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 An Assignment on

 A BRIEF STUDY ONEBAY

Submitted in Partial Fulfllment o E-Marketing Course

By:Faizan Kan

Sera! Aama"M" Soai# Kan$i%au""in Kan

To:Dr& Asi' A(i S%e"

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Executive Summary

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

eBay.com, an online auction and shopping website in which people and businesses

 buy and sell a broad variety of goods and services worldwide. Founded in 199,

eBay is one of the notable success stories of the dot-com bubble! it is now a multi-

 billion dollar business with operations locali"ed in over thirty countries. eBay

e#panded from its original $set-time$ auction format to include $Buy It %ow$

standard shopping! shopping by &'(, I)B%, or other *ind of )+& via alf.com!

online classified advertisements via +i/i/i or eBay (lassifieds! online event tic*et

trading via )tubub! online money transfers via 'ay'al and other services. In

August 09, eBay Inc. formed a partnership with 2eneral 3otors enabling

hundreds of 23 dealers in (alifornia to help consumers negotiate purchase of new

23 cars and truc*s through the eBay online mar*etplace. Its mar*etplace

transformed the Internet and the way many of us shop and do business worldwide.

eBay4s mar*etplace, or 5mar*etspace6 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.

http://en.wikipedia.org/wiki/Internethttp://en.wikipedia.org/wiki/Consumer-to-consumerhttp://en.wikipedia.org/wiki/Online_auction_business_modelhttp://en.wikipedia.org/wiki/Websitehttp://en.wikipedia.org/wiki/Dot-com_bubblehttp://en.wikipedia.org/wiki/Universal_Product_Codehttp://en.wikipedia.org/wiki/ISBNhttp://en.wikipedia.org/wiki/Stock_Keeping_Unithttp://en.wikipedia.org/wiki/Half.comhttp://en.wikipedia.org/wiki/Kijijihttp://en.wikipedia.org/wiki/StubHubhttp://en.wikipedia.org/wiki/PayPalhttp://en.wikipedia.org/wiki/Internethttp://en.wikipedia.org/wiki/Consumer-to-consumerhttp://en.wikipedia.org/wiki/Online_auction_business_modelhttp://en.wikipedia.org/wiki/Websitehttp://en.wikipedia.org/wiki/Dot-com_bubblehttp://en.wikipedia.org/wiki/Universal_Product_Codehttp://en.wikipedia.org/wiki/ISBNhttp://en.wikipedia.org/wiki/Stock_Keeping_Unithttp://en.wikipedia.org/wiki/Half.comhttp://en.wikipedia.org/wiki/Kijijihttp://en.wikipedia.org/wiki/StubHubhttp://en.wikipedia.org/wiki/PayPal

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7ith more than 98 million active users globally as of 0 011, eBay is the

world:s largest online mar*etplace, where practically anyone can buy and sell

 practically anything.

In the Business segments presented in the case first is the 3ar*etplaces, 'latforms,

and services which includes eBay.com, )tudub, ;nline (lassifields, ;nline

Advertising, )hopping.com, and

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eBay4s (ompetitors includes online and offline retailers, distributors, li@uidators,

import and e#port 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 networ*s.

Its conomic (limate which composes of a wea* global economic conditions, in

addition to the mortgage and worldwide credit related financial crisis, are e#pected

to limit revenue growth, particularly in the 3ar*etplaces segment, which is closely

tied to consumer purchase patterns.

eBay Inc has its own 'olitical and >egal environments which includes )ales =a#

and other =a#es, >ong tern (ontractual ;bligations, 'irated or (ounterfeited items

and )ecurity Breach and Identity =heft.

eBay4s challenges e#pansion of both in the &nited )tates and internationally has

 placed a significant strain on management, operations, and financial resources.

'articular areas that are strained include 7ebsite &sability were in growth in the

number of products and 7eb site features has caused the site to become less user 

friendly, 7ebsite )tability were in increased volume and greater comple#ity

re@uires additional e#pensive investments in hardware, software and personnel,

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(ustomer 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 (ustomer )upport were in it is challenges from greater 

trade activity and an increased number of users and provide good after service.

eBay4s 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

world4s number one mar*etplace.

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Background/ History

It all began with 'e" (andy. ;ne evening in )eptember 199, 'ierre ;midyar, the

founder of eBay, and his wife were discussing their desire to contact other 'e"

collectors. =o solve the problem he created an online auction in the form of a sole

 proprietorship business. As a result, eBay was created over the >abor Cay wee*end

 by 'ierre, a computer programmer, who devised a code that enabled and ran the

eBay auction 7eb site from his home computer. >ater in 3ay 199D, eBay was

incorporated in (alifornia and became public on )eptember 0E, 199. =he first

eBay auction was also conducted on >abor Cay. As of 0, eBay has a 1E percent

share in the global e-commerce with D.? million active users.

;n >abor Cay wee*end in 199, computer programmer 'ierre ;midyar wrote the

code for what he called an $e#periment$ 7hat would happen if everyone in the

world had e@ual access to a single global mar*etplaceG 'ierre tested his new

auction website by posting a bro*en laser pointer, which he was about to throw

away. And to his surprise, a collector bought it for H1E.?. =he sale of a bro*en

laser pointer was the beginning of a radical transformation in commerce.

eBay is a remar*ably efficient mar*et created by connecting individuals who

wouldn:t otherwise be connected. It was the world:s first e#ample of online social

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networ*ing. 7hile s*eptics @uestioned whether people would trust doing business

with strangers online, 'ierre firmly believed that people are basically good, and

that any issues would wor* themselves out by the community. )ince then, eBay has

grown to have a presence in ?9 mar*ets including partnerships and investments

with more than 9 million eBay.com users worldwide, trading more than H1,9

worth of goods each second. In 00, the eBay community made it clear that they

 preferred using 'ay'al as an online payment method. )o eBay ac@uired 'ay'al,

which brought new efficiencies to e-commerce and redefined possibilities for 

eBay:s future.

=he company has since e#panded by ac@uiring innovative businesses, such as

)hopping.com, )tubub, Bill 3e >ater and others, which have positioned the

company as the global leader in e-commerce and payments.

Building on 'ierre:s entrepreneurial legacy, eBay continues to passionately believe

in the potential of technology to connect people around the world.

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contacted the winning bidder to as* if he understood that the laser pointer was

 bro*en. In his responding email, the buyer e#plained $I:m a collector of bro*en

laser pointers.$ =he fre@uently repeated story that eBay was founded to help

;midyar:s fiance trade 'e" candy dispensers was fabricated by a public

relations manager in 1998 to interest the media, which were not interested in the

company:s previous e#planation about wanting to create a $ perfect mar*et$.  =his

was revealed in Adam (ohen:s 00 boo*, =he 'erfect )tore, and confirmed by

eBay. (hris Agarpao was hired as eBay:s first employee and Jeffrey )*oll was

hired as the first president of the company in early 199D. In %ovember 199D, eBay

entered into its first third-party licensing deal, with a company called lectronic

=ravel Auction to use )mart3ar*et =echnology to sell plane tic*ets and other 

travel products. 2rowth was phenomenal! in January 1998 the site hosted

0,, auctions, compared with 0, during the whole of 199D. =he

company officially changed the name of its service from Auction7eb to eBay in

)eptember 1998. ;riginally, the site belonged to cho Bay =echnology 2roup,

;midyar:s consulting firm. ;midyar had tried to register the domain name

echobay.com, but found it already ta*en by the cho Bay 3ines, a gold mining

company, so he shortened it to his second choice, eBay.com.

In 1998, the company received HD.8 million in funding from the venture capital

firm Benchmar* (apital. 3eg 7hitman was hired as eBay 'resident and (; in

http://en.wikipedia.org/wiki/Pezhttp://en.wikipedia.org/wiki/Public_relationshttp://en.wikipedia.org/wiki/Public_relationshttp://en.wikipedia.org/wiki/Perfect_markethttp://en.wikipedia.org/wiki/Jeffrey_Skollhttp://en.wikipedia.org/wiki/Echo_Bay_Mineshttp://en.wikipedia.org/wiki/Benchmark_Capitalhttp://en.wikipedia.org/wiki/Meg_Whitmanhttp://en.wikipedia.org/wiki/Pezhttp://en.wikipedia.org/wiki/Public_relationshttp://en.wikipedia.org/wiki/Public_relationshttp://en.wikipedia.org/wiki/Perfect_markethttp://en.wikipedia.org/wiki/Jeffrey_Skollhttp://en.wikipedia.org/wiki/Echo_Bay_Mineshttp://en.wikipedia.org/wiki/Benchmark_Capitalhttp://en.wikipedia.org/wiki/Meg_Whitman

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3arch 199. At the time, the company had ? employees, half a million users and

revenues of HE.8 million in the &nited )tates. eBay went public on )eptember 01,

199, and both ;midyar and )*oll became instant billionaires. eBay:s target share

 price of H1 was all but ignored as the price went to H?. on the first day of 

trading. As the company e#panded product categories beyond collectibles into

almost any saleable item, business grew @uic*ly. In February 00, the company

 purchased IBa"ar, a similar uropean auction web site founded in 199 and then

 bought 'ay'al on ;ctober 1E, 00.

In early 0, the company had e#panded worldwide, counted hundreds of 

millions of registered users, 1,K employees and revenues of almost H8.8

 billion. After nearly ten years at eBay, 7hitman made the decision to enter politics.

;n January 0?, 0 the company announced that 7hitman would step down on

3arch ?1, 0 and John Conahoe was selected to become 'resident and

(;. 7hitman remained on the Board of Cirectors and continued to advise

Conahoe through 0. 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. eBay4s success is sustain through communications and trust.

http://en.wikipedia.org/wiki/PayPalhttp://en.wikipedia.org/wiki/John_Donahoehttp://en.wikipedia.org/wiki/PayPalhttp://en.wikipedia.org/wiki/John_Donahoe

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Vision, Mission, Objectives and Strategies

Vision ! Mission

7e intend to achieve our mission of creating the world4s online mar*etplace by

improving and e#panding across three main areas categories, formats, and

geographies 0 annual report

7e intend to achieve our mission of creating the world4s leading e-commerce

franchise by building upon our core 3ar*etplaces business and building our 

ad/acent businesses. 0D Annual report

7e intend to continue to wor* toward our mission of creating the world4s leading

e-commerce franchise by investing in our core 3ar*etplaces segment and

continuing to build our ad/acent 3ar*etplaces businesses. Based on 08 Annual

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5Bay allows customers to create individual auctions and online stores in order to

sell used and new products. =his process is facilitated by the ability to create

communities of interest, providing secure transaction services and a peer review

 process in a global environment.6

=herefore eBay sees itself as a facilitator for product-related transactions over the

Internet. =his particular statement describes the company4s main processes and

shows the opportunities eBay wants to pursue.

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"roduct mix

• PayPal is an online transaction business allowing payments

and fnancial transers to be made through the internet.

PayPal is an alternative to oine transaction methods such

as checks and money orders.

• eBay oers a marketplaces or the sale o goods and

services. It also provides online payment and communication

services to individuals and businesses.

• Products on sale at Ebay include millions o collectibles

d!cor appliances computers urnishings e"uipment

vehicles and other miscellaneous items are listed bought or

sold daily.

• Bill #e $ater is an Ebay service that provides convenient and

secure payment method designed or purchasing on the web

or over the phone.• %ent.com is an Ebay subsidiary which is a frst pay&or&

perormance online rental site a business model that

outperormed competitors who went with subscriptions

listing ees or costs&per&lead revenue models 'he company

charges the property manager when a verifed lease is

produced through the site.

• (hopping.com is an online community )wned by Ebay it

provides a price comparison service and operates webpages

in the *(+ *nited ,ingdom -rance ermany and +ustralia.

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• (tub/ub is a subsiiary o Ebay which acts as an online

marketplace or buyers and sellers o tickets to sporting

concert and theater events.

• (kype is an economical communication tool owned by Ebay.

 'he company provides ree video calling ree chat with

other (kype members ree instant messaging and call to

landlines at low rates.

• /al.com is a subsidiary o Ebay Inc in which sellers oer

items at f0ed prices usually items that have a I(B1 *P2 or

database fle indicators as opposed to rare old or collectibleitems. 'he items available on hal.com are limited to

te0tbooks music movies video games and video game

consoles.

"rice mix

• Ebay Inc. recently changed some o its pricing policies

dictating dierent listing ees rom re"uent and occasional

sellers.

• EBay Inc. Every 3ay eliminated upront listing ees 4orauctions only not Buy It 1ow5 and instead charges 6&

percent o the fnal sale price up to 789.

• Ebay Inc. employs a "uality click pricing model which pays

a:liates ;by the click;

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"#acement and $romotion mix

•  'here are eBay 2oupons eBay discounts eBay

Promotional codes and an eBay bargains page at

3eal'aker.com

•  'he eBay Bucks %ewards Program gives those who use

PayPal on Ebay @A back on "ualiying purchases

participants get a rewards certifcate at the start o each

calendar "uarter or the amount o eBay Bucks they

accumulated in the previous "uarter. 'hey have =9 days tospend it on any eBay listing with PayPal.

• EBay %adio provides traders and eBay community

members with the latest in news and views rom around

the eBay world and covers ma

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httpCDDpages.ebay.comDsellerinormationDstartingDuniversity.

html.

• Ebay acilitates transactions by providing 3aily 3ealsF

which highlight discounted prices parties can sign up to

receive a 3aily 3eals +lert.

http://pages.ebay.com/sellerinformation/starting/university.htmlhttp://pages.ebay.com/sellerinformation/starting/university.htmlhttp://pages.ebay.com/sellerinformation/starting/university.htmlhttp://pages.ebay.com/sellerinformation/starting/university.html

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"eo$#e

•  Gohn G. 3onahoe is the President H 2hie E0ecutive ):cer

• Pierre )midyar is 2hairman o the 1on&E0ecutive Board

• (cott 'hompson is President o Paypal

• Bob(wan is (enior ice President

• Ebay purchases are now under a new Buyer Protection

Program which covers a buyers ull purchase price and

shipping and implemented via a new

streamlined customer service procedure.• Ebay -eedback is a procedure that lets participants

monitor their transaction reputation as an eBay member.

It>s made up o comments and ratings let by other

members you>ve bought rom and sold to.

http://www.marketingteacher.com/what-is-a-customer/http://www.marketingteacher.com/what-is-a-customer/

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Yeb+icom is an Indian ;nline shopping -commerce portal for ome, >ifestyle M

Fashion e-retailer, launched in the year 09.

.#i$kart is an e-commerce company founded in 08 by )achin Bansal and Binny

Bansal. =he company is registered in )ingapore, but has its head@uarters

in Bangalore, +arnata*a, India. Flip*art has launched its own product range under 

the name $CigiFlip$ with products including tablets, &)Bs, and laptop bags

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SO( Ana#ysis o0 eBay

O$$ortunities1

Ac@uisitions provide new business strategy opportunities

3ar*et development in new and emerging mar*ets li*e (hina and India which they are

considered as the most populated area can be a huge opportunity

3ar*et penetrationN Improve mar*et services in current mar*ets can ma*e a large number 

of potential customers to subscribers

(+reats1

)uccess attracts greater competition

Attac*s by illegal practices might happened

)ome cost li*e credit card charges cannot be easily controlled by eBay

Strengt+s1

eBay is the leading global brand for online auctions

=he company ta*es advantage of the benefits of (ustomer

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eBay has become a generic term for online auctions

eaknesses1

;pen to fraudulent activities

)ystem brea*downs could affects trading activities

B'2 Matrix

S(A&S

eBay

Ama"on.com

(lassified Advertisements

Ama"on Auctions

34ES()O5 MA&6S

>ive Auctions

'ASH 'OS

Flea 3ar*ets

uBid

7O2S

Oahoo

'utting together eBay and it4s competition, the online auction industry shows different

company types.

eBay, Ama"on.com, (lassified Ads and Ama"on auctions as a dominated mar*et share

and growth

Flea 3ar*ets and uBid as has dominated a high mar*et share but a little growth

@@

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>ive auctions as to low mar*et share which only caters the wealthy people but high

growth

Oahoo as otherwise li@uidate but delivers cash

@=

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'O5'84S)O5S

Strategic actions1

3aintain global growth initiative

• Ac@uisitions develop new mar*ets

•  %ew mar*ets

•  %ew products

• Adopt into different cultures

=echnological development

•

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B)B8)O2&A"HY

• httpNNwww.ebayinc.comNwho

• httpNNen.wi*ipedia.orgNwi*iNBay

• httpNNwww.ebayinc.comNhistory

• httpNNdigitalenterprise.orgNcasesNebay.html

•

httpsNNmm./pmorgan.comNstpNtNc.doGiPDC-18MuPaQpRdQ?189.pdfRhQ0**rpeE

en.wi*ipedia.org

• httpNNwww.ma#i-pedia.comN)'A(Kmatri#KmodelKstrategicKmanagementKmethod

• httpNNwww.ebayinc.com

• httpNNwww.valuebasedmanagement.netNmethodsQbcgmatri#.html

• httpNNwww.*ul"ic*.comNstuNImatri#.htm

• httpNNwww.mba-tutorials.comNGsPInternalK#ternalKmatri#

@8

http://www.ebayinc.com/whohttp://en.wikipedia.org/wiki/EBayhttp://www.ebayinc.com/historyhttp://digitalenterprise.org/cases/ebay.htmlhttp://www.maxi-pedia.com/SPACE+matrix+model+strategic+management+methodhttp://www.ebayinc.com/http://www.valuebasedmanagement.net/methods_bcgmatrix.htmlhttp://www.kulzick.com/stu/IEmatrix.htmhttp://www.mba-tutorials.com/?s=Internal+External+matrixhttp://www.ebayinc.com/whohttp://en.wikipedia.org/wiki/EBayhttp://www.ebayinc.com/historyhttp://digitalenterprise.org/cases/ebay.htmlhttp://www.maxi-pedia.com/SPACE+matrix+model+strategic+management+methodhttp://www.ebayinc.com/http://www.valuebasedmanagement.net/methods_bcgmatrix.htmlhttp://www.kulzick.com/stu/IEmatrix.htmhttp://www.mba-tutorials.com/?s=Internal+External+matrix