Case study on eBay for UMUC class ITEC-610

1. Case Study: ebay ITEC 610 Scott Cnockeart Benjamin Muthoka Chris Lange Murdock McCormick

2. What is eBay? eBay is the largest online marketplace where local, national, and international participants can make sales and purchases. Buyers and sellers are able to use auction-style listings, or make immediate sales using the “Buy it now,” Fixed Price,” and eBay store listings.

3. eBay Background 1995 - Pierre Omidyar, In his home, created eBay and it was originally called EchoBay.com. Because the domain name was already registered, Echo was shortened to “e”, and eBay was born. March 1998 - Meg Whitman, the name we all know, joined eBay. September 1998 – eBay goes public October 2002 – eBay acquires PayPal (Mullen, 2008)

4. First item sold on eBay was…. a laser pointer…. BROKEN $14 X

5. eBay Revenue History (MSN, 2009)

6. Web Auction Competitors eBay is still a market leader in the online auction market commanding a respectable 17% online market share. (BusinessWeek, Issue 4136 ) (O’Brien and Marakas, 372)

7. Competitive Advantage Superior customer service through the use of different technologies to provide online support. E.g. chat rooms, discussion boards and automatic email response technology. Leveraging PayPal by increasing services such as the recently added iPhone application that has attracted thousands of Net shopping sites. Improved communication between buyers and sellers through Skype, which at its acquisition had a 54 million customer base. A commanding international market share especially in Europe with Germany generating a staggering $7 billion in annual sales second only to the U.S. ( O’Brien and Marakas, 2009)

8. eBay vs. Amazon

9. eBay Shortfalls A decreasing international presence especially in majors markets like China. Fierce competition from Google and Microsoft for online classifieds. Declining sales which has seen Amazon gain 5 million more visitors while eBay lost 8 million in the same time period. Claims of a non user-friendly website by online buyers. E.g. better search results from Google. A time consuming and exhaustive vetting process that delays introduction of innovative technology into the market. Disgruntled sellers due to a new feedback system that stands to put them at a disadvantage. (BusinessWeek, Issue 4136 ) (O’Brien and Marakas, 372)

10. Current Business Practices (eBay Inc., n.d.) eBay has positioned itself to be the worlds largest online marketplace. The company has a presence in 39 markets, the US included Almost 1 billion users worldwide eBay has forever changed the idea of internet commerce

13. Accompanying Services Paypal online payment service Built on our current financial system of banks and credit cards Secure method to send and receive online payments effectively Payment solutions global leader Accepted by millions of merchants worldwide Currently utilized on and off eBay (eBay Inc., n.d.)

14. Accompanying Services cont. Rent.com, apartment listing guide Online Classifieds Information on apt. availability and rates, roommates, virtual tours, moving services Online Classifieds People meet, share ideas, and trade locally Available in hundreds of cites and regions globally Gumtree.com, Kijiji, LoQUo.com, Intoko, Netherlands; Marktplaats.nl, German auto ads; mobile.de (eBay Inc., n.d.)

15. Business Challenges Users find eBay online auctions cumbersome Competitors are breaking into online classifieds markets, providing free services searchable by location: Google Base Microsoft’s Windows Live Expo eBay lost China’s market due to TaoBao; a company that allowed for more of a consumer to consumer approach to eCommerce (O’Brien & Marakas, 372) (Xiaojuan & Davison, 145-148)

16. Potential Solutions 1) eBay could continue to make acquisitions1 eBay currently has a 25% stake in Craigslist eBay has acquired online classifieds sites: Kijiji Gumtree LoQUo eBay completed acquisition of Skype in 2005 in an attempt to link buyers and sellers quickly and easily 2) eBay could continue to go global2 eBay has already expanded globally to over 22 countries 1: (O’Brien & Marakas, 372-373) 2: (Komiak, Komiak, Imhof, 187-204)

17. Potential Solutions (continued) 3) Incorporate PayPal into Craigslist 4) Incorporate more on-site advertising and make eBay item postings free (O’Brien & Marakas, 372-373)

18. Analysis of Solutions Based on a scale from 1-10; 10 being best

19. Recommendation For eBay to truly compete with the new products developed by Microsoft and Google, they need to take a proactive approach and allow users to post products for little or no money These costs can be recouped through the use of site advertising

20. References eBay inc. (n.d.). The eBay Company. Retrieved August 1, 2009, from http://pages.ebay.com: http://pages.ebay.com/aboutebay/thecompany/companyoverview.html eBay inc. (n.d.). How eBay works. Retrieved August 1, 2009, from http://pages.ebay.com: http://pages.ebay.com/help/account/questions/about-ebay.html Komiak, P., Komiak, S. Y. X., & Imhof, M. (2008). Conducting International Business at eBay: The Determinants of Success of e-Stores. Electronic Markets, 18, 187-204. Retrieved July 31, 2009 from Business Source Complete database. Maltby, E. (October 17, 2008). R etrieved August 01, 2009 from http://money.cnn.com/2008/10/17/smallbusiness/ebay_twilight.smb/index.htm McMillan, D. (2009, J une 0 6 ). Can eBay Get Its Tech Savvy Back? BusinessWeek, 413 6, 48-49. MSN. (2009, n.d.). eBay Inc. Retrieved August 2, 2009, from http://moneycentral.msn.com: http://moneycentral.msn.com/detail/stock_quote?Symbol=ebay&getquote=Get+Quote Mullen, A. (2008, n.d.). Learn how eBay began as a small business in someone's living room and grew into one of the top earning Websites on the Internet. Retrieved August 1, 2009, from www.happynews.com: http://www.happynews.com/living/online/history-ebay.htm O’Brien, J. A. & Marakas, G. M. (2009). Management Information Systems. New York, NY: McGraw-Hill Irwin. Xiaojuan Ou, C. & Davison, R. M. (2009). Why eBay Lost to TaoBao in China: The Global Advantage. Communications of the ACM: 52, 145-148. Retrieved on June 15, 2009 from Computers and Applied Sciences Complete database.