eBay's Shadow Clouds MercadoLibre's Future

Operating income, meanwhile, grew more than threefold in the first quarter to $2.8 million from $800,000 in the year-ago quarter.

To the degree that eBay has been active in Latin America, it's been through MercadoLibre. In 2001, eBay bought Paris-based iBazar to bulk up its European presence, and it took control of iBazar's Brazilian unit as well -- until eBay sold the Brazilian operations to MercadoLibre in exchange for the equity stake. As a result of the offering, in which eBay isn't selling any of its shares, that stake will be diluted to 18.5%.

eBay has been much more than a passive stockholder, lending the company $12 million in 2005 -- $9.3 million that MercatoLibre is raising will repay the outstanding balance -- and, as the IPO prospectus notes, "access to certain know-how and experience, which accelerated aspects of our development."

What's more, eBay's agreement to not compete with MercadoLibre for a number of years expired last September. "Even though eBay is one of our stockholders, with the termination of this agreement, there are no contractual restrictions upon eBay becoming one of our competitors," the IPO filing notes.

If that happened, the company says in the risk section of the filing, "it would have a material adverse effect on our results of operations and prospects." This is more than your typical risk-factor boilerplate -- such a move is a part of eBay's playbook: Despite its 25% stake in Craigslist, eBay recently began competing with the online classifieds site through the launch of its Kijiji.com service in the U.S. market.