Case Study: ebayITEC 610Scott CnockeartBenjamin MuthokaChris LangeMurdock McCormick

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.

eBay Background1995 - 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 publicOctober 2002 – eBay acquires PayPal(Mullen, 2008)

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

eBay Revenue History(MSN, 2009)

Web Auction CompetitorseBay 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)

Competitive AdvantageSuperior 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)

eBay vs. Amazon

eBay ShortfallsA 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)

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

Current PracticesConsumer benefits of eBayProvides an open trading forum for buyers and sellers to conduct businessSome sellers provide links to online stores Provides an excellent opportunity for entrepreneurs to start a small business The market controls the value of products being soldContains an extensive search databaseVirtually anything can be located via search engineAdvanced features allows more search detail(eBay Inc., n.d.)

Consumer benefits of eBay

Current Practices, cont.Consumer benefits of eBay, cont.User friendly interfaceItems of interest can be browsed using different viewsSellers provide details of selected itemsItems can be selected to watchPersonal online account creationContains recently purchased/won productsView items previously checked to watchAccess personal eBay mail from sellersExperience the excitement of the processPainless payment process via eBay owned PayPal(eBay Inc., n.d.)

Consumer benefits of eBay, cont.

Accompanying ServicesPaypal online payment serviceBuilt on our current financial system of banks and credit cardsSecure method to send and receive online payments effectivelyPayment solutions global leaderAccepted by millions of merchants worldwideCurrently utilized on and off eBay(eBay Inc., n.d.)

Accompanying Services cont.Rent.com, apartment listing guideOnline ClassifiedsInformation on apt. availability and rates, roommates, virtual tours, moving servicesOnline ClassifiedsPeople meet, share ideas, and trade locallyAvailable in hundreds of cites and regions globallyGumtree.com, Kijiji, LoQUo.com, Intoko, Netherlands; Marktplaats.nl, German auto ads; mobile.de (eBay Inc., n.d.)

Business ChallengesUsers find eBay online auctions cumbersomeCompetitors are breaking into online classifieds markets, providing free services searchable by location:Google BaseMicrosoft’s Windows Live ExpoeBay 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)

Potential Solutions1) eBay could continue to make acquisitions1eBay currently has a 25% stake in CraigslisteBay has acquired online classifieds sites:KijijiGumtreeLoQUoeBay completed acquisition of Skype in 2005 in an attempt to link buyers and sellers quickly and easily 2) eBay could continue to go global2eBay has already expanded globally to over 22 countries1: (O’Brien & Marakas, 372-373)2: (Komiak, Komiak, Imhof, 187-204)

Potential Solutions (continued)3) Incorporate PayPal into Craigslist4) Incorporate more on-site advertising and make eBay item postings free(O’Brien & Marakas, 372-373)

Analysis of SolutionsBased on a scale from 1-10; 10 being best

RecommendationFor 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

ReferenceseBay inc. (n.d.). The eBay Company. Retrieved August 1, 2009, from http://pages.ebay.com: http://pages.ebay.com/aboutebay/thecompany/companyoverview.htmleBay inc. (n.d.). How eBay works. Retrieved August 1, 2009, from http://pages.ebay.com: http://pages.ebay.com/help/account/questions/about-ebay.htmlKomiak, 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.htmMcMillan, 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+QuoteMullen, 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.htmO’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.