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eBay: The Internet’s Auction Leader
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eBay: The Internet’s Auction Leader

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  • Active users are those that have bid, bought, or listed an item within the previous 12-month period
  • Transcript

    • 1. eBay: The Internet’s Auction Leader By: Rachel Taylor Zach Evans
    • 2. Brief History of Auctions
      • Babylon 500 B.C. – women were auctioned on the condition that they be married
      • Ancient Rome – bids were not called out in the open but through ‘discrete’ actions such as a wink or wave
      • Reference in Oxford English Dictionary of auctions taking place in Great Britain in 1595
      • Sotheby’s is founded in 1744
      • Christie’s is founded in 1766
      • Auctions migrated to America and were used to liquidate goods at the end of a season
    • 3. Company Overview
      • Founded in September 1995
      • 2003 Employees: 6,200 (annual growth: 55.0%)
      • Mission: “…to provide a global trading platform where practically anyone can trade practically anything.”
      • International sites that serve: Australia, Austria, Belgium, Canada, France, Germany, Ireland, Italy, Korea, the Netherlands, New Zealand, Singapore, Spain, Sweden, Switzerland, Taiwan, and the U.K.
      • Has investments in Latin America and China through MercadoLibre.com and EachNet
    • 4. Unique Characteristics
      • “ eBay [is] running an enterprise unique to the Internet rather than trying to improve upon a business you could successfully plant in a strip mall.”
      • “ The reason for eBay’s success is that it has taken on the same role that the government plays in the broader economy: setting the rules for commerce and enforcing them so that transactions are cheap, fair and predictable.”
    • 5. Corporate Management
      • Pierre Omidyar – Founder & Chairman of the Board
      • Meg Whitman – President & CEO
      • Maynard Webb – COO
      • Rajiv Dutta – CFO
      • Jeff Jordan – Senior VP, U.S. Business
      • William Cobb – Senior VP, International
      • Matthew Bannick – Senior VP, Global Online Payments
      • Mike Jacobson – Senior VP, Legal Affairs, General Counsel & Secretary
    • 6. Top Competitors
    • 7. Visitor Metrics – March/April 2004
      • 23,638,000 visitors from work
        • #6 ranking
        • Just behind the U.S. Government
      • 45,369,000 visitors from home
        • #5 ranking
        • Just behind Google and in front of the U.S. Government
      • #1 electronics site
      • #1 home and garden site
      • #1 clothing, shoes & accessories site
    • 8. Financial Performance
    • 9. Revenue Sources
    • 10. Users (millions)
    • 11. Merchandise Listings (millions)
    • 12. Merchandise Sales (millions)
    • 13. Fees
      • For the Seller
        • $0.30 to $4.80 insertion fee
        • $1.00 to $100.00 for reserve price
        • $0.15 to $1.00 for additional pictures
        • Closing Value fee
          • $0 – $25 : up to $1.31
          • $25 - $1,000 : up to $28.12
          • Over $1,000 : $28.12 for first $1,000 in value plus additional 1.50% of balance > $1,000.01
        • Other listing fees
      • For the Buyer
        • There are no fees associated with setting up an account
        • Buyers only pay the price of the auctions then win
    • 14. Feedback Forums
      • Keeps levels of trust among users high
      • Adds to sense of community
      • Increases (perceived) switching costs
        • Users are less likely to use another auction provider because they would have to start over again
    • 15. eBay Oddities
      • User attempted to sell one of their kidneys
        • Auction read “Buyer pays all transplant and medical costs.”
        • Turned out to be a hoax
      • eBay pulled the underwear category after users found ‘attractive’ individuals offering dirty and sweaty (or worse) garments
        • Sellers tried to get around regulations by offering to ‘customize’ their wares
      • Other fraudulent offerings:
        • Right to witness an execution
        • Triplets
        • A young man’s virginity
    • 16. ‘Do it eBay’ Ad Campaign
      • Late 2002 eBay returned to TV advertising for first time in two years
      • Campaign cost: $15 million
      • Campaign purpose: to break into the retail mainstream
    • 17. Questions?
      • Why do you think eBay has been as successful as they have?
      • Do you think buying something on eBay can have a negative effect on its perceived value?
      • Do you think that ‘eBayers’ have always existed or do you think that eBay has created a new way of thinking online?

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