An Assignment on

A BRIEF STUDY ON
EBAY

Submitted in Partial Fulfillment of EMarketing Course

By:
Faizan Khan
Seraj Ahamad
Md Shoaib Khan
Ziyauddin Khan

To:
Dr. Asif Ali Syed

Executive Summary

eBay Inc. is an American internet consumer-to-consumer corporation that manages

[Link], an online auction and shopping website in which people and businesses
buy and sell a broad variety of goods and services worldwide. Founded in 1995,
eBay is one of the notable success stories of the dot-com bubble; it is now a multibillion dollar business with operations localized in over thirty countries. eBay
expanded from its original "set-time" auction format to include "Buy It Now"
standard shopping; shopping by UPC, ISBN, or other kind of SKU (via [Link]);
online classified advertisements (via Kijiji or eBay Classifieds); online event ticket
trading (via StubHub); online money transfers (via PayPal) and other services. In
August 2009, eBay Inc. formed a partnership with General Motors enabling
hundreds of GM dealers in California to help consumers negotiate purchase of new
GM cars and trucks through the eBay online marketplace. Its marketplace
transformed the Internet and the way many of us shop and do business worldwide.
eBays marketplace, or marketspace is an online virtual trading platform for the
sale of goods and services by a community of users that comprises individual
buyers and sellers, as well as small business owners. eBay also provides auctions
where it determines the price of items sold.

With more than 97 million active users globally (as of Q2 2011), eBay is the
world's largest online marketplace, where practically anyone can buy and sell
practically anything.
In the Business segments presented in the case first is the Marketplaces, Platforms,
and services which includes [Link], StudHub, Online Classifields, Online
Advertising, [Link], and [Link]. Through a trusted online community
facilitating trading with unknown partners on the Internet, eBay Inc. provides a
trusted and safe trading environment by offering services which enables the
consumers to be at ease in doing trading with eBay. The second segment is the
Payments which is composed by PayPal and Bill Me Later transaction services.
These services is available to any online or offline individual or business with an email address and allows members to transact online. The third segment is the
Communications which is composed of Skype, which was founded in 2003 and
acquired by eBay in 2005. It is the worlds fastest-growing Internet
Communication software platform. Although there is a risk with Bill me Later even
though its accounts are funded by CITI Bank, it is responsible for all functions
related to the account. It initially funds consumers loans using cash from business
activities and a line of credit. So it must find potential consumers that will really
pay credits, because Future profitability depends on its consumers.

eBays Competitors includes: online and offline retailers, distributors, liquidators,

import and export companies, online and offline auctioneers, catalog and mail
order companies, classifieds, directories, search engines, products of search
engines, virtually all online and offline commerce participants (consumer to
consumer, business to consumer and business to business), and online and offline
shopping channels and networks.
Its Economic Climate which composes of a weak global economic conditions, in
addition to the mortgage and worldwide credit related financial crisis, are expected
to limit revenue growth, particularly in the Marketplaces segment, which is closely
tied to consumer purchase patterns.
eBay Inc has its own Political and Legal environments which includes Sales Tax
and other Taxes, Long tern Contractual Obligations, Pirated or Counterfeited items
and Security Breach and Identity Theft.
eBays challenges expansion of both in the United States and internationally has
placed a significant strain on management, operations, and financial resources.
Particular areas that are strained include Website Usability were in growth in the
number of products and Web site features has caused the site to become less user
friendly, Website Stability were in increased volume and greater complexity
requires additional expensive investments in hardware, software and personnel,

Customer Account Billing were in transaction processing and revenue collection

becomes more difficult as the number of transactions increase and consumers
default on loans and lastly Customer Support were in it is challenges from greater
trade activity and an increased number of users and provide good after service.
eBays Future is anything but certain. It may need further analysis and needs a
clear and well clear strategic pla to achieve its mission and vision to become the
worlds number one marketplace.

Background/ History

It all began with Pez Candy. One evening in September 1995, Pierre Omidyar, the
founder of eBay, and his wife were discussing their desire to contact other Pez
collectors. To solve the problem he created an online auction in the form of a sole
proprietorship business. As a result, eBay was created over the Labor Day weekend
by Pierre, a computer programmer, who devised a code that enabled and ran the
eBay auction Web site from his home computer. Later in May 1996, eBay was
incorporated in California and became public on September 24, 1998. The first
eBay auction was also conducted on Labor Day. As of 2008, eBay has a 14 percent
share in the global e-commerce with 86.3 million active users.
On Labor Day weekend in 1995, computer programmer Pierre Omidyar wrote the
code for what he called an "experiment": What would happen if everyone in the
world had equal access to a single global marketplace? Pierre tested his new
auction website by posting a broken laser pointer, which he was about to throw
away. And to his surprise, a collector bought it for $14.83. The sale of a broken
laser pointer was the beginning of a radical transformation in commerce.
eBay is a remarkably efficient market created by connecting individuals who
wouldn't otherwise be connected. It was the world's first example of online social

networking. While skeptics questioned whether people would trust doing business
with strangers online, Pierre firmly believed that people are basically good, and
that any issues would work themselves out by the community. Since then, eBay has
grown to have a presence in 39 markets (including partnerships and investments)
with more than 90 million [Link] users worldwide, trading more than $1,900
worth of goods each second. In 2002, the eBay community made it clear that they
preferred using PayPal as an online payment method. So eBay acquired PayPal,
which brought new efficiencies to e-commerce and redefined possibilities for
eBay's future.
The company has since expanded by acquiring innovative businesses, such as
[Link], StubHub, Bill Me Later and others, which have positioned the
company as the global leader in e-commerce and payments.
Building on Pierre's entrepreneurial legacy, eBay continues to passionately believe
in the potential of technology to connect people around the world. Read more
about our global portfolio of businesses and how we continue to support
entrepreneurship.
Founder Pierre Omidyar as part of a larger personal site that included, among other
things, Omidyar's own tongue-in-cheek tribute to the Ebola virus. One of the first
items sold on eBay was a broken laser pointerfor $14.83. Astonished, Omidyar

contacted the winning bidder to ask if he understood that the laser pointer was
broken. In his responding email, the buyer explained: "I'm a collector of broken
laser pointers." The frequently repeated story that eBay was founded to help
Omidyar's fiance trade Pez candy dispensers was fabricated by a public
relations manager in 1997 to interest the media, which were not interested in the
company's previous explanation about wanting to create a "perfect market". This
was revealed in Adam Cohen's 2002 book, The Perfect Store, and confirmed by
eBay. Chris Agarpao was hired as eBay's first employee and Jeffrey Skoll was
hired as the first president of the company in early 1996. In November 1996, eBay
entered into its first third-party licensing deal, with a company called Electronic
Travel Auction to use SmartMarket Technology to sell plane tickets and other
travel products. Growth was phenomenal; in January 1997 the site hosted
2,000,000 auctions, compared with 250,000 during the whole of 1996. The
company officially changed the name of its service from AuctionWeb to eBay in
September 1997. Originally, the site belonged to Echo Bay Technology Group,
Omidyar's consulting firm. Omidyar had tried to register the domain name
[Link], but found it already taken by the Echo Bay Mines, a gold mining
company, so he shortened it to his second choice, [Link].
In 1997, the company received $6.7 million in funding from the venture capital
firm Benchmark Capital. Meg Whitman was hired as eBay President and CEO in

March 1998. At the time, the company had 30 employees, half a million users and
revenues of $4.7 million in the United States. eBay went public on September 21,
1998, and both Omidyar and Skoll became instant billionaires. eBay's target share
price of $18 was all but ignored as the price went to $53.50 on the first day of
trading. As the company expanded product categories beyond collectibles into
almost any saleable item, business grew quickly. In February 2002, the company
purchased IBazar, a similar European auction web site founded in 1995 and then
bought PayPal on October 14, 2002.
In early 2008, the company had expanded worldwide, counted hundreds of
millions of registered users, 15,000+ employees and revenues of almost $7.7
billion. After nearly ten years at eBay, Whitman made the decision to enter politics.
On January 23, 2008 the company announced that Whitman would step down on
March 31, 2008 and John Donahoe was selected to become President and
CEO. Whitman remained on the Board of Directors and continued to advise
Donahoe through 2008. eBay, being the first virtual online business community,
empowers entrepreneurial individuals to become e-commerce business owners,
which offers a sense of community to both buyers and sellers that is sustained by
communication and high transaction rates on a wide selection of products,goods
and services. eBays success is sustain through communications and trust.

Vision, Mission, Objectives and Strategies.

Vision & Mission

We intend to achieve our mission of creating the worlds online marketplace by
improving and expanding across three main areas: categories, formats, and
geographies (2005 annual report)
We intend to achieve our mission of creating the worlds leading e-commerce
franchise by building upon our core Marketplaces business and building our
adjacent businesses. (2006 Annual report)
We intend to continue to work toward our mission of creating the worlds leading
e-commerce franchise by investing in our core Marketplaces segment and
continuing to build our adjacent Marketplaces businesses. (Based on 2007 Annual
Report).
Objectives
Based on the Vision Mission eBays plan is to expand in main areas: categories,
formats, communications, services and marketplace (geography).
Strategies
The strategic statement that best describes eBays activities could be formulated as
follows:

EBay allows customers to create individual auctions and online stores in order to
sell used and new products. This process is facilitated by the ability to create
communities of interest, providing secure transaction services and a peer review
process in a global environment.
Therefore eBay sees itself as a facilitator for product-related transactions over the
Internet. This particular statement describes the companys main processes and
shows the opportunities eBay wants to pursue.

Product mix
PayPal is an online transaction business allowing payments
and financial transfers to be made through the internet.
PayPal is an alternative to offline transaction methods such
as checks and money orders.
eBay offers a marketplaces for the sale of goods and
services. It also provides online payment and communication
services to individuals and businesses.
Products on sale at Ebay include millions of collectibles,
dcor, appliances, computers, furnishings, equipment
vehicles and other miscellaneous items are listed, bought, or
sold, daily.
Bill Me Later is an Ebay service that provides convenient and
secure payment method designed for purchasing on the web
or over the phone.
[Link] is an Ebay subsidiary which is a first pay-forperformance online rental site, a business model that
outperformed competitors who went with subscriptions,
listing fees, or costs-per-lead revenue models The company
charges the property manager when a verified lease is
produced through the site.
[Link] is an online community Owned by Ebay it
provides a price comparison service and operates webpages
in the USA, United Kingdom, France, Germany and Australia.

 StubHub is a subsiiary of Ebay which acts as an online

marketplace for buyers and sellers of tickets to sporting,
concert and theater events.
Skype is an economical communication tool owned by Ebay.
The company provides free video calling , free chat with
other Skype members, free instant messaging and call to
landlines at low rates.
[Link] is a subsidiary of Ebay, Inc in which sellers offer
items at fixed prices, usually items that have a ISBN, UPC or
database file indicators as opposed to rare, old or collectible
items. The items available on [Link] are limited to
textbooks, music, movies, video games, and video game
consoles.

Price mix
Ebay, Inc. recently changed some of its pricing policies,
dictating different listing fees from frequent and occasional
sellers.
EBay, Inc. Every Day eliminated upfront listing fees (for
auctions only, not Buy It Now), and instead charges 9percent of the final sale price, up to $50.
Ebay, Inc. employs a quality click pricing model which pays
affiliates "by the click", just like AdSense.

 Sellers are charged when an item is listed on eBay a

nonrefundable Insertion Fee is charged, which ranges
between 30 cents and $3.30, depending on the sellers
opening bid on the item.
Sellers pay a fee for additional listing options to promote
the item, such as highlighted or bold listing.
A final sale price fee is charged to a seller at the end of an
auction. This fee generally ranges from 1.25% to 5% of the
final sale price.

Placement and promotion mix

There are eBay Coupons, eBay discounts, eBay
Promotional codes, and an eBay bargains page at
[Link]
The eBay Bucks Rewards Program gives those who use
PayPal on Ebay 2% back on qualifying purchases
participants get a rewards certificate at the start of each
calendar quarter for the amount of eBay Bucks they
accumulated in the previous quarter. They have 30 days to
spend it on any eBay listing with PayPal.
EBay Radio provides traders and eBay community
members with the latest in news and views from around
the eBay world and covers major eBay events like the
annual Ebay Live Conference.

Place
Participants who list an item on eBay, are charged an
insertion fee. If the item sells, youre also charged a final
value fee. The basic cost of selling an item is the insertion
fee plus the final value fee. The basic fee structure
depends on the type of listingauction-style or fixed price
formatyou use.
Ebay provides helpful information to facilitate the use of its
services at Ebay University

[Link]
html.
Ebay facilitates transactions by providing Daily Deals
which highlight discounted prices parties can sign up to
receive a Daily Deals Alert.

People
John J. Donahoe is the President & Chief Executive Officer
Pierre Omidyar is Chairman of the Non-Executive Board
Scott Thompson is President of Paypal
BobSwan is Senior Vice President
Ebay purchases are now under a new Buyer Protection
Program which covers a buyers full purchase price and
shipping and implemented via a new
streamlined customer service procedure.
Ebay Feedback is a procedure that lets participants
monitor their transaction reputation as an eBay member.
Its made up of comments and ratings left by other
members youve bought from and sold to.

MAJOR COMPETITIORS

[Link] is an American international electronic commerce company with

headquarters in Seattle, Washington, United States. It is the world's largest internet
company, based on revenue and number of employees.

[Link] is an online marketplace, headquartered in New Delhi, India. The

company was started by Kunal Bahl and Rohit Bansal, in February 2010.

HomeShop18 is an online and on-air retail and distribution venture of Network 18

Group, India. HomeShop18 was launched on 9 April 2008 as India's first 24-hour
Home Shopping TV channel.

[Link] is an Indian Online shopping E-commerce portal for Home, Lifestyle &
Fashion e-retailer, launched in the year 2009.

Flipkart is an e-commerce company founded in 2007 by Sachin Bansal and Binny

Bansal. The company is registered in Singapore, but has its headquarters
in Bangalore, Karnataka, India. Flipkart has launched its own product range under
the name "DigiFlip" with products including tablets, USBs, and laptop bags

SWOT Analysis of eBay

Opportunities:
Acquisitions provide new business strategy opportunities
Market development in new and emerging markets like China and India which they are
considered as the most populated area can be a huge opportunity
Market penetration/ Improve market services in current markets can make a large number
of potential customers to subscribers

Threats:
Success attracts greater competition
Attacks by illegal practices might happened
Some cost like credit card charges cannot be easily controlled by eBay

Strengths:
eBay is the leading global brand for online auctions
The company takes advantage of the benefits of Customer Relation Management
(companys interactions with customers, clients and sales prospects)
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 eBay has become a generic term for online auctions

Weaknesses:
Open to fraudulent activities
System breakdowns could affects trading activities

BCG Matrix
STARS
eBay

QUESTION MARKS
Live Auctions

[Link]
Classified Advertisements
Amazon Auctions
CASH COWS
Flea Markets

DOGS
Yahoo

uBid

Putting together eBay and its competition, the online auction industry shows different
company types.
eBay, [Link], Classified Ads and Amazon auctions as a dominated market share
and growth
Flea Markets and uBid as has dominated a high market share but a little growth
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 Live auctions as to low market share which only caters the wealthy people but high
growth
Yahoo as otherwise liquidate but delivers cash

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CONCLUSIONS
Strategic actions:
Maintain global growth initiative
Acquisitions (develop new markets)
New markets
New products
Adopt into different cultures
Technological development
Rapid application development
Selling new applications/programs
Creating standards for the industry
Programme interface and developers programme
Security
Back up systems
Online verifications
Enhance trustee services
Online banking improvements
Enhance after sales services
Reinforcing the Marketing department

Improve image through advertising

Global branding to make eBay a generic brand

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BIBLIOGRAPHY

[Link]

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[Link]

[Link]

[Link]

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[Link]

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