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USD ($)

USD ($) / shares
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   &lt;!-- Begin Block Tagged Note 2 - us-gaap:SignificantAccountingPoliciesTextBlock--&gt;
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       &lt;td width="3%" nowrap="nowrap" align="left"&gt;&lt;b&gt;2.&lt;/b&gt;&lt;/td&gt;
       &lt;td width="1%"&gt;&amp;#160;&lt;/td&gt;
       &lt;td&gt;
   &lt;div style="text-align: justify"&gt;&lt;b&gt;Summary of Significant Accounting Policies&lt;/b&gt;
   &lt;/div&gt;&lt;/td&gt;
   &lt;/tr&gt;
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   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Principles of consolidation&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The accompanying consolidated financial statements are prepared in conformity with accounting
   principles generally accepted in the United States of America (U.S. GAAP) and include the
   accounts of the Company and its wholly-owned subsidiaries. These financial statements are
   stated in US dollars. All intercompany transactions and balances have been eliminated.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Substantially all revenues and operating costs are generated in the Company&amp;#8217;s foreign
   operations, amounting to approximately 99.6% of the consolidated totals during 2010, 99.3% of
   the consolidated totals during 2009 and 98.3% of the consolidated totals during 2008.
   Long-lived assets located in the foreign operations totaled $81,834,265 and $67,523,246 as of
   December&amp;#160;31, 2010 and 2009, respectively. Cash and cash equivalents as well as short-term and
   long term investments, totaling $141,019,513 and $91,010,944 as of December&amp;#160;31, 2010 and 2009,
   respectively, are mainly located in the United States of America.
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   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Use of estimates&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The preparation of consolidated financial statements in conformity with generally accepted
   accounting principles requires management to make estimates and assumptions that affect the
   reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
   at the date of the financial statements and the reported amounts of revenues and expenses
   during the reporting period. Estimates are used for, but not limited to accounting for
   allowance for doubtful accounts, depreciation, amortization, impairment and useful lives of
   long-lived assets, impairment of goodwill and other indefinite lived intangible assets,
   compensation cost related to cash and share-based compensation and restricted shares,
   recognition of current and deferred income taxes and contingencies. Actual results could differ
   from those estimates.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Cash and cash equivalents&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The Company considers all highly liquid investments with an original maturity of three months
   or less at the date of purchase, consisting primarily of money market funds and certificates of
   deposit, to be cash equivalents. Cash equivalents are stated at amortized cost plus accrued
   interest.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Investments&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Time
   deposits are valued at amortized cost plus accrued interest. Securities classified as available-for-sale are
   recorded at fair market value. Unrealized gains and losses on available-for-sale securities are
   recorded as accumulated other comprehensive income (loss)&amp;#160;as a separate component of
   shareholders&amp;#8217; equity, net of tax. Investments classified as held-to-maturity are recorded at
   amortized cost with interest income recorded in earnings. Investments are classified as current
   or non-current depending on their maturity dates and availability to fund operations.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Fair Value Measurements&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Cash, money markets, corporate debt securities, sovereign debt securities and assets backed
   securities are valued at fair value. Deposits, accounts receivables, funds receivables from
   customers, other receivables, other assets, accounts payables, payroll and social security
   payables, taxes payables, loans and provisions and other liabilities are valued cost which
   approximates their fair value because of its short term maturity. See Note 8 &amp;#8220;Fair Value
   Measurement of Assets and Liabilities&amp;#8221; for further details.
   &lt;/div&gt;
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   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Concentration of credit risk&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Cash, cash equivalents, investments and accounts receivable are potentially subject to
   concentration of credit risk. Cash and cash equivalents and investments are placed with
   financial institutions that management believes are of high credit quality. Accounts receivable
   are derived from revenue earned from customers located internationally. Accounts receivable
   balances are settled through customer credit cards, debit cards, and MercadoPago accounts, with
   the majority of accounts receivable collected upon processing of credit card transactions. The
   Company maintains an allowance for doubtful accounts receivable and funds receivable from
   customers based upon its historical experience and the current condition of specific customers.
   Historically, such losses have been within management expectations. However, unexpected or
   significant future changes in trends could result in a material impact to future statements of
   income or cash flows. Due to the relatively small dollar amount of individual accounts
   receivable, the Company generally does not require collateral on these balances. The allowance
   for doubtful accounts is recorded as a charge to operating expense.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;During the years ended December&amp;#160;31, 2010, 2009 and 2008, no customers accounted for more
   than 5% of net revenues. As of December&amp;#160;31, 2010 and 2009, no customers accounted for more than
   5% of accounts receivables, net.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Allowance for doubtful accounts&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The company maintains allowances for doubtful accounts for estimated losses
   that may result from the inability of its customers to make required payments.
   Allowances are based upon several factors including, but not limited to,
   historical experience and the current condition of specific customers.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Funds receivable and funds payable to customers&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Funds receivable relate to the Company&amp;#8217;s payments solution and arise due to the
   time taken to clear transactions through external payment networks. When
   customers fund their account using their bank account or credit card, there is
   a period before the cash is received by the Company. Hence, these funds are
   treated as a receivable until the cash is settled. These funds are presented
   net of the related allowance for chargebacks.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Funds payable relate also to the Company&amp;#8217;s payments solution and means amounts due to sellers
   held by the Company until the transaction is completed. Funds, net of any amount due to the
   Company, are maintained in the seller current account until collection is requested by the customer.
   &lt;/div&gt;
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   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Transfer of Financial Assets&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The Company sells funds receivable from customers comprised by credit cards coupons to
   financial institutions. These transactions are accounted for as a true sale. Accounting
   guidance on transfer of financial assets establishes that the transferor has surrendered
   control over transferred assets if and only if all of the following conditions are met: (1)&amp;#160;the
   transferred assets have been isolated from the transferor, (2)&amp;#160;each transferee has the right to
   pledge or exchange the assets it received (3)&amp;#160;the transferor does not maintain effective
   control over the transferred assets. As all the conditions were met, the Company derecognizes
   the financial assets from its balance sheet. As of December&amp;#160;31, 2010 and 2009, there is no
   continuing involvement with transferred assets. The aggregate amount
   of pre-tax gain recognized on sale
   of funds receivable from customers is $19,195,987, $7,795,447, and $1,978,579, for the fiscal
   year ended December&amp;#160;31, 2010, 2009 and 2008, respectively.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Property and equipment, net&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Property and equipment are recorded at cost and depreciated over their estimated useful lives
   using the straight-line method. Repairs and maintenance costs are expensed as incurred.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Costs related to the planning and post implementation phases of website development efforts are
   recorded as an operating expense. Direct costs incurred in the development phase are
   capitalized and amortized over an estimated useful life of three years. During the years ended
   December&amp;#160;31, 2010 and 2009, the Company capitalized $926,619 and $672,241, respectively.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;On June&amp;#160;19, 2008, the Company&amp;#8217;s Argentine subsidiary agreed to participate in a real estate
   trust for the construction of an office building located in the City of Buenos Aires, buying
   5,340 square meters divided into 5 floors and 70 parking spaces, where the Company has moved
   its headquarters and Argentine operation offices on February&amp;#160;14, 2011. As of December&amp;#160;31, 2009,
   the investment was recorded under the caption &amp;#8220;Long-term investments&amp;#8221; in the Company&amp;#8217;s balance
   sheet.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;On August&amp;#160;31, 2010, the Company&amp;#8217;s Argentine subsidiary received the certificate of possession
   of the building and started incurring in additional costs in order to bring the building into
   conditions of being used by the company. Therefore, the company reclassified the building cost
   to &amp;#8220;Property and Equipment&amp;#8221; in the balance sheet and started accounting all costs necessary to
   bring the building in condition to be used under that caption of the balance sheet. As of
   December&amp;#160;31, 2010, the building cost amounts to $8,854,879.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The building will be depreciated from the date when it was ready to be used, using the
   straight-line depreciation method over a 50-year depreciable life.
   &lt;/div&gt;
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   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Goodwill, net&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Goodwill represents the excess of the purchase price over the fair value of the net tangible
   and intangible assets acquired in a business combination. Goodwill is not subject to
   amortization, but is subject to at least an annual assessment for impairment, applying a
   fair-value based test.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Intangible assets, net&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Intangible assets resulting from the acquisitions of entities accounted for using the
   purchase method of accounting are estimated by management based on the fair value of assets
   received. Identifiable intangible assets are comprised of purchased customer lists, trademarks,
   licenses and non-compete agreements. Identifiable intangible assets with definite useful life,
   are being amortized over the period of estimated benefit using the straight-line method and
   estimated useful lives ranging from three to five years. Trademarks with indefinite useful
   life are not subject to amortization, but are subject to at least an annual assessment for
   impairment, applying a fair-value based test.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Impairment of Long-Lived Assets&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The Company reviews long-lived assets for impairments whenever events or changes in
   circumstances indicate that the carrying value of an asset may not be recoverable.
   Recoverability of assets to be held and used is measured by a comparison of the carrying amount
   of an asset to undiscounted future net cash flows expected to be generated by the asset. If
   such assets are considered to be impaired on this basis, the impairment loss to be recognized
   is measured by the amount by which the carrying amount of the assets exceeds the fair value of
   the assets.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Goodwill and certain indefinite life trademarks are reviewed at the end of the year for
   impairment or more frequently when events or changes in circumstances indicate that the
   carrying value may not be recoverable. Impairment of goodwill and certain
   trademarks is tested at the reporting unit level (considering each segment of the Company as a
   reporting unit) by comparing the reporting unit&amp;#8217;s carrying amount, including goodwill and
   certain trademarks, to the fair value of the reporting unit. The fair values of the reporting
   units are estimated using a combination of the income or discounted cash flows approach and the
   market approach, which utilizes comparable companies&amp;#8217; data. Cash flow projections used are
   based on financial budgets approved by management. The growth rates applied do not exceed the
   long-term average growth rate for the business in which the reporting unit operates. The
   average discount rate used for 2010 was 18.9% and for 2009 was 20.6%. Those rates reflect the
   Company&amp;#8217;s real weighted average cost of capital. Key drivers in the analysis include Confirmed
   Registered Users (&amp;#8220;CRUs&amp;#8221;), Gross Merchandise Volume (&amp;#8220;GMV&amp;#8221;) which represents a measure of the
   total U.S. dollar amount of all transactions completed through the MercadoLibre marketplace,
   excluding motor vehicles, vessels, aircraft, real estate, and services and take rate defined as
   marketplace revenues as a percentage of gross merchandise volume. In addition, the benchmark in
   the analysis include
   a business to e-commerce rate, which represents growth of e-commerce as a percentage of GDP,
   internet penetration rates as well as trends in the Company&amp;#8217;s market share.
   &lt;/div&gt;
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   &lt;b&gt;
   &lt;/b&gt;
   &lt;/div&gt;
   &lt;div style="margin-top: 0pt"&gt;
   &lt;table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt"&gt;
   &lt;tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"&gt;
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   &lt;b&gt;
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   &lt;div style="text-align: justify"&gt;
   &lt;b&gt;
   &lt;/b&gt;
   &lt;/div&gt;
   &lt;/td&gt;
   &lt;/tr&gt;
   &lt;/table&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;If the carrying amount of the reporting unit exceeds its fair value, goodwill or indefinite
   useful life intangible assets are considered impaired and a second step is performed to measure
   the amount of impairment loss, if any. No impairments were recognized during the
   reporting periods and management&amp;#8217;s assessment of each reporting unit fair value materially
   exceeds its carrying value.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Revenue Recognition&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Revenues are recognized when evidence of an arrangement exists, the fee is fixed or
   determinable, no significant obligation remains and collection of the receivable is reasonably
   assured.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The most significant services and fees and their related revenue recognition criteria applied
   during 2008 through 2010 have been:
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&amp;#8226; Services for intermediation between on-line buyers and sellers, for which the company charges
   a percentage on the transaction value (&amp;#8220;final value fees&amp;#8221;), are recognized as revenue once the
   sale transaction between the buyer and seller is successfully completed (which occurs upon
   confirmation of the sale by the seller in the case of sales at a fixed price, or once the
   bidding period ends for auction transactions).
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&amp;#8226; Services for the use of the Company&amp;#8217;s on-line payments solution, either for transactions on
   or off-platform ordered by Mercadopago customers. The fee that we charge for all
   off-marketplace platform transactions is recorded as revenue once the transaction is completed,
   at the time when the payment is processed by the Company. For on-marketplace platform
   transactions, we generate revenue in the countries where we offer the service in a way that
   implies that the customer has to pay an additional fee for the right to use the payments
   solution. In 2010 we no longer charged a separate fee for on-platform transactions in certain
   countries (See note 7).
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&amp;#8226; Listing and optional feature services, which fees relate to the right of a seller to have the
   item offered listed in a preferential way, as well as classified advertising services, are
   recorded as revenue ratably during the listing period. Those fees are charged at the time the
   listing is uploaded onto the Company&amp;#8217;s platform and is not subject to successful sale of the
   items listed.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&amp;#8226; Advertising revenues which are principally derived from MercadoClics services are recognized
   ratably during the advertising period, and the sale of banners or sponsorship of sites are
   recognized based on per-click values and as the impressions are delivered.
   &lt;/div&gt;
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   &lt;div align="left" style="font-size: 10pt; margin-top: 0pt"&gt;
   &lt;b&gt;
   &lt;/b&gt;
   &lt;/div&gt;
   &lt;div style="margin-top: 0pt"&gt;
   &lt;table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt"&gt;
   &lt;tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"&gt;
   &lt;td width="3%" nowrap="nowrap" align="left"&gt;
   &lt;b&gt;
   &lt;/b&gt;
   &lt;/td&gt;
   &lt;td width="1%"&gt;&lt;/td&gt;
   &lt;td&gt;
   &lt;div style="text-align: justify"&gt;
   &lt;b&gt;
   &lt;/b&gt;
   &lt;/div&gt;
   &lt;/td&gt;
   &lt;/tr&gt;
   &lt;/table&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Derivative Financial Instruments&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;During November and December&amp;#160;2008 and March&amp;#160;2009, the Company entered into written put options
   of its own stock. Those derivative financial instruments were not accounted for as hedges and,
   therefore, changes in the fair value of these instruments were recorded in the statement of
   income as interest income and other financial gains. As of December&amp;#160;31, 2010 and 2009 there is
   no written put options transaction outstanding. See &amp;#8220;Note 17 &amp;#8212; Share Repurchase Plan&amp;#8221; for a
   full description of derivative financial instrument activities and related accounting policies.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Share-based payments&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Stock options, restricted and additional shares and shares granted under the 2008 long
   term retention plan (&amp;#8220;the 2008 LTRP&amp;#8221;) are accounted for at their grant date
   fair value.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Fair value of stock options is calculated using the Black-Scholes option pricing model. This
   calculation is affected by the Company&amp;#8217;s stock price as well as assumptions regarding a number
   of highly complex and subjective variables. The use of a Black-Scholes model requires extensive
   actual employee exercise behavior data and a number of complex assumptions including expected
   life, expected volatility, risk-free interest rate and dividend yield. As a result, the future
   stock-based compensation expense may differ from historical amounts.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Fair value of restricted and additional shares and shares granted under the 2008 LTRP is
   calculated using the grant date price of the Company&amp;#8217;s shares.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Compensation cost is recognized on a straight-line basis over the requisite service period. For
   awards that have a graded vesting schedule, compensation cost is recognized on a straight-line
   basis over the requisite service period for each separate vesting portion of the award as if
   the award was, in-substance, multiple awards.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The liability related to the variable portion of 2010 and 2009 long term retention plan
   is remeasured at fair value using the last 60&amp;#160;days average stock price at December&amp;#160;31,
   2010 (See Note 16 &amp;#8220;Long Term Retention Plan&amp;#8221; for more details).
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Taxes on revenues&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The Company subsidiaries in Brazil, Argentina, Venezuela and Colombia are subject to certain
   taxes on revenues which are classified as cost of net revenues and totaled $15,049,821,
   $10,754,724, and $8,179,443 for the years ended December&amp;#160;31, 2010, 2009 and 2008, respectively.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Advertising Costs&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Advertising costs are expensed as incurred and totaled $20,173,078, $21,967,844 and $22,512,409
   for the years ended December&amp;#160;31, 2010, 2009 and 2008, respectively.
   &lt;/div&gt;
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   &lt;/div&gt;
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   &lt;div align="left" style="font-size: 10pt; margin-top: 0pt"&gt;
   &lt;b&gt;
   &lt;/b&gt;
   &lt;/div&gt;
   &lt;div style="margin-top: 0pt"&gt;
   &lt;table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt"&gt;
   &lt;tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"&gt;
   &lt;td width="3%" nowrap="nowrap" align="left"&gt;
   &lt;b&gt;
   &lt;/b&gt;
   &lt;/td&gt;
   &lt;td width="1%"&gt;&lt;/td&gt;
   &lt;td&gt;
   &lt;div style="text-align: justify"&gt;
   &lt;b&gt;
   &lt;/b&gt;
   &lt;/div&gt;
   &lt;/td&gt;
   &lt;/tr&gt;
   &lt;/table&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Comprehensive Income&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Comprehensive income is comprised of two components, net income and other comprehensive income
   (loss), and defined as all other changes in equity of the Company that result from transactions
   other than with shareholders. Other comprehensive income (loss)&amp;#160;includes the cumulative
   translation adjustment relating to the translation of the financial statements of the Company&amp;#8217;s
   foreign subsidiaries and unrealized gains on investments classified as available-for-sale
   securities. Total comprehensive income for the years ended December&amp;#160;31, 2010, 2009 and 2008
   amounted to $57,391,398, $20,318,216 and $3,834,129, respectively.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Foreign Currency Translation&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;All of the Company&amp;#8217;s foreign operations have determined the local currency to be their
   functional currency, except for Venezuela for the year ended December&amp;#160;31, 2010, as described
   below. Accordingly, these foreign subsidiaries translate assets and liabilities from their
   local currencies to U.S. dollars using year end exchange rates while income and expense
   accounts are translated at the average rates in effect during the year. The resulting
   translation adjustment is recorded as part of other comprehensive income (loss), a component of
   shareholders&amp;#8217; equity. Gains and losses resulting from transactions denominated in
   non-functional currencies are recognized in earnings. Net foreign currency transaction losses
   are included in the consolidated statements of income under the caption &amp;#8220;Foreign currency loss&amp;#8221;
   and amounted to $(62,447), $(2,658,476) and $(1,531,144) for the years ended December&amp;#160;31, 2010,
   2009 and 2008, respectively.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Until September&amp;#160;30, 2009, the Company translated its Venezuelan subsidiaries assets,
   liabilities, income and expense accounts at the official rate of 2.15 &amp;#8220;Bolivares Fuertes&amp;#8221;
   per US dollar.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Starting in the fourth quarter of 2009, as a result of the changes in facts and circumstances
   that affected the Company&amp;#8217;s ability to convert currency for dividends remittances using the
   official exchange rate in Venezuela, the Venezuelan subsidiaries assets, liabilities, income
   and expense accounts were translated using the parallel exchange rate resulting in the
   recognition in that quarter of a currency translation adjustment of $16,977,276 recorded in
   other comprehensive income. The average exchange rate used for translating the fourth quarter
   results was 5.67 &amp;#8220;Bolivares Fuertes&amp;#8221; per US dollar and the year-end exchange rate used for
   translating assets and liabilities was 6.05 &amp;#8220;Bolivares Fuertes&amp;#8221; per US dollar. The Company did
   not buy US dollars at the official rate.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;According to US GAAP, the Company transitioned its Venezuelan operations to highly
   inflationary status as of January&amp;#160;1, 2010 considering the US dollar as the functional
   currency. See &amp;#8220;Highly inflationary status in Venezuela&amp;#8221; below.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Therefore, no translation effect was accounted for in other comprehensive income during the
   year ended December&amp;#160;31, 2010 related to the Venezuelan operations.
   &lt;/div&gt;
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   &lt;b&gt;
   &lt;/b&gt;
   &lt;/div&gt;
   &lt;div style="margin-top: 0pt"&gt;
   &lt;table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt"&gt;
   &lt;tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"&gt;
   &lt;td width="3%" nowrap="nowrap" align="left"&gt;
   &lt;b&gt;
   &lt;/b&gt;
   &lt;/td&gt;
   &lt;td width="1%"&gt;&lt;/td&gt;
   &lt;td&gt;
   &lt;div style="text-align: justify"&gt;
   &lt;b&gt;
   &lt;/b&gt;
   &lt;/div&gt;
   &lt;/td&gt;
   &lt;/tr&gt;
   &lt;/table&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 0pt; margin-left: 4%"&gt;
   &lt;b&gt;
   &lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Until May&amp;#160;13, 2010, the only way by which US dollars could be purchased outside the official
   currency market was using an indirect mechanism consisting in the purchase and sale of
   securities, including national public debt bonds (DPNs) denominated in Bolivares Fuertes and
   bonds issued by the government that were denominated in U.S. dollars. This mechanism for
   transactions in certain securities created an indirect &amp;#8220;parallel&amp;#8221; foreign currency exchange
   market in Venezuela that enabled entities to obtain foreign currency through financial brokers
   without going through Commission for the Administration of Foreign Exchange
   (&amp;#8220;CADIVI&amp;#8221;). Although the parallel exchange rate was higher, and accordingly less
   beneficial, than the official exchange rate, some entities used the &amp;#8220;parallel&amp;#8221; market to
   exchange currency because of the delays of CADIVI in approving in a timely manner the exchange
   as requested by such entities. Until May&amp;#160;13, 2010, the Venezuelan subsidiaries used this
   mechanism to exchange Bolivares Fuertes for US dollars and accordingly the Company used the
   parallel average exchange rate to re-measure those foreign currency transactions.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;However, on May&amp;#160;14, 2010, the Venezuelan government enacted reforms to its exchange
   regulations and closed-down such parallel market by declaring that
   foreign-currency-denominated securities issued by Venezuelan entities were included in the
   definition of foreign currency, thus making the Venezuelan Central Bank (BCV)&amp;#160;the only
   institution that could legally authorize the purchase or sale of foreign currency bonds,
   thereby excluding non-authorized brokers from the foreign exchange market.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Trading of foreign currencies was re-opened as a regulated market on June&amp;#160;9, 2010 with the
   Venezuelan Central Bank as the only institution through which foreign currency-denominated
   transactions can be brokered. Under the new system, known as the Foreign Currency Securities
   Transactions System (SITME), entities domiciled in Venezuela can buy U.S. dollar&amp;#8212;denominated
   securities only through banks authorized by the BCV to import goods, services or capital
   inputs. Additionally, the SITME imposes volume restrictions on an entity&amp;#8217;s trading activity,
   limiting such activity to a maximum equivalent of $50,000 per day, not to exceed $350,000 in a
   calendar month. This limitation is non-cumulative, meaning that an entity cannot carry over
   unused volume from one month to the next.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;As a consequence of this new system, commencing on June&amp;#160;9, 2010, the Company transitioned from
   the parallel exchange rate to the SITME rate and started re-measuring foreign currency
   transactions using the SITME rate published by BCV, which was 5.27 &amp;#8220;Bolivares Fuertes&amp;#8221; per
   U.S. dollar as of June&amp;#160;9, 2010.
   &lt;/div&gt;
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   &lt;div align="left" style="font-size: 10pt; margin-top: 0pt"&gt;
   &lt;b&gt;
   &lt;/b&gt;
   &lt;/div&gt;
   &lt;div style="margin-top: 0pt"&gt;
   &lt;table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt"&gt;
   &lt;tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"&gt;
   &lt;td width="3%" nowrap="nowrap" align="left"&gt;
   &lt;b&gt;
   &lt;/b&gt;
   &lt;/td&gt;
   &lt;td width="1%"&gt;&lt;/td&gt;
   &lt;td&gt;
   &lt;div style="text-align: justify"&gt;
   &lt;b&gt;
   &lt;/b&gt;
   &lt;/div&gt;
   &lt;/td&gt;
   &lt;/tr&gt;
   &lt;/table&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 0pt; margin-left: 4%"&gt;
   &lt;b&gt;
   &lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;For the period beginning on May&amp;#160;14, 2010 and ending on June&amp;#160;8, 2010 (during which there was no
   open foreign currency markets) the Company applied US GAAP guidelines, which state that if
   exchangeability between two currencies is temporarily lacking at the transaction date or
   balance sheet date, the first subsequent rate at which exchanges could be made shall be used.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Accordingly, the June&amp;#160;9, 2010 exchange rate published by the Venezuelan Central Bank has been
   used to re-measure transactions during the abovementioned period. As of December&amp;#160;31, 2010, the
   exchange rate used to re-measure transactions is 5.30 Bolivares Fuertes per US dollar.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The net investment in the Venezuelan subsidiaries, before intercompany eliminations, amounts
   to $13,715,759 and $8,914,007 as of December&amp;#160;31, 2010 and 2009.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The Company has assessed the new regulations and has concluded that, considering its effects
   as currently formulated, they should not have a material impact on the normal running of its
   business in Venezuela.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Highly inflationary status in Venezuela&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;During May&amp;#160;2009, the International Practices Task Force discussed the highly inflationary
   status of the Venezuelan economy. Historically, the Task Force has used the Consumer Price
   Index (CPI)&amp;#160;when considering the inflationary status of the Venezuelan economy.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The CPI existed since 1984. However, the CPI covered only the cities of Caracas and Maracaibo.
   Commencing on January&amp;#160;1, 2008, the National Consumer Price Index (NCPI)&amp;#160;was developed to cover
   the entire country of Venezuela. Since inflation data was not available to compute a cumulative
   three year inflation rate for the entire country solely based on the NCPI, the Company used a
   blended rate using the NCPI and CPI to calculate Venezuelan inflation rate.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The cumulative three year inflation rate as of December&amp;#160;31, 2009 was calculated using the CPI
   information for periods before January&amp;#160;1, 2008 and NCPI information for the periods after
   January&amp;#160;1, 2008. The blended CPI/NCPI three-year inflation index (23&amp;#160;months of NCPI and 13
   months of CPI) as of November&amp;#160;30, 2009 exceeded 100%. According to US GAAP, calendar year-end
   companies should apply highly inflationary accounting as from January&amp;#160;1, 2010. Therefore, the
   Company transitioned its Venezuelan operations to highly inflationary status as of January&amp;#160;1,
   2010 considering the US dollar as the functional currency.
   &lt;/div&gt;
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   &lt;b&gt;
   &lt;/b&gt;
   &lt;/div&gt;
   &lt;div style="margin-top: 0pt"&gt;
   &lt;table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt"&gt;
   &lt;tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"&gt;
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   &lt;/table&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Income and Asset Taxes&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The Company is subject to U.S. and foreign income taxes. The Company accounts for income taxes
   following the liability method of accounting which requires the recognition of deferred tax
   liabilities and assets for the expected future tax consequences of temporary differences
   between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets
   are also recognized for tax loss carryforwards. Deferred tax assets and liabilities are
   measured using enacted tax rates expected to apply to taxable income in the years in which
   those temporary differences are expected to be recovered or settled. The effect on deferred tax
   assets or liabilities of a change in tax rates is recognized in income in the period that
   includes the enactment date. A valuation allowance is recorded when, based on the available
   evidence, it is more likely than not that all or a portion of the Company&amp;#8217;s deferred tax assets
   will not be realized. The Company&amp;#8217;s income tax expense consists of taxes currently payable, if
   any, plus the change during the period in the Company&amp;#8217;s deferred tax assets and liabilities.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The Company is subject to an enacted Mexican business flat tax called &amp;#8220;Impuesto Empresarial a
   Tasa Unica&amp;#8221; (&amp;#8220;IETU&amp;#8221;). The IETU is a cash-basis income tax which rate is 17.5%. The Company pays
   the higher of IETU or income tax. The effect of IETU has been included in the income / asset
   tax expense line for the year ended December&amp;#160;31, 2010, 2009 and 2008 for approximately $nil,
   $468,211 and $807,407.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;From fiscal year 2008 to fiscal year 2018, the Company&amp;#8217;s Argentine subsidiary is a beneficiary
   of a software development law. Part of the benefits obtained from being a beneficiary of the
   aforementioned law is a relief of 60% of total income tax determined in each year, during these
   10&amp;#160;years. Aggregate tax relief totaled $4,533,039 and $2,772,569 for the years ended December
   31, 2010 and 2009, respectively. Aggregate per share effect of the Argentine tax holiday
   amounts to $0.10 and $0.06 for the year ended December&amp;#160;31, 2010 and 2009, respectively. If the
   Company had not been granted the Argentine tax holiday, the
   Company would have pursued an alternative tax planning strategy and, therefore, the impact of
   not having this particular benefit would not necessarily be the abovementioned dollar and per
   share effect.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;As of December&amp;#160;31, 2010 and 2009, MercadoLibre, Inc has included in the non-current deferred
   tax assets line the foreign tax credits related to the dividend distributions received from its
   subsidiaries for a total amount of $2,436,224 and $2,879,999, respectively. Those foreign tax
   credits will be used to offset the future domestic income tax payable.
   &lt;/div&gt;
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   &lt;b&gt;
   &lt;/b&gt;
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   &lt;table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt"&gt;
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   &lt;b&gt;
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   &lt;div style="text-align: justify"&gt;
   &lt;b&gt;
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   &lt;/table&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Uncertainty in Income Taxes&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;On January&amp;#160;1, 2007 the Company adopted the accounting guidance on the accounting for
   uncertainty in income taxes. This guidance prescribes a more likely than not recognition
   threshold and measurement attribute for the financial statement recognition and measurement of
   an income tax position taken or expected to be taken in a tax return. It also provides guidance
   on de-recognition, classification of a liability for unrecognized tax benefits, accounting for
   interest and penalties, accounting in interim periods, and expanded income tax disclosures. The
   adoption of the new accounting guidance had no significant impact on the Company&amp;#8217;s consolidated
   financial statements.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The Company is subject to taxation in the U.S. and various foreign jurisdictions. The material
   jurisdictions that are subject to examination by tax authorities for tax years after 2003
   primarily include the U.S., Argentina, Brazil, Mexico and Venezuela.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Recent Accounting Pronouncements&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Accounting for stock-based compensation&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;On April&amp;#160;16, 2010, the FASB issued an amendment to the accounting of stock-based compensation
   related to the effect of Denominating the Exercise Price of a Share-Based Payment Award in the
   Currency of the Market in Which the Underlying Equity Security Primarily Trades. The amendment
   clarifies that a share-based payment award with an exercise price denominated in the currency
   of a market in which a substantial portion of the entity&amp;#8217;s equity securities trades must not be
   considered to contain a market, performance, or service condition. Therefore, an entity should
   not classify such an award as a liability if it otherwise qualifies for classification in
   equity. The new accounting guidance is effective for interim and annual periods beginning on or
   after December&amp;#160;15, 2010, and will be applied prospectively. Management estimates that the
   implementation of the new accounting guidance will not have significant effect on the company&amp;#8217;s
   financial statements.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;b&gt;Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit
   Losses&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;On July&amp;#160;21, 2010, the FASB issued an amendment to disclosures about the credit quality of
   financial receivables and the allowances for credit losses by requiring more robust and
   disaggregated disclosures about the credit quality of an entity&amp;#8217;s financing receivables and its
   allowance for credit losses. The objective of enhancing these disclosures is to improve
   financial statement users&amp;#8217; understanding of (1)&amp;#160;the nature of an entity&amp;#8217;s credit risk
   associated with its financing receivables and (2)&amp;#160;the entity&amp;#8217;s assessment of that risk in
   estimating its allowance for credit losses as well as changes in the allowance and the reasons
   for those changes. The new and amended disclosures that relate to information as of the end of
   a reporting period will be effective for the first interim or annual reporting periods ending
   on or after December&amp;#160;15, 2010. The disclosures that include information for activity that
   occurs during a reporting period will be effective for the first interim or annual periods
   beginning
   after December&amp;#160;15, 2010. Those disclosures include (1)&amp;#160;the activity in the allowance for credit
   losses for each period and (2)&amp;#160;disclosures about modifications of financing receivables.
   Management estimates that there will be no significant effect on the company&amp;#8217;s financial
   statements.
   &lt;/div&gt;
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   &lt;b&gt;
   &lt;/b&gt;
   &lt;/div&gt;
   &lt;/div&gt;
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 -Publisher AICPA
 -Name Accounting Principles Board Opinion (APB)
 -Number 22
 -Paragraph 8

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