the trading of products
such as those listed on our website; and
- general economic conditions and economic conditions specific to the
Internet and e-commerce industries.
Our limited operating history and the emerging nature of the markets in
which we compete make it difficult for us to forecast the level or source of our
revenues or earnings accurately. We believe that period-to-period comparisons of
our operating results may not be meaningful and you should not rely upon them as
an indication of future performance. We do not have backlog, and almost all of
our net revenues each quarter come from transactions for items that are listed
and sold during that quarter. Our operating results in one or more future
quarters may fall below the expectations of securities analysts and investors.
In that event, the trading price of our common stock would almost certainly
decline.
Our failure to manage growth could harm us
We currently are experiencing a period of expansion in our headcount,
facilities and infrastructure, and we anticipate that further expansion will be
required to address potential growth in our customer base and number of
listings, and our expansion into new geographic areas, types of goods and
alternative methods of sale. This expansion has placed, and we expect it will
continue to place, a significant strain on our management, operational and
financial resources. The areas that are put under strain by our growth include
the following:
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- The Websites. We must constantly add new hardware, update software
and add new engineering personnel to accommodate the increased use
of our and our subsidiaries' websites and the new products and
features we are regularly introducing. This has reduced our margins.
If we are unable to increase the capacity of our systems at least as
fast as the growth in demand for this capacity, our websites may
become unstable and may cease to operate for periods of time. We
have experienced periodic unscheduled downtime. Continued
unscheduled downtime would harm our business and also could anger
users of our website and reduce future revenues.
- Customer Support. We must expand our customer support operations to
accommodate the increased number of users and transactions on our
websites. If we are unable to hire and successfully train sufficient
employees or contractors in this area, users of our websites may
have negative experiences, and current and future revenues could
suffer.
- Customer Accounts. Our revenues are dependent on prompt and accurate
billing processes. If we are unable to grow our transaction
processing abilities to accommodate the increasing number of
transactions that must be billed, our ability to collect revenue
will be harmed.
We must continue to hire, train and manage new employees at a rapid
rate. The majority of our employees today have been with us less than one year
and we expect that our rate of hiring will continue at a very high pace. If our
new hires are not good hires, or if we are unsuccessful in training and
integrating these new employees, or if we are not successful in retaining our
existing employees, our business may be harmed. To manage the expected growth of
our operations and personnel, we will need to improve our transaction
processing, operational and financial systems, procedures and controls. Our
current and planned personnel, systems, procedures and controls may not be
adequate to support our future operations. We may be unable to hire, train,
retain and manage required personnel or to identify and take advantage of
existing and potential strategic relationships and market opportunities.
We may not maintain profitability
We believe that our continued profitability will depend in large part on
our ability to do the following:
- maintain sufficient transaction volume to attract buyers and
sellers;
- manage the costs of our business, including the costs associated
with maintaining and developing our website, customer support and
international and product expansion;
- increase our brand name awareness; and
- provide our customers with superior community and trading
experiences.
We are investing heavily in marketing and promotion, customer support,
further development of our website, technology and operating infrastructure
development. The costs of these investments have reduced our margins and are
expected to remain significant into the future. In addition, we have significant
ongoing commitments in some of these areas. As a result, we may be unable to
adjust our spending rapidly enough to compensate for any unexpected revenue
shortfall, which may harm our profitability. The existence of several larger and
more established companies that are rapidly enabling online sales as well as new
companies, many of whom do not charge for transactions on their sites and others
who are facilitating trading through other pricing formats (fixed price, reverse
auction, group buying, etc.) may limit our ability to raise user fees in
response to declines in profitability. In addition, we are spending in advance
of anticipated growth, which may also harm our profitability. In view of the
rapidly evolving nature of our business and our limited operating history, we
believe that period-to-period comparisons of our operating results are not
necessarily meaningful. You should not rely upon our historical results as
indications of our future performance.
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Acquisitions could result in dilution, operating difficulties and other harmful
consequences
We have acquired a number of businesses, including our recent
acquisition of Half.com, and may in the future acquire businesses, technologies,
services or products that we believe are strategic. The process of integrating
any acquisition may create unforeseen operating difficulties and expenditures
and is itself risky. The areas where we may face difficulties include:
- diversion of management time (at both companies) during the period
of negotiation through closing and further diversion of such time
after closing from focus on operating the businesses to issues of
integration and future products;
- decline in employee morale and retention issues resulting from
changes in compensation, reporting relationships, future prospects,
or the direction of the business;
- the need to integrate each company's accounting, management
information, human resource and other administrative systems to
permit effective management and the lack of control if such
integration is delayed or not implemented; and
- the need to implement controls, procedures and policies appropriate
for a larger public company at companies that prior to acquisition
had been smaller, private companies.
Prior to the four large acquisitions we made in 1999, we had almost no
experience in managing this integration process. Most of our acquisitions to
date have involved either family-run companies or very early stage companies,
which may worsen these integration issues. Moreover, the anticipated benefits of
any or all of these acquisitions may not be realized. Future acquisitions or
mergers could result in potentially dilutive issuances of equity securities, the
incurrence of debt, contingent liabilities or amortization expenses related to
goodwill and other intangible assets, any of which could harm our business.
Future acquisitions or mergers may require us to obtain additional equity or
debt financing, which may not be available on favorable terms or at all. Even if
available, this financing may be dilutive.
Unauthorized break-ins or other assaults on our service could harm our business
Our servers are vulnerable to computer viruses, physical or electronic
break-ins and similar disruptions, which could lead to interruptions, delays,
loss of data or the inability to complete customer transactions. In addition,
unauthorized persons may improperly access our data. We have experienced an
unauthorized break-in by a "hacker" who has stated that he can in the future
damage or change our system or take confidential information. We have also
experienced "denial of service" type attacks on our system which have made all
or portions of our website unavailable for periods of time. These and other
types of attacks could harm us. Actions of this sort may be very expensive to
remedy and could damage our reputation and discourage new and existing users
from using our service.
Our business may be harmed by the listing or sale by our users of illegal items
The law relating to the liability of providers of online services for
the activities of their users on their service is currently unsettled. We are
aware that certain goods, such as firearms, other weapons, adult material,
tobacco products, alcohol and other goods that may be subject to regulation by
local, state or federal authorities, have been listed and traded on our service.
We may be unable to prevent the sale of unlawful goods, or the sale of goods in
an unlawful manner, by users of our service, and we may be subject to
allegations of civil or criminal liability for unlawful activities carried out
by users through our service. Several lawsuits based upon such allegations are
currently pending. See "We are subject to intellectual property and other
litigation." In order to reduce our exposure to this liability, we have
prohibited the listing of certain items and increased the number of personnel
reviewing questionable items. We may in the future implement other protective
measures that could require us to spend substantial resources and/or to reduce
revenues by discontinuing certain service offerings. Any costs incurred as a
result of liability or asserted liability relating to the sale of unlawful goods
or the unlawful sale of goods, could harm our business. In addition, we have
received significant and continuing media attention relating to the listing or
sale of unlawful goods on our website. This negative publicity could damage our
reputation and diminish the value
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of our brand name. It also could make users reluctant to continue to use our
services.
Our business may be harmed by the listing or sale by our users of pirated items
We have received in the past, and we anticipate we will receive in the
future, communications alleging that certain items listed or sold through our
service by our users infringe third-party copyrights, trademarks and tradenames
or other intellectual property rights. Although we have actively sought to work
with the content community to eliminate infringing listings on our website, some
content owners have expressed the view that our efforts are insufficient.
Content owners have been active in defending their rights against online
companies. An allegation of infringement of third-party intellectual property
rights may result in litigation against us. Any such litigation could be costly
for us, could result in increased costs of doing business through adverse
judgment or settlement, could require us to change our business practices in
expensive ways, or could otherwise harm our business. Litigation against other
online companies could result in interpretations of the law that could also
require us to change our business practices or otherwise increase our costs. See
"We are subject to intellectual property and other litigation."
Our business may be harmed by fraudulent activities on our website
Our future success will depend largely upon sellers reliably delivering
and accurately representing their listed goods and buyers paying the agreed
purchase price. We have received in the past, and anticipate that we will
receive in the future, communications from users who did not receive the
purchase price or the goods that were to have been exchanged. In some cases
individuals have been arrested and convicted for fraudulent activities using our
website. While we can suspend the accounts of users who fail to fulfill their
delivery obligations to other users, we do not have the ability to require users
to make payments or deliver goods or otherwise make users whole other than
through our limited insurance program. Other than through this program, we do
not compensate users who believe they have been defrauded by other users. We
also periodically receive complaints from buyers as to the quality of the goods
purchased. Negative publicity generated as a result of fraudulent or deceptive
conduct by users of our service could damage our reputation and diminish the
value of our brand name. We expect to continue to receive requests from users
requesting reimbursement or threatening or commencing legal action against us if
no reimbursement is made. This sort of litigation could be costly for us, divert
management attention, result in increased costs of doing business, lead to
adverse judgments or could otherwise harm our business.
Government inquiries may lead to charges or penalties
On January 29, 1999, we received initial requests to produce certain
records and information to the federal government relating to an investigation
of possible illegal transactions in connection with our website. We were
informed that the inquiry includes an examination of our practices with respect
to these transactions. We have provided further information in connection with
this ongoing inquiry. In order to protect the investigation, the court has
ordered that no further public disclosures be made with respect to the matter.
On March 24, 2000, Butterfields received a grand jury subpoena from the
Antitrust Division of the Department of Justice requesting documents relating
to, among other things, changes in Butterfields' seller commissions and buyer
premiums and discussions, agreements or understandings with other auction
houses, in each case since 1992. We believe this request may be related to a
publicly reported criminal investigation of auction houses for price fixing. We
have provided the information requested in the subpoena.
Should these or any other investigations lead to civil or criminal
charges against us, we would likely be harmed by negative publicity, the costs
of litigation, the diversion of management time and other negative effects, even
if we ultimately prevail. Our business would certainly suffer if we were not to
prevail in any actions like these. Even the process of providing records and
information can be expensive, time consuming and result in the diversion of
management attention.
A large number of transactions occur on our website. We believe that
government regulators have received a substantial number of consumer complaints
about us which, while small as a percentage of our total transactions, are large
in aggregate numbers. As a result, we have from time to time been contacted by
various federal, state and local
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regulatory agencies and been told that they have questions with respect to the
adequacy of the steps we take to protect our users from fraud. We are likely to
receive additional inquiries from regulatory agencies in the future, which may
lead to action against us. We have responded to all inquiries from regulatory
agencies by describing our current and planned antifraud efforts. If one or more
of these agencies is not satisfied with our response to current or future
inquiries, the resultant investigations and potential fines or other penalties
could harm our business.
We have provided information to the antitrust division of the Department
of Justice in connection with an inquiry into our conduct with respect to
"auction aggregators" including our licensing program and our lawsuit against
Bidder's Edge. Should the division decide to take action against us, we would
likely be harmed by negative publicity, the costs of the action, possible
private antitrust lawsuits, the diversion of management time and effort and
penalties we might suffer if we ultimately were not to prevail.
Some of our businesses are subject to regulation and others may be in the future
Both Butterfields and Kruse are subject to regulation in some
jurisdictions governing the manner in which live auctions are conducted. Both
are required to obtain licenses in these jurisdictions with respect to their
business or to permit the sale of categories of items (e.g. wine, automobiles,
and real estate). These licenses generally must be renewed regularly and are
subject to revocation for violation of law, violation of the regulations
governing auctions in general or the sale of the particular item and other
events. If either company was unable to renew a license or had a license
revoked, its business would be harmed. In addition, changes to the regulations
or the licensure requirements could increase the complexity and the cost of
doing auctions, thereby harming us.
As our activities and the types of goods listed on our site expand,
state regulatory agencies may claim that we are subject to licensure in their
jurisdiction. These claims could result in costly litigation or could require us
to change our manner of doing business in ways that increase our costs or reduce
our revenues or force us to prohibit listings of certain items. We could also be
subject to fines or other penalties. Any of these outcomes could harm our
business.
As we have expanded internationally, we have become subject to new
regulations, including regulations on the transmission of personal information.
These laws may require costly changes to our business practices. If we are found
to have violated any of these laws, we could be subject to fines or penalties
and our business could be harmed.
Companies that handle payments, including our subsidiaries Billpoint and
Half.com, may be subject to additional regulation
The Half.com business model involves the handling of payments by buyers
for the items listed by Half.com's sellers. Billpoint handles its customer funds
as a provider of Internet payment solutions. Businesses that handle consumers'
funds are subject to numerous regulations, including those related to banking,
credit cards, escrow, fair credit reporting and others. Billpoint is a new
business with a relatively novel approach to facilitating payments. It is not
yet known how regulatory agencies will treat Billpoint. The cost and complexity
of Billpoint's business may increase if certain regulations are deemed to apply
to its business. In addition to the need to comply with these regulations,
Billpoint's business is also subject to risks of fraud, the need to grow systems
and processes rapidly if its products are well received, a high level of
competition, including competitors who are currently not charging for their
product offerings and are offering significant promotional incentives, and the
need to coordinate systems and policies among itself, us and Wells Fargo Bank,
which is the provider of payment services. Similarly, Half.com may be subject to
certain regulations regarding payments and the cost and complexity of its
business may increase if these regulations are deemed to apply to its business.
We are subject to risks associated with information disseminated through our
service
The law relating to the liability of online services companies for
information carried on or disseminated through their services is currently
unsettled. Claims could be made against online services companies under both
United States and foreign law for defamation, libel, invasion of privacy,
negligence, copyright or trademark infringement, or other theories based on the
nature and content of the materials disseminated through their services. Several
private lawsuits seeking to impose liability upon us currently are pending. In
addition, federal, state and foreign legislation
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has been proposed that imposes liability for or prohibits the transmission over
the Internet of certain types of information. Our service features a Feedback
Forum, which includes information from users regarding other users. Although all
such feedback is generated by users and not by us, it is possible that a claim
of defamation or other injury could be made against us for content posted in the
Feedback Forum. Claims like these become more likely and have a higher
probability of success in jurisdictions outside the U.S. If we become liable for
information provided by our users and carried on our service, we could be
directly harmed and we may be forced to implement new measures to reduce our
exposure to this liability. This may require us to expend substantial resources
and/or to discontinue certain service offerings, which would negatively affect
our financial results. In addition, the increased attention focused upon
liability issues as a result of these lawsuits and legislative proposals could
harm our reputation or otherwise impact the growth of our business. We carry
liability insurance, but it may not be adequate to compensate us if we become
liable for information carried on or through our service. Any costs incurred as
a result of this liability or asserted liability could harm our business.
We are subject to intellectual property and other litigation
On September 1, 1999, we were served with a lawsuit filed by Randall
Stoner, on behalf of the general public, in San Francisco Superior Court (No.
305666). The lawsuit alleges that we violated Section 17200 of the California
Business & Professions Code, a statute that relates to unfair competition, based
upon the listing of "bootleg" or "pirate" recordings by eBay's users, allegedly
in violation of California penal statutes relating to the sale of unauthorized
audio recordings. The lawsuit seeks declaratory and injunctive relief,
restitution and legal fees. We filed a general demurrer which was sustained by
the court with leave to amend. The plaintiff filed an amended complaint.
Discovery has commenced. We have filed a motion for summary judgement. We
believe we have meritorious defenses to this lawsuit and intend to defend
ourselves vigorously. However, even if successful, this defense would be costly
and, if eBay were to lose this lawsuit, our business would be harmed.
On December 10, 1999, we sued Bidder's Edge, Inc. in the United States
District Court for the Northern District of California alleging trespass, unfair
competition, violation of the computer fraud and abuse act, misappropriation,
false advertising, trademark dilution, injury to business reputation,
interference with prospective economic advantage, and unjust enrichment. On
February 7, 2000, Bidder's Edge denied these claims and counterclaimed against
us alleging that we violated the antitrust laws by monopolizing or attempting to
monopolize a market, we are competing unfairly, and that we interfered with
their contract with eBay magazine. Bidder's Edge is seeking treble damages, an
injunction and its fees and costs. Discovery in this case has commenced. A
motion to dismiss on the antitrust counterclaim has been denied. On May 24,
2000, the court granted us a preliminary injunction against the use by Bidder's
Edge of robotic means to copy our site. Bidder's Edge has appealed this ruling.
We intend to prosecute our claims and defend ourselves against Bidder's Edge's
counterclaims vigorously. However, this lawsuit has been and is expected to
continue to be costly and our business would be harmed if we were to lose.
On April 25, 2000 eBay was served with a lawsuit, Gentry et.al. v. eBay,
Inc. et.al, filed in Superior Court in San Diego, California. The lawsuit is
filed on behalf of a purported class of eBay users who purchased forged
autographed sports memorabilia on eBay. The lawsuit claims eBay was negligent in
permitting certain named (and other unnamed) defendants to sell allegedly forged
autographed sports memorabilia on eBay. In addition, the lawsuit claims eBay
violated Section 17200 and a section of the California Civil Code which
prohibits "dealers" from selling sports memorabilia without a "Certificate of
Authenticity". The lawsuit seeks class action certification, compensatory
damages, a civil penalty of ten times actual damages, interest, costs and fees
and injunctive relief. Discovery in this case has commenced. We believe we have
meritorious defenses to this lawsuit and intend to defend ourselves vigorously.
However, even if successful, this defense has been and is expected to be costly.
If we lose this lawsuit, it would harm our business.
Other third parties have from time to time claimed and may claim in the
future that we have infringed their past, current or future technologies. We
expect that participants in our markets increasingly will be subject to
infringement claims as the number of services and competitors in our industry
segment grows. Any claim like this, whether meritorious or not, could be
time-consuming, result in costly litigation, cause service upgrade delays or
require us to enter into royalty or licensing agreements. These royalty or
licensing agreements might not be available on acceptable terms or at all. As a
result, any claim like this could harm our business.
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From time to time, eBay is involved in disputes that have arisen in the
ordinary course of business. Management believes that the ultimate resolution of
these disputes will not have a material adverse impact on eBay's financial
position or results of operations.
The inability to expand our systems may limit our growth
We seek to generate a high volume of traffic and transactions on our
service. The satisfactory performance, reliability and availability of our
websites, processing systems and network infrastructure are critical to our
reputation and our ability to attract and retain large numbers of users. Our
revenues depend primarily on the number of items listed by users, the volume of
user transactions that are successfully completed and the final prices paid for
the items listed. We need to expand and upgrade our technology, transaction
processing systems and network infrastructure both to meet increased traffic on
our site and to implement new features and functions, including those required
under our contracts with third parties. We may be unable to accurately project
the rate or timing of increases, if any, in the use of our service or to expand
and upgrade our systems and infrastructure to accommodate any increases in a
timely fashion.
We use internally developed systems to operate our service for
transaction processing, including billing and collections processing. We must
continually improve these systems in order to accommodate the level of use of
our website. In addition, we may add new features and functionality to our
services that would result in the need to develop or license additional
technologies. We capitalize hardware and software costs associated with this
development in accordance with generally accepted accounting principles and
include such amounts in computer equipment and software. Our inability to add
additional software and hardware or to upgrade our technology, transaction
processing systems or network infrastructure to accommodate increased traffic or
transaction volume could have adverse consequences. These consequences include
unanticipated system disruptions, slower response times, degradation in levels
of customer support, impaired quality of the users' experience of our service
and delays in reporting accurate financial information. Our failure to provide
new features or functionality also could result in these consequences. We may be
unable to effectively upgrade and expand our systems in a timely manner or to
integrate smoothly any newly developed or purchased technologies with our
existing systems. These difficulties could harm or limit our ability to expand
our business.
System failures could harm our business
We have experienced system failures from time to time. Our website has
been interrupted for periods of up to 22 hours. In addition to placing increased
burdens on our engineering staff, these outages create a flood of user questions
and complaints that need to be responded to by our customer support personnel.
Any unscheduled interruption in our service results in an immediate loss of
revenues that can be substantial and may cause some users to switch to our
competitors. If we experience frequent or persistent system failures, our
reputation and brand could be permanently harmed. We have been taking steps to
increase the reliability and redundancy of our system. These steps are
expensive, reduce our margins and may not be successful in reducing the
frequency or duration of unscheduled downtime.
Substantially all of our computer hardware for operating our services
(other than Half.com) currently is located at the facilities of Exodus
Communications, Inc. in Santa Clara, California and AboveNet Communications in
San Jose, California. The computer hardware for the Half.com service is located
in the facilities of Level 3 Communications in Philadelphia, Pennsylvania. These
systems and operations are vulnerable to damage or interruption from
earthquakes, floods, fires, power loss, telecommunication failures and similar
events. They are also subject to break-ins, sabotage, intentional acts of
vandalism and similar misconduct. We do not maintain fully redundant systems or
alternative providers of hosting services, and we do not carry business
interruption insurance sufficient to compensate us for losses that may occur.
Despite any precautions we may take, the occurrence of a natural disaster or
other unanticipated problems at any of the Exodus, AboveNet or Level 3
facilities could result in interruptions in our services. In addition, the
failure by Exodus or AboveNet to provide our required data communications
capacity could result in interruptions in our service. Any damage to or failure
of our systems could result in interruptions in our service. Interruptions in
our service will reduce our revenues and profits, and our future revenues and
profits will be harmed if our users believe that our system is unreliable.
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Our stock price has been and may continue to be extremely volatile
The trading price of our common stock has been and is likely to be
extremely volatile. Our stock price could be subject to wide fluctuations in
response to a variety of factors, including the following:
- actual or anticipated variations in our quarterly operating results;
- unscheduled system downtime;
- additions or departures of key personnel;
- announcements of technological innovations or new services by us or
our competitors;
- changes in financial estimates by securities analysts;
- conditions or trends in the Internet and online commerce industries;
- changes in the market valuations of other Internet or online service
companies;
- developments in Internet regulation;
- announcements by us or our competitors of significant acquisitions,
strategic partnerships, joint ventures or capital commitments;
- sales of our common stock or other securities in the open market;
and
- other events or factors that may be beyond our control.
In addition, the trading price of Internet stocks in general, and ours
in particular, have experienced extreme price and volume fluctuations in recent
months. These fluctuations often have been unrelated or disproportionate to the
operating performance of these companies. The valuations of many Internet
stocks, including ours, are extraordinarily high based on conventional valuation
standards such as price-to-earnings and price-to-sales ratios. The trading price
of our common stock has increased enormously from the initial public offering
price. These trading prices and valuations may not be sustained. Any negative
change in the public's perception of the prospects of Internet or e-commerce
companies could depress our stock price regardless of our results. Other broad
market and industry factors may decrease the market price of our common stock,
regardless of our operating performance. Market fluctuations, as well as general
political and economic conditions, such as recession or interest rate or
currency rate fluctuations, also may decrease the market price of our common
stock. In the past, following declines in the market price of a company's
securities, securities class-action litigation often has been instituted.
Litigation of this type, if instituted, could result in substantial costs and a
diversion of management's attention and resources.
New and existing regulations could harm our business
We are subject to the same federal, state and local laws as other
companies conducting business on the Internet. Today there are relatively few
laws specifically directed towards online services. However, due to the
increasing popularity and use of the Internet and online services, many laws
relating to the Internet are being debated at the state and federal levels (both
in the U.S. and abroad) and it is possible that laws and regulations will be
adopted with respect to the Internet or online services. These laws and
regulations could cover issues such as online contracts, user privacy, freedom
of expression, pricing, fraud, content and quality of products and services,
taxation, advertising, intellectual property rights and information security.
Applicability to the Internet of existing laws governing issues such as property
ownership, copyrights and other intellectual property issues, taxation, libel,
obscenity and personal privacy is uncertain. The vast majority of these laws
were adopted prior to the advent of the Internet and related technologies and,
as a result, do not contemplate or address the unique issues of the Internet and
related
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technologies. Those laws that do reference the Internet, such as the Digital
Millennium Copyright Act, have not yet been interpreted to a significant degree
by the courts and their applicability and reach are therefore uncertain. In
addition, numerous states, including the State of California, where our
headquarters are located, have regulations regarding how "auctions" may be
conducted and the liability of "auctioneers" in conducting such auctions. No
final legal determination has been made with respect to the applicability of the
California regulations to our business to date and little precedent exists in
this area. Several states are considering imposing these regulations upon us or
our users, which could harm our business. In addition, as the nature of the
products listed by our users change, we may become subject to new regulatory
restrictions.
Several states have proposed legislation that would limit the uses of
personal user information gathered online or require online services to
establish privacy policies. The Federal Trade Commission also has recently
settled several proceedings regarding the manner in which personal information
is collected from users and provided to third parties. Changes to existing laws
or the passage of new laws intended to address these issues could directly
affect the way we do business or could create uncertainty in the marketplace.
This could reduce demand for our services, increase the cost of doing business
as a result of litigation costs or increased service delivery costs, or
otherwise harm our business. In addition, because our services are accessible
worldwide, and we facilitate sales of goods to users worldwide, foreign
jurisdictions may claim that we are required to comply with their laws. For
example, a French court has recently ruled that a U.S. website must comply with
French laws regarding content. As we have expanded our international activities,
we have become obligated to comply with the laws of the countries in which we
operate. Laws regulating Internet companies outside of the United States may be
less favorable then those in the United States, giving greater rights to
consumers, content owners and users. Compliance may be more costly or may
require us to change our business practices or restrict our service offerings
relative to those in the United States. Our failure to comply with foreign laws
could subject us to penalties ranging from fines to bans on our ability to offer
our services.
Our business has been seasonal
Our results of operations historically have been somewhat seasonal in
nature because many of our users reduce their activities on our website during
the Thanksgiving and Christmas holidays and with the onset of good weather. We
have historically experienced our strongest quarter of online growth our first
fiscal quarter. Both Butterfields and Kruse have significant quarter-to-quarter
variations in their results of operations depending on the timing of auctions
and the availability of high quality items from large collections and estates.
Butterfields typically has its best operating results in the traditional fall
and spring auction seasons and has historically incurred operating losses in the
first and third quarters. Kruse typically sees a seasonal peak in operations in
the third quarter. Seasonal or cyclical variations in our business may become
more pronounced over time and may harm our results of operations in the future.
We are dependent on the continued growth of online commerce
The business of selling goods over the Internet, particularly through
personal trading, is new and dynamic. Our future net revenues and profits will
be substantially dependent upon the widespread acceptance of the Internet and
online services as a medium for commerce by consumers. Rapid growth in the use
of and interest in the Internet and online services is a recent phenomenon. This
acceptance and use may not continue. Even if the Internet is accepted, concerns
about fraud, privacy and other problems may mean that a sufficiently broad base
of consumers will not adopt the Internet as a medium of commerce. In particular,
our website requires users to make publicly available their e-mail addresses and
other personal information that some potential users may be unwilling to
provide. These concerns may increase as additional publicity over privacy issues
on eBay or generally over the Internet increase. Market acceptance for recently
introduced services and products over the Internet is highly uncertain, and
there are few proven services and products. 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. If these consumers prove to be less active
than our earlier users, and we are unable to gain efficiencies in our operating
costs, including our cost of acquiring new customers, our business could be
adversely impacted.
There are many risks associated with our international operations
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We are expanding internationally. In 1999, we acquired alando, a leading
online German personal trading platform, and began operations in the United
Kingdom and, through a joint venture, in Australia. In the first quarter of
2000, we further expanded into Japan and formally launched our localized
Canadian operations. Expansion into international markets will require
management attention and resources. We have limited experience in localizing our
service to conform to local cultures, standards and policies. In most countries,
we will have to compete with local companies who understand the local market
better than we do. We may not be successful in expanding into international
markets or in generating revenues from foreign operations. Even if we are
successful, the costs of operating are expected to exceed our net revenues for
at least 12 months in most countries. As we continue to expand internationally,
we are subject to risks of doing business internationally, including the
following:
- regulatory requirements, including regulation of "auctions," that
may limit or prevent the offering of our services in local
jurisdictions, may prevent enforceable agreements between sellers
and buyers, or may prohibit certain categories of goods;
- legal uncertainty regarding liability for the listings of our users,
including less Internet-friendly legal systems and unique local
laws;
- government-imposed limitations on the public's access to the
Internet;
- difficulties in staffing and managing foreign operations;
- longer payment cycles, different accounting practices and problems
in collecting accounts receivable;
- higher telecommunications and Internet service provider costs;
- more stringent consumer protection laws;
- cultural nonacceptance of online trading;
- stronger local competitors;
- seasonal reductions in business activity; and
- potentially adverse tax consequences.
Some of these factors may cause our international costs to exceed our
domestic costs of doing business. To the extent we expand our international
operations and have additional portions of our international revenues
denominated in foreign currencies, we also could become subject to increased
difficulties in collecting accounts receivable and risks relating to foreign
currency exchange rate fluctuations.
Our business may be subject to sales and other taxes
We do not collect sales or other similar taxes on goods sold by users
through our service. One or more states may seek to impose sales tax collection
obligations on companies such as ours that engage in or facilitate online
commerce. Several proposals have been made at the state and local level that
would impose additional taxes on the sale of goods and services through the
Internet. These proposals, if adopted, could substantially impair the growth of
e-commerce, and could diminish our opportunity to derive financial benefit from
our activities. In 1998, the U.S. federal government enacted legislation
prohibiting states or other local authorities from imposing new taxes on
Internet commerce for a period of three years. This tax moratorium will last
only for a limited period and does not prohibit states or the Internal Revenue
Service from collecting taxes on our income, if any, or from collecting taxes
that are due under existing tax rules. A successful assertion by one or more
states or any foreign country that we should collect sales or other taxes on the
exchange of merchandise on our system would harm our business.
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We are dependent on key personnel
Our future performance will be substantially dependent on the continued
services of our senior management and other key personnel. Our future
performance also will depend on our ability to retain and motivate our other
officers and key employees. The loss of the services of any of our executive
officers or other key employees could harm our business. We do not have
long-term employment agreements with any of our key personnel, and we do not
maintain any "key person" life insurance policies. Our new businesses are all
dependent on attracting and retaining key employees. The land-based auction
businesses are particularly dependent on specialists and senior management
because of the relationships these individuals have established with sellers who
consign property for sale at auction. For example, Dean Kruse is particularly
important to Kruse. We have had some turnover of these types of personnel, and
continued losses could result in the loss of significant future business and
would harm us. Such personnel are in great demand by other online companies. In
addition, employee turnover frequently increases during the period following an
acquisition as employees evaluate possible changes in compensation, culture,
reporting relationships, and the direction of the business. Such increased
turnover could increase our costs and reduce our future revenues. 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, especially for engineers and other
professionals, especially in the San Francisco Bay Area, 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 stock options they
are to receive in connection with their employment. Fluctuations in our stock
price may make it more difficult to retain and motivate employees whose stock
option strike prices are substantially above current market prices.
Our off-line auction businesses need to continue to acquire properties
The businesses of Butterfields and Kruse are both dependent on the
continued acquisition of high quality auction properties from sellers. Their
future success will depend in part on their ability to maintain an adequate
supply of high quality auction property, particularly fine and decorative arts
and collectibles and collectible automobiles, respectively. There is intense
competition for these pieces with other auction companies and dealers. In
addition, a small number of key senior management and specialists maintain the
relationships with the primary sources of auction property and the loss of any
of these individuals could harm the business of Butterfields and Kruse.
Our off-line auction businesses could suffer losses from price guarantees,
advances or rescissions of sales
In order to secure high quality auction properties from sellers,
Butterfields and Kruse may give a guaranteed minimum price or a cash advance to
a seller, based on the estimated value of the property. If the auction proceeds
are less than the amount guaranteed, or less than the amount advanced and the
seller does not repay the difference, the company involved will suffer a loss.
In addition, under certain circumstances a buyer who believes that an item
purchased at auction does not have good title, provenance or authenticity may
rescind the purchase. Under these circumstances, the company involved will lose
its commissions and fees on the sale even if the seller, in accordance with the
terms and conditions of sale, in turn accepts back the item and returns the
funds he or she received from the sale.
We acquired real property with some of our new businesses
In connection with the acquisitions of Kruse and Butterfields we
acquired real property including land, buildings and interests in partnerships
holding land and buildings. We have no experience in managing real property.
Ownership of this property subjects us to new risks, including:
- the possibility of environmental contamination and the costs
associated with fixing any environmental problems;
- adverse changes in the value of these properties, due to interest
rate changes, changes in the neighborhoods in which the properties
are located, or other factors;
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- the possible need for structural improvements in order to comply
with zoning, seismic, disability act or other requirements; and
- possible disputes with tenants, partners or others.
Our market is intensely competitive
Depending on the category of product, eBay currently or potentially
competes with a number of companies serving particular categories of goods as
well as those serving broader ranges of goods. The online personal trading
market is a new, rapidly evolving and intensely competitive area. We expect
competition to intensify in the future as the barriers to entry are relatively
low, and current and new competitors can launch new sites at a nominal cost
using commercially available software. Our broad-based competitors include the
vast majority of traditional department and general merchandise stores as well
as emerging online retailers. These include most prominently: Wal-Mart, Kmart,
Target, Sears, Macy's, JC Penney, Montgomery Ward, Costco, Sam's Club as well as
Amazon.com, Buy.com, AOL.com, Yahoo! shopping and MSN.
In addition, eBay faces competition from specialty retailers and
exchanges in each of its categories of products. For example:
Antiques: Christies, eHammer, Sotheby's / Sothebys.com,
Sothebys.amazon.com
Coins & Stamps: Collectors Universe, Heritage, Numismatists Online, US
Mint
Collectibles: Franklin Mint
Musical Instruments: Guitar Center, Harmony-Central.com, MARRS,
MusicHotBid.com
Sports Memorabilia: Beckett's, Collectors Universe Toys, Bean Bag Plush:
Amazon.com, eToys.com, KB Toys
Premium Collectibles: Christies, DuPont Registry, Gavelnet, Greg Manning
Auctions, iCollector, Lycos / Skinner Auctions, Millionaire.com, Phillips
(LVMH), Sotheby's, Sothebys.amazon.com
Automotive (used cars): Auction Auto.com, Autobytel.com, AutoMallUSA,
AutoVantage.com, AutoWeb.com, Barrett-Jackson, CarOrder.com, CarPoint,
CarScene.com, eClassics.com, Edmunds, GreenLight.com, Hemmings, Newspaper
classifieds, Used car dealers
Books, Movies, Music: Amazon.com, Barnes & Noble, Barnesandnoble.com,
BigStar, Blockbuster, BMG Columbia House, CDNow, DVD Express, Spinner.com,
Wherehouse, Alibris.com, Bookfinders.com
Clothing: Bluefly.com, Dockers.com, FashionMall.com, The Gap, J. Crew,
LandsEnd.com, The Limited, lucy.com, Macys, The Men's Wearhouse, Ross,
3Dshopping.com
Computers & Consumer Electronics: Best Buy, Buy.com, Circuit City,
Compaq, CompUSA, Dell, Egghead, Fry's Electronics, Gateway, The Good Guys, IBM,
MicroWarehouse, The Sharper Image, Shopping.com
Home & Garden: IKEA, Crate & Barrel, Homepoint.com, Home Depot,
Garden.com, Pottery Barn, Ethan Allen, Frontgate
Jewelry: Ashford.com, Mondera.com
Sporting Goods/Equipment: dsports.com, FogDog.com, Footlocker, Gear.com,
golfclubexchange, golftrader.com, MVP.com, PlanetOutdoors.com, Play It Again
Sports, REI, Sports Authority
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Tool/Equipment/Hardware: Home Depot, HomeBase, Amazon.com, Ace Hardware,
OSH
Business-to-Business: Ariba, BidFreight.com, BizBuyer.com, bLiquid.com,
CloseOutNow.com, CommerceBid.com, Commerce One, Concur Technologies, DoveBid,
FreeMarkets, iMark, Oracle, PurchasePro.com, RicardoBiz.com, Sabre,
SurplusBin.com, UnionStreet.com, Ventro, VerticalNet
Additionally, we face competition from various online auction sites
including: Amazon.com, the Fairmarket Auction Network (an auction network
including Microsoft's MSN, Excite@Home, Dell Computer, ZD Net, Lycos and more
than 100 others), First Auction, Surplus Auction, uBid, Yahoo! Auctions and a
large number of other companies using an auction format for consumer-to-consumer
or business-to-consumer sales.
The principal competitive factors in our market include the following:
- ability to attract buyers;
- volume of transactions and selection of goods;
- customer service; and
- brand recognition.
With respect to our online competition, additional competitive factors
are:
- community cohesion and interaction;
- system reliability;
- reliability of delivery and payment;
- website convenience and accessibility;
- level of service fees; and
- quality of search tools.
Some current and potential competitors have longer company operating
histories, larger customer bases and greater brand recognition in other business
and Internet markets than we do. Some of these competitors also have
significantly greater financial, marketing, technical and other resources. Other
online trading services may be acquired by, receive investments from or enter
into other commercial relationships with larger, well-established and
well-financed companies. As a result, some of our competitors with other revenue
sources may be able to devote more resources to marketing and promotional
campaigns, adopt more aggressive pricing policies and devote substantially more
resources to website and systems development than we are able to. Increased
competition may result in reduced operating margins, loss of market share and
diminished value of our brand. Some of our competitors have offered services for
free, and others may do this as well. We may be unable to compete successfully
against current and future competitors.
In order to respond to changes in the competitive environment, we may,
from time to time, make pricing, service or marketing decisions or acquisitions
that could harm our business. For example, we implemented an insurance program
that generally insures items up to a value of $200, with a $25 deductible, for
users with a non-negative feedback rating at no cost to the user. New
technologies may increase the competitive pressures by enabling our competitors
to offer a lower cost service. Some Internet-based applications that direct
Internet traffic to certain websites may channel users to trading services that
compete with us.
Although we have established Internet traffic arrangements with several
large online services and search engine
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companies, these arrangements may not be renewed on commercially reasonable
terms. Even if these arrangements are renewed, they may not result in increased
usage of our service. In addition, companies that control access to transactions
through network access or Internet browsers could promote our competitors or
charge us substantial fees for inclusion.
The off-line auction business is intensely competitive. Butterfields
competes with two larger and better known auction companies, Sotheby's Holdings,
Inc. and Christie's International plc, as well as numerous regional auction
companies. To the extent that these companies increase their focus on the middle
market properties that form the core of Butterfields' business, its business may
suffer. Kruse is subject to competition from numerous regional competitors. In
addition, competition with Internet-based auctions may harm the land-based
auction business. Although Billpoint's business is new, several new companies
have entered this market, including competitors who are offering free services
and significant promotional incentives, and large companies, including banks and
credit card companies, are also beginning to enter this market. Half.com
competes directly with online retailers in its product categories, as well as
traditional sellers of used books, videos and CDs.
Our business is dependent on the development and maintenance of the Internet
infrastructure
The success of our service will depend largely on the development and
maintenance of the Internet infrastructure. This includes maintenance of a
reliable network backbone with the necessary speed, data capacity and security,
as well as timely development of complementary products such as high-speed
modems, for providing reliable Internet access and services. Because global
commerce and the online exchange of information is new and evolving, we cannot
predict whether the Internet will prove to be a viable commercial marketplace in
the long term. The Internet has experienced, and is likely to continue to
experience, significant growth in the numbers of users and amount of traffic. If
the Internet continues to experience increased numbers of users, increased
frequency of use or increased bandwidth requirements, the Internet
infrastructure may be unable to support the demands placed on it. In addition,
the performance of the Internet may be harmed by increased users or bandwidth
requirements.
The Internet has experienced a variety of outages and other delays as a
result of damage to portions of its infrastructure, and it could face outages
and delays in the future. These outages and delays could reduce the level of
Internet usage as well as the level of traffic and the processing transactions
on our service. In addition, the Internet could lose its viability due to delays
in the development or adoption of new standards and protocols to handle
increased levels of activity or due to increased governmental regulation. The
infrastructure and complementary products or services necessary to make the
Internet a viable commercial marketplace for the long term may not be developed
successfully or in a timely manner. Even if these products or services are
developed, the Internet may not become a viable commercial marketplace for
services such as those that we offer.
Our business is subject to online commerce security risks
A significant barrier to online commerce and communications is the
secure transmission of confidential information over public networks. Our
security measures may not prevent security breaches. Our failure to prevent
security breaches could harm our business. Currently, a significant number of
our users authorize us to bill their credit card accounts directly for all
transaction fees charged by us. We rely on encryption and authentication
technology licensed from third parties to provide the security and
authentication technology to effect secure transmission of confidential
information, including customer credit card numbers. Advances in computer
capabilities, new discoveries in the field of cryptography, or other
developments may result in a compromise or breach of the technology used by us
to protect customer transaction data. A number of websites have reported
breaches of their security. Any compromise of our security could harm our
reputation and, therefore, our business. In addition, a party who is able to
circumvent our security measures could misappropriate proprietary information or
cause interruptions in our operations. An individual has claimed to have
misappropriated some of our confidential information by breaking into our
computer system. We may need to expend significant resources to protect against
security breaches or to address problems caused by breaches. Security breaches
could damage our reputation and expose us to a risk of loss or litigation and
possible liability. Our insurance policies carry low coverage limits, which may
not be adequate to reimburse us for losses caused by security breaches.
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We must keep pace with rapid technological change to remain competitive
The market in which we compete is characterized by rapidly changing
technology, evolving industry standards, frequent new service and product
introductions and enhancements and changing customer demands. These market
characteristics are worsened by the emerging and changing nature of the
Internet. Our future success therefore will depend on our ability to adapt to
rapidly changing technologies, to adapt our services to evolving industry
standards and to continually improve the performance, features and reliability
of our service. Our failure to adapt to such changes would harm our business. In
addition, the widespread adoption of new Internet, networking or
telecommunications technologies or other technological changes could require
substantial expenditures to modify or adapt our services or infrastructure.
We need to develop new services, features and functions in order to expand
We plan to expand our operations by developing new or complementary
services, products or transaction formats or expanding the breadth and depth of
services. We may be unable to expand our operations in a cost-effective or
timely manner. Even if we do expand, we may not maintain or increase our overall
market acceptance. If we launch a new business or service that is not favorably
received by consumers, it could damage our reputation and diminish the value of
our brand. We anticipate that future services will include pre-and post-trade
services.
We are pursuing strategic relationships with third parties to provide
many of these services. By using third parties to deliver these services, we may
be unable to control the quality of these services and our ability to address
problems if any of these third parties fails to perform adequately will be
reduced. Expanding our operations in this manner also will require significant
additional expenses and development, operations and other resources and will
strain our management, financial and operational resources. The lack of market
acceptance of any new services could harm our business.
Our growth will depend on our ability to develop our brand
We believe that our historical growth has been largely attributable to
word of mouth. We have benefited from frequent and high visibility media
exposure both nationally and locally. We do not expect the frequency or quality
of this media exposure to continue. However, we believe that continuing to
strengthen our brand will be critical to achieving widespread acceptance of our
service. Promoting and positioning our brand will depend largely on the success
of our marketing efforts and our ability to provide high quality services. In
order to promote our brand, we will need to increase our marketing budget and
otherwise increase our financial commitment to creating and maintaining brand
loyalty among users. Brand promotion activities may not yield increased
revenues, and even if they do, any increased revenues may not offset the
expenses we incurred in building our brand. If we do attract new users to our
service, they may not conduct transactions over our service on a regular basis.
If we fail to promote and maintain our brand or incur substantial expenses in an
unsuccessful attempt to promote and maintain our brand, our business would be
harmed.
We may be unable to protect or enforce our own intellectual property rights
adequately
We regard the protection of our copyrights, service marks, trademarks,
trade dress and trade secrets as critical to our success. We rely on a
combination of patent, copyright, trademark, service mark and trade secret laws
and contractual restrictions to protect our proprietary rights in products and
services. We have entered into confidentiality and invention assignment
agreements with our employees and contractors, and nondisclosure agreements with
parties with whom we conduct business in order to limit access to and disclosure
of our proprietary information. These contractual arrangements and the other
steps taken by us to protect our intellectual property may not prevent
misappropriation of our technology or deter independent third-party development
of similar technologies. We pursue the registration of our trademarks and
service marks in the U.S. and internationally. Effective copyright, service
mark, trademark, trade dress and trade secret protection is very expensive to
maintain, and protection may not be available in every country in which our
services are made available online. Furthermore, we must also protect our URL in
an increasing number of jurisdictions, a process that is expensive and may not
be successful in every location. We have licensed in the past, and expect to
license in the future, certain of our
18
<PAGE> 21
proprietary rights, such as trademarks or copyrighted material, to third
parties. These licensees may take actions that might diminish the value of our
proprietary rights or harm our reputation. We also rely on certain technologies
that we license from third parties, such as Oracle Corporation, Microsoft and
Sun Microsystems Inc., the suppliers of key database technologies, the operating
system and specific hardware components for our service. These third-party
technology licenses may not continue to be available to us on commercially
reasonable terms. The loss of this technology could require us to obtain
substitute technology of lower quality or performance standards or at greater
cost.
Our business is subject to consumer trends and discretionary consumer spending
We derive most of our revenues from fees received from sellers for
listing products for sale on our service and fees received from successfully
completed transactions. Our future revenues will depend upon continued demand
for the types of goods that are listed by users of our service. The popularity
of certain categories of items, such as toys, dolls and memorabilia, among
consumers may vary over time due to perceived scarcity, subjective value, and
societal and consumer trends in general. A decline in the popularity of, or
demand for, certain collectibles or other items sold through our service could
reduce the overall volume of transactions on our service, resulting in reduced
revenues. In addition, consumer "fads" may temporarily inflate the volume of
certain types of items listed on our service, placing a significant strain upon
our infrastructure and transaction capacity. These trends also may cause
fluctuations in our operating results from one reporting period to the next. Any
decline in demand for the goods offered through our service as a result of
changes in consumer trends could harm our business. A decline in consumer
spending would harm our land-based auction businesses. Sales of fine and
decorative art, collectable cars and other collectibles would be adversely
affected by a decline in discretionary consumer spending, especially for luxury
items. Changes in buyer's tastes, economic conditions or consumer trends could
cause declines in the number or dollar volume of items sold and thereby harm the
business of these companies.
Some anti-takeover provisions may affect the price of our common stock
The Board of Directors has the authority to issue up to 10,000,000
shares of preferred stock and to determine the preferences, rights and
privileges of those shares without any further vote or action by the
stockholders. The rights of the holders of common stock may be harmed by the
rights of the holders of any preferred stock that may be issued in the future.
Some provisions of our certificate of incorporation and bylaws could have the
effect of making it more difficult for a third party to acquire a majority of
our outstanding voting stock. These include provisions that provide for a
classified Board of Directors, prohibit stockholders from taking action by
written consent and restrict the ability of stockholders to call special
meetings. We are also subject to provisions of Delaware law that prohibit us
from engaging in any business combination with any interested stockholder for a
period of three years from the date the person became an interested stockholder,
unless certain conditions are met. This could have the effect of delaying or
preventing a change of control.
We are controlled by certain stockholders, executive officers and directors
Our executive officers and directors (and their affiliates) own a
majority of our outstanding common stock. As a result, they have the ability to
control our company and direct our affairs and business, including the election
of directors and approval of significant corporate transactions. This
concentration of ownership may have the effect of delaying, deferring or
preventing a change in control of our company and may make some transactions
more difficult or impossible without the support of these stockholders. Any of
these events could decrease the market price of our common stock.
19
<PAGE> 22
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares of
common stock offered by the selling stockholders. See "Selling Stockholders."
DIVIDEND POLICY
We have never declared or paid any cash dividends on our capital stock.
We intend to retain any future earnings to support operations and to finance the
growth and development of our business, and we do not anticipate paying cash
dividends for the foreseeable future.
WHERE YOU CAN GET MORE INFORMATION
We are a reporting company and file annual, quarterly and current
reports, proxy statements and other information with the SEC. You may read and
copy these reports, proxy statements and other information at the SEC's public
reference rooms at Room 1024, 450 Fifth Street, N.W., Washington, D.C., as well
as at the SEC's regional offices at 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York, NY
10048. You can request copies of these documents by writing to the SEC and
paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for
more information about the operation of the public reference rooms. Our SEC
filings are also available at the SEC's website at "http://www.sec.gov." In
addition, you can read and copy our SEC filings at the office of the National
Association of Securities Dealers, Inc. at 1735 "K" Street, Washington, D.C.
20006.
The SEC allows us to "incorporate by reference" information that we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings we will make with
the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934:
- Annual Report on Form 10-K for the year ended December 31, 1999,
filed March 30, 2000, as amended by the Annual Report on Form 10-K/A
filed April 28, 2000;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 2000,
filed May 15, 2000;
- Quarterly Report on Form 10-Q for the quarter ended June 30, 2000,
filed August 9, 2000;
- Current Report on Form 8-K, filed May 25, 2000; and
- The description of the common stock contained in our Registration
Statement on Form 8-A, filed August 20, 1998.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
eBay Inc.
2145 Hamilton Avenue
San Jose, CA 95125
(408) 558-7400
This prospectus is part of a Registration Statement we filed with the
SEC. You should rely only on the information incorporated by reference or
provided in this prospectus and the Registration Statement. We have authorized
no one to provide you with different information. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of the document.
20
<PAGE> 23
SELLING STOCKHOLDERS
In the acquisition of Half.com that we consummated on July 11, 2000, we
issued to all of the selling stockholders shares of our common stock, and we
agreed to register a number of shares of the common stock for resale. We also
agreed to use reasonable efforts to keep the registration statement effective
until the earliest of the date the shares of common stock offered under this
prospectus have been sold to the public, the date one year from the date of
effectiveness of this prospectus (subject to adjustment in certain cases for
delays in filing) and, in some cases, the date when all shares of common stock
offered under this prospectus may be sold in any three-month period under Rule
144. Our registration of the shares of common stock does not necessarily mean
that the selling stockholders will sell all or any of the shares.
The following table sets forth certain information regarding the
beneficial ownership of the common stock, as of September 15, 2000, by each of
the selling stockholders.
The information provided in the table below with respect to each selling
stockholder has been obtained from that selling stockholder. Except as otherwise
disclosed below, none of the selling stockholders has, or within the past three
years has had, any position, office or other material relationship with us.
Because the selling stockholders may sell all or some portion of the shares of
common stock beneficially owned by them, we cannot estimate the number of shares
of common stock that will be beneficially owned by the selling stockholders
after this offering. In addition, the selling stockholders may have sold,
transferred or otherwise disposed of, or may sell, transfer or otherwise dispose
of, at any time or from time to time since the date on which they provided the
information regarding the shares of common stock beneficially owned by them, all
or a portion of the shares of common stock beneficially owned by them in
transactions exempt from the registration requirements of the Securities Act of
1933.
Beneficial ownership is determined in accordance with Rule 13d-3(d)
promulgated by the SEC under the Securities Exchange Act of 1934. Unless
otherwise noted, each person or group identified possesses sole voting and
investment power with respect to shares, subject to community property laws
where applicable. None of the share amounts set forth below represents more than
1% of our outstanding stock as of September 15, 2000, adjusted as required by
rules promulgated by the SEC.
<TABLE>
<CAPTION>
SELLING STOCKHOLDER NUMBER SHARES BEING OFFERED
------------------- -------- --------------------
<S> <C> <C>
Infonautics, Inc. .......................................... 174,392 130,794
David R. King .............................................. 7,847 5,885
Howard L. Morgan ........................................... 38,366 28,774
Woodland Partners .......................................... 56,422 42,316
B-ETC LP. .................................................. 148,019 111,014
Minor/O'Brien Ventures I, LLC .............................. 29,603 22,202
Pennsylvania Early Stage Partners, L.P. .................... 59,207 44,405
Mark L. Walsh .............................................. 3,700 2,775
Michael Lynton ............................................. 3,700 2,775
Joshua M. Kopelman and Rena M. Kopelman, Tenants in
Entireties ................................................. 1,412,581 1,059,435
Srinivas Balijepalli ....................................... 156,953 117,714
VIMAC HDC Limited Partnership .............................. 125,131 93,848
VIMAC PCC Limited Partnership .............................. 305,200 228,900
VIMAC 98 Vintage Trust Limited Partnership ................. 30,519 22,889
VIMAC 99 Vintage Trust Limited Partnership ................. 66,869 50,151
VIMAC hdc 2 Limited Partnership ............................ 287,172 215,379
David Schlessinger ......................................... 30,519 22,889
Comcast Interactive Capital, LP ............................ 769,735 577,301
CMGI@Ventures IV, LLC ...................................... 1,480,267 1,110,200
</TABLE>
21
<PAGE> 24
PLAN OF DISTRIBUTION
The shares of common stock may be sold from time to time by the selling
stockholders in one or more transactions at fixed prices, at market prices at
the time of sale, at varying prices determined at the time of sale or at
negotiated prices. As used in this prospectus, "selling stockholders" includes
donees, pledges, transferees and other successors in interest selling shares
received from a selling stockholder after the date of this prospectus as a gift,
pledge, partnership distribution or other non-sale transfer. Upon our being
notified by a selling stockholder that a donee, pledgee, transferee or other
successor in interest intends to sell more than 500 shares, a supplement to this
prospectus will be filed. The selling stockholders may offer their shares of
common stock in one or more of the following transactions:
- on any national securities exchange or quotation service on which
the common stock may be listed or quoted at the time of sale,
including the Nasdaq National Market;
- in the over-the-counter market;
- in private transactions;
- through options;
- by pledge to secure debts and other obligations; or
- through a combination of any of the above transactions.
If required, we will distribute a supplement to this prospectus to
describe material changes in the terms of the offering.
The shares of common stock described in this prospectus may be sold from
time to time directly by the selling stockholders. Alternatively, the selling
stockholders may from time to time offer shares of common stock to or through
underwriters, broker/dealers or agents. The selling stockholders and any
underwriters, broker/dealers or agents that participate in the distribution of
the shares of common stock may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933. Any profits on the resale of shares of common
stock and any compensation received by any underwriter, broker/dealer or agent
may be deemed to be underwriting discounts and commissions under the Securities
Act of 1933. We have agreed to indemnify each selling stockholder against
certain liabilities, including liabilities arising under the Securities Act of
1933. The selling stockholders may agree to indemnify any agent, dealer or
broker-dealer that participates in the sale of shares of common stock described
in this prospectus against certain liabilities, including liabilities arising
under the Securities Act of 1933.
Any shares covered by this prospectus that qualify for sale pursuant to
Rule 144 under the Securities Act of 1933 may be sold under Rule 144 rather than
pursuant to this prospectus. The selling stockholders may not sell all of the
shares they hold. The selling stockholders may transfer, devise or gift such
shares by other means not described in this prospectus.
To comply with the securities laws of certain jurisdictions, the common
stock must be offered or sold only through registered or licensed brokers or
dealers. In addition, in certain jurisdictions, the shares of common stock may
not be offered or sold unless they have been registered or qualified for sale or
an exemption is available and complied with.
Under the Securities Exchange Act of 1934, any person engaged in a
distribution of the common stock may not simultaneously engage in market-making
activities with respect to the common stock for five business days prior to the
start of the distribution. In addition, each selling stockholder and any other
person participating in a distribution will be subject to the Securities
Exchange Act of 1934, which may limit the timing of purchases and sales of
common stock by the selling stockholders or any such other person. These factors
may affect the marketability of the common stock and the ability of brokers or
dealers to engage in market-making activities.
All expenses of this registration, estimated at approximately $93,000,
will be paid by us. These expenses include the SEC's filing fees and printing,
legal and accounting fees.
LEGAL MATTERS
For the purpose of this offering, Cooley Godward LLP, San Francisco,
California, is giving an opinion as to the validity of the common stock offered
by this prospectus.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K for year ended December 31, 1999, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
22
<PAGE> 25
================================================================================
WE HAVE NOT AUTHORIZED ANY DEALER, SALES PERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. YOU MUST NOT RELY ON ANY UNAUTHORIZED
INFORMATION. THIS PROSPECTUS IS NOT AN OFFER OF THESE SECURITIES IN ANY STATE
WHERE AN OFFER IS NOT PERMITTED. THE INFORMATION IN THIS PROSPECTUS IS CURRENT
AS OF , 2000. YOU SHOULD NOT ASSUME THAT THIS PROSPECTUS IS ACCURATE AS OF ANY
OTHER DATE.
-----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary..................... 2
Risk Factors........................... 3
Use of Proceeds........................ 20
Dividend Policy........................ 20
Where You Can Find More Information.... 20
Selling Stockholders................... 21
Plan of Distribution................... 22
Legal Matters.......................... 22
Experts................................ 22
</TABLE>
3,889,646 SHARES
COMMON STOCK
--------------------
PROSPECTUS
--------------------
eBay Inc.
, 2000
================================================================================
<PAGE> 26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, if any, all of which will be paid by the
registrant. All amounts are estimated, except the SEC registration fee:
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee ......... $63,409
Accounting fees .............. $12,500
Legal fees and expenses ...... $ 5,000
Miscellaneous ................ $ 2,091
Printing and engraving ....... $10,000
Total ....................... $93,000
</TABLE>
Item 15. Indemnification of Officers and Directors.
As permitted by Section 145 of the Delaware General Corporation Law, the
Bylaws of the Registrant provide that (i) the Registrant is required to
indemnify its directors and executive officers to the fullest extent permitted
by the Delaware General Corporation Law, (ii) the Registrant may, in its
discretion, indemnify other officers, employees and agents as set forth in the
Delaware General Corporation Law, (iii) to the fullest extent permitted by the
Delaware General Corporation Law, the Registrant is required to advance all
expenses incurred by its directors and executive officers in connection with a
legal proceeding (subject to certain exceptions), (iv) the rights conferred in
the Bylaws are not exclusive, (v) the Registrant is authorized to enter into
indemnification agreements with its directors, officers, employees and agents
and (vi) the Registrant may not retroactively amend the Bylaws provisions
relating to indemnity.
The Registrant has entered into agreements with its directors and
executive officers that require the Registrant to indemnify such persons against
expenses, judgments, fines, settlements and other amounts that such person
becomes legally obligated to pay (including expenses of a derivative action) in
connection with any proceeding, whether actual or threatened, to which any such
person may be made a party by reason of the fact that such person is or was a
director or officer of the Registrant or any of its affiliated enterprises,
provided such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Registrant. The
indemnification agreements also set forth certain procedures that will apply in
the event of a claim for indemnification thereunder.
Item 16. Exhibits and Financial Statement Schedules.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<S> <C>
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to this
Registration Statement.
24.1 Power of Attorney. Reference is made to the signature page.
</TABLE>
<PAGE> 27
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the Registrant pursuant to the provisions described in Item 14 or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer, or
controlling person of the Registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to the
initial bona fide offering thereof.
<PAGE> 28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Jose, State of California, on the 19th day of
September, 2000.
eBay Inc.
/s/ Margaret C. Whitman
----------------------------------------------------
Margaret C. Whitman
President, Chief Executive Officer
and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Margaret C. Whitman, Gary F. Bengier and
Michael R. Jacobson, and each or any one of them, each with the power of
substitution, his or her attorney-in-fact, to sign any amendments to this
Registration Statement (including post-effective amendments), with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or his substitute or substitutes, may do or cause to be done
by virtue hereof.
<PAGE> 29
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Margaret C. Whitman President, Chief Executive September 19, 2000
-------------------------------------------- Officer and Director
Margaret C. Whitman
/s/ Gary F. Bengier Vice President and Chief September 19, 2000
-------------------------------------------- Financial Officer (Principal
Gary F. Bengier Financial Officer)
/s/ Pierre M. Omidyar Founder, Chairman of the September 19, 2000
-------------------------------------------- Board and Director
Pierre M. Omidyar
/s/ Philippe Bourguignon Director September 19, 2000
--------------------------------------------
Philippe Bourguignon
/s/ Scott D. Cook Director September 19, 2000
--------------------------------------------
Scott D. Cook
/s/ Dawn G. Lepore Director September 19, 2000
--------------------------------------------
Dawn G. Lepore
/s/ Robert C. Kagle Director September 19, 2000
--------------------------------------------
Robert C. Kagle
/s/ Howard D. Schultz Director September 19, 2000
--------------------------------------------
Howard D. Schultz
</TABLE>
<PAGE> 30
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<S> <C>
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Independent Accountants.
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to this
Registration Statement.
24.1 Power of Attorney. Reference is made to the signature page.
</TABLE>
