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Company profile

Name: Pierre Omidyar


Title: Founder and Chairman
eBay responsibilities: Oversees strategic direction and growth, model
and site development, and community advocacy

Name: Meg Whitman


Title: President and CEO
eBay responsibilities: Build a successful
business while delivering on customer needs
and expectations
Education: M.B.A., Harvard Business School.
B.A., Economics, Princeton University

Company profile

 Foundation : September 1995


 Location : San Hose , Ca USA
 Registered Users : 29.7 M ( Nov 2001)
 Employee : 1,927 (June 2001 )
 History
Sep 1995 : eBay was founded in Pierre
Omidyar’s San Jose
living Room
Feb 1998 : Meg Whitman became CEO
Sep 1998 : Nasdaq ( $ 18 per Stock )
Dec 1998 : 2.2M users , 33.7M Total items
Dec 1999 : 10.0M users, 129.6 M total items
Dec 2000 : 22.0M users, 265M items
Nov 2001 : 29.7M users
17 Global Sites (Including Korea, Japan, France
,German)

Introduction

What is eBay?
An introduction to the World's Online Marketplace
A place to buy:

EBay is a place to buy. Get nearly anything you need or want at prices better than
you can find in traditional brick-and-mortar or even online stores
A place to sell:
You can sell any thing by eBay. Anything you list on eBay will sell if you're
flexible enough about the price. EBay’s global reach can even move unusual items that
aren't in demand in your own neighborhood, turning paperweights into cash.
A place to shop:
Because of the immense variety of things that can be found for sale on eBay,
many members have discovered that eBay is one of the best places in the world to
window or comparison shop. Items listing often include photos, detailed descriptions, and
owner experiences. Because you can see lots of the same item side-by-side in various
conditions and know what each one sold or is selling for, eBay gives you insight into the
real market value or "street value" of most types of goods around the world.
A place to collect:
EBay is the world's largest marketplace for rare, discontinued, collectible, or hard-
to-find items, no matter what the type or price. Whether you're looking for turn-of-the-
century box cameras, hand-made Victorian doilies, Soviet army service medals, or 1980s
vintage arcade games, eBay will give you a better selection than just about anyone else
anywhere
A website:
There is no physical eBay store operated from several cities, eBay's service exists
entirely online, and all aspects of business other than the delivery of bought and sold
items themselves are typically handled through the eBay website.
Free for buyers and inexpensive for sellers:
It costs nothing to become an eBay member, to shop for goods, or to purchase
goods from eBay sellers. Sellers pay a minimal amount to list items for sale, and another
small percentage of the value when an item is sold. There are no monthly fees or other
hidden costs.
Green:
EBay is has proven to be a boon to the environment. Millions of tons of goods
that would otherwise go into landfills or more resource-intensive recycling programs
instead find new homes every year thanks to eBay. Some of these goods include
consumer electronics items like computer parts and mobile phones that release toxic
substances once they're discarded and exposed to the environment.

Socially responsible:
Because eBay eliminates middlemen and lowers barriers to buying and selling,
potters in rural Mexico and bead weavers in central Asia can sell hand-made goods
directly and inexpensively to a massive global audience. This brings new economic
opportunities to developing areas and increases cultural understanding between
populations. EBay has become one of the world's most interesting and exciting trans-
national ambassadors.
Like the real world in many ways:
Just as you'll encounter both honest and dishonest people in the real world, you'll
find both honest people and crooks on eBay. Thankfully, eBay's site includes a selection
of tools like the feedback system that are designed to help you to remain safe as an eBay
member.

In short, since eBay's founding in 1995 it has become the world's largest place to buy and
sell, a community of hundreds of millions of regular people, small businesses, and even
big businesses from all of the seven continents. Millions of items of every kind
imaginable, in every condition imaginable, change hands every day on eBay for prices
ranging from one cent to hundreds of thousands or even millions of dollars (or pounds, or
other forms of currency).
Mission statement:
“To provide a global trading platform where practically anyone can trade
practically anything”

History
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

The company began in the home of Pierre Omidyar is


1995 and is now a leader in Internet revenue. This company began as something like an
online garage sale in 1995 and has enjoyed steady growth over the years. Items on eBay
are listed by categories and anyone with an eBay account can bid on the item of their
choice. You can find just about anything you can possibly imagine on eBay, including
cars, real estate, collectibles, concert tickets, CDs, clothing , DVDs, and artwork. Rare
items can sell at very high prices. Things such as Elvis Presley's ashtray or rare baseball
trading cards go for top dollar. When you list an item for auction on eBay it can be seen
by millions of people all over the world.

Mr. Omidyar started eBay from his home in 1995. The first name eBay used was Echo
Bay Technology. When the company tried to register the domain name echobay.com, they
found that it was already in use. They shortened the name to eBay.com and the Website
was born. Jeff Skoll was the co-founder of this company and Harvard Business School
graduate Meg Whitman joined them in 1998. The early emphasis on eBay was the
customer. The very nature of online auctions required that strangers trust each other.
Along with growth as a site for buying and selling, eBay worked hard to make their
Website a community.

In September of 1998 eBay has its initial public stock offering. Then in April of1999, the
company bought the auction house Butterfield and Butterfield for an astounding price of
260 million dollars. In June of 1999 eBay.com went down for almost twenty-four hours.
The company's 400 employees took the time to personally call the individual sellers who
were affected by this crash and apologize for the downtime and the inconvenience it
posed to them. This made eBay a hit with the many users who frequented the site and
gave the company a very favorable outlook.

The company had some interesting auctions happen that include a human kidney that was
put up for auction in August of 1999. The bids for this auction soared to over five million
dollars before eBay intervened and pull the listing. Then in July of 2000, a rare baseball
card sold for 1.2 million dollars. This was the highest paying auction in eBay's history up
until that point. December of 2000 saw eBay beginning to self-monitor sales for
copyrighted materials. In February of 2001 an item even stranger than the kidney was put
up for public auction. A man from Seattle sold his "soul" for 400 dollars before eBay
could intervene and stop the auction. In May of 2001 eBay decided to ban the sale of any
item related to crime including letters from murders, crime scene memorabilia, and seats
to view executions.

Though the first things sold on eBay were collectibles and home items, the company
branched out to higher profile sellers like Disney and GM. These companies sell items in
the same manner as the individual sellers. The eBay community was resistant to these
changes at first but soon grew accustomed to the presence of big business hosting
auctions.

The Website Half.com was bought by eBay in 2000 and fully integrated into eBay's web
community in 2001. Half.com allows users to buy and sell items at lower rates much like
eBay but without the auction feature. In October of 2002 eBay acquired Pay pal Inc. for
1.5 billion dollars. Papal is the preferred way of making payments for eBay auctions and
is growing in popularity for other Internet uses. Papal allows a person to send or receive
money via an email address. Money in a Pay pal account can be spent on the Internet,
sent by check to the account owner, or deposited into a bank account. Paypal also offers
credit cards, debit cards, and a bill paying function.

The future of eBay looks bright. They enjoy continued growth through their many
companies and ventures. By the year 2004 eBay had earned 3.3 billion dollars in revenue.
Over 135 million people worldwide use eBay. The company hopes to further expand
operations worldwide and possibly incorporate audio and video into the auction pages.
This company takes pride in understanding what the customer wants to happen with their
company. The "Voice of the Customer" was born in 1999. This venture brings up to a
dozen loyal customers together with the company to discuss what is and what is not
working on eBay. With this kind of interaction with customers and attention to detail,
eBay should be around for a long time to come.

Marketing MIX
Products
1. antiques
2. art
3. baby
4. books
5. business& industrial
6. cameras & photos
7. cell phones $ PDA
8. clothing shoes and necessaries
9. coin & paper money
10. collectibles
11. computers & networking
12. consumers electronics
13. crafts
14. dolls & bears
15. DVD & Movies
16. eBay motors
17. entertainment memorabilia
18. gift certificates
19. health & beauty
20. home & gardens
21. jewelry & watches
22. music
23. musical instruments
24. pottery & glass
25. real estate
26. specialty services
27. sporting goods
28. sports Mem, cards & fan shop
29. stamps
30. tickets
31. toys & hobbies
32. travel
33. video games
34. every thing else

Price
When you think about selling on e-Bay, one of the last things that usually come to mind
is pricing strategies. After all, e-Bay is an auction site. You list your item and wait for
competitive bidding to drive the price up. Unfortunately, it’s not that simple.
Pricing the items you sell on e-Bay is an important part of the selling process, even on e-
Bay. Many sellers don’t give pricing too much consideration and their auctions usually
show it.
People are looking for bargains, especially on e-Bay. They will bid only on items where
they see a value for the price they are willing to pay. Naturally sellers are concerned
about getting a fair price, too. Often, they have money invested in the item they are trying
to sell. They can’t go below a certain price or they risk losing money.
So, how do pricing strategies work on e-Bay?

There are essentially three types of pricing you need to be concerned with:

• Starting bid

• Reserve price

• Buy-It-Now price

Each of these methods has important factors to consider

Starting Bid.

Even though each of these can be included in every auction, e-Bay only requires you to
set a starting bid. The other two are optional.You should pay particular attention to the
starting bid as this will be an important factor for a buyer. Many auctions don’t get any
bids just because the starting bid price is too high.Sellers are worried that they will lose
money on their items if they start the bidding too low. The wrongly believe that they
won’t have enough bids to drive the price to the point where they will make a profit on
the sale.What these sellers fail to understand is that auctions – online or offline – are true
indicators of the value of a particular item. People are willing to pay only what they
believe the item is worth. It doesn’t matter to them what a catalog or a price guide says
the item is worth. There are millions of registered e-Bay users. The chances that an item
will close without competitive bidding are pretty slim. That is, of course, if you have an
item that people want. If you are trying to sell garbage, then all bets are off.
One of the best ways to let the market decide the value of an item is to set a low starting
bid once competitive bidding starts, the true price of the item will become clear.
The bottom line is that a lower starting price will lead to early and active bidding. Never
set your opening price more than $50.00, no matter how much the item is worth. This is a
price point that people have difficulty crossing.

Reserve Price

There are times when you absolutely cannot sell an item for less than a certain
price. If you use a low starting bid, you need a way to guarantee you will reach that
minimum price before you have to sell the item. This is where reserve prices come in.
A reserve price is hidden from buyers and is simply the lowest price you are willing to
take. If the bidding fails to reach the reserve price you are not required to complete the
sale. Of course, you can sell it at the final bid price if you want, but you are not required
to complete the transaction.
Once the bidding reaches the reserve price, then you are obligate to sell the item when the
bidding closes. A low starting bid with a reasonable reserve price is a good strategy for
many items. It encourages bidding but guarantees that you’ll get your money out of the
transaction. The downside is that many buyers don’t like reserve price auctions. They
quickly become frustrated when they repeatedly bid only to learn that “the reserve price
hasn’t been met.” After a few encounters like this, they’ll give up and move on.
A reserve price can be a hedge against losing money on the sale, but one thing to keep in
mind is that a seller can close an auction at any time for any reason without any negative
effects. While I wouldn’t use this as a strategy for every auction, it may save you if the
bidding isn’t quite what you expected for an item.

Buy It Now Price:


One of the cool features of many e-bay auctions is a “Buy It Now” button. This
allows the buyer to purchase a desirable item and stop the bidding process. Many buyers
don’t want to bid and wait a week only to find they are outbid at the last moment. The
“buy it now” option appeals to this type of buyer.
For the seller, it means getting a sale at an attractive price. Sometimes sellers are willing
to pay a little more to guarantee they will get the item rather than wait for the outcome of
an auction.
The “buy it now” option can be used for any type of item. It is particularly effective
when you are offering multiple identical items at any given time. Set your price
somewhere around your reserve price.

Other Pricing Strategies:

One of the additional factors that usually contributes to bidding and the final
price is shipping costs. Buyers look carefully at shipping and handling costs and factor
them into their bid.
You will encourage active bidding if you offer free shipping. Bidders will perceive extra
value in your item and they know there are no additional costs other than their bid price.
More often than not, offering free shipping will more than pay for the cost of shipping the
item.
If you use this strategy in your auctions, make sure you advertise it in the listing. Let
people know about it. Consider mentioning it in the title of the auction if you have
room.

How to Set the Price

Before you can list your item, you need to have an idea of what your item may be
worth. In some cases this is not relevant. If you buy wholesale to sell on e-Bay, you may
only need to know what it costs you to obtain and list your merchandise. Your prices will
reflect those costs. If you are selling one-of-a-kind items or collectibles, you will want to
have a good idea of the value. Check your local library or book store for pricing guides.
These may give you a good idea of what your item may be worth (as well as provide you
with important information to include in your listing.) Be careful, however, because some
fields use the catalog only as a guideline. In stamp collecting, for example, it’s commonly
known that certain stamps sell for much more or much less than the catalog price.
You can check for similar items on e-Bay. By checking completed auctions, you can get a
reasonable idea of what people are willing to pay.

How to Sell On EBay: Pricing Strategy


Many new EBay sellers make one of two mistakes: either they overprice items to
an untellable extreme; or they lose money on every transaction by setting low starting
prices with no restrictions. There are three strategies,
Strategy #1 if you are listing a popular item that you are confident will sell for a high
price; one strategy you can use is the ten-day, one cent starting price, no reserve auction.
This is the best way to start a bidding war: pull in bidders early with a low starting price
and no reserve and give those ten days and two weekends to battle it out. Depending on
the profit-margin of the item and the quality and number of your competitors, you may
want to consider using listing upgrades, such as bold, highlight, and feature listing
options to ensure your auction sticks out of the crowd. This strategy is not for recommend
for beginners. This is extremely high risk if you do not know how to take the risk out of
it.
Strategy #2 now, if you are new to EBay or want to list an item with undetermined
popularity, you can use a safer, but potentially as profitable bidding strategy for ten-day
auctions. You still won’t use a reserve with this strategy. But instead of setting the start
price low to encourage bidding war, you are going to set your start price to your ideal
selling price - and then couple it with a buy it now price that is slightly higher. This will
put pressure on the buyer to buy it now instead of watching. If she waits, she gains
absolutely nothing--and she risks someone else bidding (and ruining the low BIN price)
or just snatching it with the BIN option. In addition, knowing that she will lose nothing
anyway, she will realize that she can get the item up to ten days sooner if she uses the
BIN option to order it then, rather than waiting for the auction clock to tick down. The
strategy described above is very safe. It is use it for the majority of my auctions and
always get positive results. At worst, it will take 3-4 weeks to sell an item.
Strategy #3 Another effective way to use a ten-day setting is in conjunction with ditch
auctions--or auctions that sell a number of the same item. Ten-day auctions will give you
the longest amount of time to move the highest amount of products. You may also want to
feature ten-day Dutch auctions, depending on what items you are selling. If you’ reselling
information products and rely on the quantity of sales for profit, this wont be effective;
but if you’re selling a number of expensive, high profit-margin items, featuring your
auction is probably a good idea.
If none of these strategies works for you, you should consider the following two things:
1) the price other EBay businesses sell your product for. If someone else IS selling your
product, there is a reason for it - and it’s probably the price. If you cannot afford to sell at
reasonable price, you need to find a new source to Buy from. And if your product’s price
is reasonable, then 2) you need to redesign your auction and find new ways of pulling in
targeted traffic.
Place
EBay is an online market of buying and selling. It provides services to buy and
sell through internet. Customers have not to go to the market by self. EBay provides its
services in Europe America, Korea and in china. When a customer purchase any thing
from eBay, eBay is connected with all banks customer pays the amount by the credit card
or can by checque. EBay use royal mail services to send the product to the buyer.
Through royal mail service the customer can get its product which he or she bought.

Promotion
EBay is now the most famous website basically it needs not to be promoted. But
for promotions eBay advertised itself by different websites like on Google and it also
send its information’s to its account holders on their account. EBay has a separate box on
its website for feedback from its customers. To promote itself eBay analysis its customers
view about it. In this way eBay promote itself.

Major services and features


 BallPoint :
eBay's preferred online bill payment service that facilitates credit card
payment between buyers and sellers.
 eBay International
Users on eBay represent countries all over the world. With eBay's vision and
global business strategy, the company continues to expand its service and brand
abroad.
 Buy It Now
Buy It Now is an exciting optional enhancement for item listings. It allows
buyers to buy an item at a specified price without having to wait for an end of an
auction
 eBay Professional Services.
Professional Services on eBay serves the fast growing and fragmented
small business marketplace by providing a destination on eBay to find
professionals
 eBay Local Trading.
eBay has local sites in 60 markets in the U.S. These localized eBay sites
allow users to easily find items located near them and browse through items of
local interest

 eBay Premier.
eBay Premier is a specialty site on eBay, which showcases fine art,
antiques, fine wines and rare collectibles from leading auction houses and dealers
from around the world
 eBay Live Auctions.
. Live Auctions provides live, real-time online bidding on items being sold
on the sales floor of the world's leading auction houses

Environment

Suppliers
Suppliers from whole sellers to drop shippers:

There are many suppliers that help supply items to eBay business. Simply sell the item
and the drop shipper sends the item to the customer. All the persons and the companies
that place their products on eBay with pictures are the suppliers of eBay.

Marketing intermediaries
Because eBay eliminates middlemen and lowers barriers to buying and selling,
there are no physical intermediaries on eBay. Actually eBay is connected with pay pal.
Pay pal is a web site which is connected with eBay it receives price from the customers
and sends it to the eBay inc. and receives product from eBay and handover it to the
customers.

Competitors
EBay’s broad-based competitors include the vast majority of traditional dept and
general merchandise as well as emerging online retailers.

• AOL
• Amazon
• Buy.com
• Autobytel.com
• yahoo

These are the few examples of eBay’s competitors. Here we compare ebay with yahoo
auctions.

Yahoo vs. ebay for sellers

ebay yahoo
Maximum 10 Days 14 Days
duration
ending time eBay auctions end at the time the Yahoo allows you to set the
auction was created ending time within a one-hour
range.
Fee based on the starting or reserve price not charge any fees for listing
of an item each time an item is listed auction items to the buyer or
seller
chances of buy More likely Less likely
& sell
When a new a page for the item gets created A page for the item is created
item is posted immediately, but it can take several immediately. The item is also
hours before the item gets added to the added to the list of items and is
list of items and is searchable searchable immediately

Sniping nothing to stop bidders from waiting it is automatically extended by A


until the last seconds of an auction to bid is made within the last 5 mins
make a bid. of an auction, five minutes
Restart Cannot be automatically restart Can automatically be restart

Response Not respond as quickly as Better performance than eBay


Yahoo.(browsing, searching, etc)

Restriction More restrictions Few restrictions

counter to use another site to place a Counter able to count without placing
on your auction item page counter on your auction page

EBay vs. yahoo for buyers


ebay yahoo
Items Over 6 times more items A lot fewer items

Changing for yes No


posting
Unusual More likely to find Not have as wide or deep of
thing a selection

Search  Can limit within a category  Titles or titles &


description
 Titles or titles & description
 Can limit within a
category
Browse items By title or by picture (if designated as part By title or by picture
of the gallery )
Insurance Automatic insurance for sales Not offer insurance

Space for Not provide space for pictures: You must Provides free space for
picture place your picture files On some other site auction item Pictures, so
more items have pictures
For you to see
Source : Cost Analysishttp://www.alysta.com/software/ebayyahoo.htm June 10,
2001
E B AY , A C O M PA N Y A N A LY S I S
EBay S.W.O.T Analysis
EBay’s Strengths

EBay is the leading provider of online auction and customer-to-customer trading in


the world. They have many competencies, core competencies, and distinctive
competencies that set them apart from their competitors. Their alliances, international
dominance, and recognizable brand, name just to name a few, are some of the main
reasons why eBay is a company that is hard to top.

• Largest Online Auction Forum(core competence)


From its beginning in the mid-1990s, eBay has been growing in leaps and
bounds. They now have over 94.9 million registered users in more then 150 different
countries. eBay’s founder Pierre Omidyar did not even see the tremendous
possibilities that eBay had when it was first developed over ten years ago. eBay now
holds the top spot in the online auction industry. In the United States alone one-third
of the population is already registered with the site and with increasing use of the
internet that number is sure to grow.
• Recognizable Brand Name(core competence)
A recognizable brand name is important to the success of a company. eBay
has made sure to use color and unique writing to show their brand name off. They
also use television and Internet advertising to get continued publicity on different
media avenues. Amazon.com does not have as much face value as eBay. Their name
is not distinctive to the customers like eBay’s.
• Over 250 Alliances (competence)
eBay holds alliances with some of the largest companies in the world.
They include UPS, America Online, IBM, PayPal, and Walt Disney. These
alliances create more opportunities for eBay to advertise and reach potential
customers. eBay has also created alliances with companies that help to maintain
customer satisfaction. Tradesafe and I-Escrow have both partnered with eBay to
make sure that all customers get what the pay for.
• Global Reach (core competence)
The global reach that eBay has obtained is not matched by any other online
auction site. Although Amazon.com is in a close second to eBay, customers
obviously prefer eBay’s global ability. They have the capability to reach people in
virtually any part of the world and get them the product they are looking for.
• Entertaining Site (competence)
eBay has created a site that makes people want to come back again and again.
They are constantly revamping their site to make sure that it is the easiest, fastest, and
most fun auction site on the web.
• Over 27,000 Different Categories (distinctive competence)
The wide variety of products offered on eBay gives them a competitive
advantage above all other online auction sites. They are like the Wal-Mart of the
Internet! They say that anything you want you can find on eBay.

EBay’s Weaknesses

Like any company, eBay has weaknesses. They are not able to do everything
to the best of their abilities. A lack in ability to monitor all illegal activity as well as
failure in some foreign markets is two weaknesses of eBay.

• Inability to Measure Illegal Activity on Site


eBay has taken many precautions to prevent illegal activity on their site. They
estimate that only 1 percent of transactions on their site involve fraud. The customers
however disagree to some extent. Some say that there are as much as 10 percent
fraudulent transactions. EBay has no real way to measure the extent of illegality on
their site.

• Inability to Penetrate Some Foreign Markets


Penetration in foreign markets is crucial to the success of online auctions.
EBay has done an outstanding job of penetration in foreign markets. However, they
have been unable to take over one of the most crucial foreign markets, Japan. Japan
is one foreign market that is on the rise. They are becoming more prosperous and use
of the internet is growing. If eBay is not able to gain ground in this market it could
hurt its foreign market standing.

• Lack of In-Depth Descriptions for Products


Amazon.com boasts in-depth product descriptions for all merchandise sold on
their site. This is not one of eBay’s outstanding features. The lack of description in
products could be a factor in the amount of counterfeit and wrongly identified
products that are sold to customers.

• Technology Malfunctions
Technology malfunctions are always going to be a factor when dealing with
websites and online shopping. eBay must take measures to keep malfunctions as low
as possible to retain happy customers and to keep hackers out of personal PayPay and
eBay accounts.

EBay’s Opportunities

EBay can continue to seek alliances, partnerships, and new customers to


continue its reign as number one.
• Changing Lifestyles of People
People are using the internet more and more to pay bills, talk to family, and
shop. eBay can use this opportunity for continued market penetration and expansion.

• Acquisition of Shop Yahoo.com


Yahoo.com’s shopping site is very weak in the online auction industry. eBay
should explore the possibility of acquiring their shopping site, along with its
members and alliances already formed to broaden their customer base. EBay
already has partnerships with Yahoo.com in other areas so this acquisition would
benefit both parties.

• Continued International Expansion


As internet use continues to grow throughout the world eBay must take every
opportunity to enter desirable international markets. With the amount of internet
users already registered on eBay in the United States continued international
expansion is critical.

• Increasing Use of the Internet


The internet is being used more and more each day. eBay can take this
opportunity to expand and penetrate new markets.

EBay’s Threats
There might also be the potential of turning some threats into
opportunities.

• Thieves
There will always be the threat of fraud and illegal actions in online shopping.
No matter how many precautions eBay takes computer hackers and thieves will find
new ways to trick honest shoppers. eBay has taken precautions to prevent these
illegal actions and they must stay on their toes to make sure they do all they can to
prevent illegal activity on their site.

• Increasing Number of Online Trading Sites


When an industry is attractive new competitors will always try to enter and
steal some of the market share. eBay already has many competitors surrounding them
including Amazon.com, uBid, and ePier. Some boast that they are an alternative to
eBay while others just try to be better than eBay. To sustain a competitive advantage
above their competitors eBay must continue to grow and advance in the online
auction industry. Strategies must be determined and defenses formed.

• Rapid Growth of Amazon.com


Amazon.com has continued to grow since it was formed in the mid-90s. They
the largest competitor of eBay and may have the potential to take over the largest
market share in the online auction industry.
• Increasing Number of Online Stores

Online shopping is becoming more and more common. Stores such as


Target and JC Penny have developed sites where people can shop from the
comfort of their own home. This poses a large threat to eBay. They are now not
only competing with other online auction sites but also online retailers.

Despite these challenges, prospects for eBay in the future look bright, as eBay
growth continues to be strong and eBay's recent acquisitions continue to pick
up financial steam and Internet traffic as well.

YA H O O , C O M PA N Y A N A LY S I S
Strengths:

• large adverting accounts


Yahoo’s Overture is a tremendously profitable Internet advertising
business. It focuses on affiliate advertising for large adverting accounts, in the
same way as Google's Adsense programme. This is an important income stream
for Yahoo!.

• The most popular website


Yahoo! has over 350 million users of its services and solutions. This
makes it a very powerful marketing company, with a very well known brand.
Some reports indicate that is it is the most popular website in the World.

• international business presence


A key long-term strength is Yahoo’s international business presence. As
the Internet expands and it is adopted by more nations the opportunities for
Internet brands begin to emerge. Yahoo! is well placed to take advantage of these
opportunities with its strategic business units in Asia, Europe and Australia.

• source of structured information


The Yahoo! Directory is an original source of structured information. It
has built over the last decade, and unlike mainstream search engines, its content is
moderated (i.e. sites are vetted before their inclusion).

Weaknesses:

• Differentiation
Differentiation is difficult for Yahoo!. Almost all of its packaged services
are available from other sources.
1. Search facilities are available on MSN and Google.
2. Free E-mail accounts are available from Hotmail (MSN) or G-Mail
(Google), and many, many others.
3. New is available from CNN or the BBC.
4. Shopping is available everywhere on the Internet.

• Uncertain future
Online advertising is a new income stream for organizations such as MSN,
Yahoo! and Goggle. Yes, today they are very, very profitable. However, as
technology develops and new unforeseen advertising media emerge, the future is
uncertain for these income streams. This is a weakness for Yahoo! and its
competitors.
Another income stream that has been key to Yahoo! is derived from its
partnerships with telecommunication providers. For example, you buy an Internet
connection package from your local telephone company, and it includes a fee-
based Yahoo! package including e-mail accounts, user support and other added
value services. If ever this channel is changed or removed, the income stream
would be affected.

Opportunities:

• international market
The international market is a huge opportunity for Yahoo!. Yahoo!,
Microsoft and Google are busy carving niches and taking over businesses in are
around the Greater China Region. China has over 1,200,000,000 citizens. Other
economies, such as India, also offer tremendous growth potential.

• Yahoo! Directory
The Development of the Yahoo! Directory has potential for new business
and income streams. Two thirds of organizations in Ohmae's Triad (Europe, Japan
and the USA) are Small Medium Enterprises (SME'). SME's are potential
directory advertisers.
• Mobile technologies

Mobile technologies offer another opportunity for Yahoo!. Today we


access the Internet using personal computers. Tomorrow phones, televisions,
personal organisers, music players and computers will merge and morph. The
mobile devices of the future will need services and solutions. Yahoo! would be
well placed to provide many of them.

Threats:

• competitors
The biggest threat for all web-based organization is competition. Huge
profits attract investors, innovators and entrepreneurs. Dotcom fever has not gone
away, it is now more focused on profit delivery. All of Yahoo!'s key services have
competitors such as AOL, Google and many others.

• culture specific competitors


International, culture specific competitors could affect Yahoo! in the future,
unless strategic alliances are forged. China has developed its own search engines,
as has India. Why should the World use USA based companies such as Yahoo!?
There needs to be a series of substantial competitive advantages to see the
business remain as an international brand. Look at what has been learned from the
global car industry, or electronics industry.

Technological factor:

Now days every thing has affected by the technology. So eBay has also
some effects of technology. Now a day’s eBay uses “beta” version the version of
eBay is updated by the Microsoft corporation when Microsoft make changes its
internet explorer then eBay version also changed by the Microsoft.
Functions of latest version;
It works automatically means when any customer wants to find out
any thing the beta version asks about your home address or location when you tell
him. Then beta version asks you to about the area boundary in which you want to
buy the thing.

Example;
EBay in an auction place every one can buy or sell through it. For example
if you want to buy nokia N95 and you tell to beta version that you want it with in
40 km around to your house. Beta version searches it within 40km of your house
and tell you that is it available with in the distance or not.

Political factor:

EBay is not affected by any political factor it is free online market place
from political environment. No new laws and any pressure group can affect eBay.
Basically eBay works under the govt. and there are some rules and regulations of
Europe and American govt. that’s why political environment can not make
changes by pressure on eBay.

Direct marketing channel:


EBay directly targeted to its customers there’s no intermediaries involve
between customers and company. EBay inc. uses the direct distribution channel to
forward the product to its customers. It sells directly to its customers. Same like
Avon, Amway and Tupperware sell their products door to door or through home
and office sales. EBay forward its product by royal mail in England. Royal mail
provides three types of packages for transferring the product it depends on
customer in how much time he want to receive his product. The very special time
your product will be handover to you the very next day. The auction process on
eBay is direct from sellers to eBay to buyers.

Auction process:
I. First the person who wants to sell his product from eBay he get registers
himself with his product.
II. In second step the buyers starting bidding on that product.
III. Successful bid selected
IV. Than banks are connected with eBay the buyer can pay by checkup or by
credit card.
V. After payment the bank notify to eBay to make sure that the payment has
done.
VI. EBay notify to the seller
VII. The seller delivers the product to the buyer on his given address.
VIII. Then the buyer sends notification to eBay for the recipient of the product.
IX. EBay send this notification to the bank.
X. Then bank send payment to the seller.
These are the steps that are involved for auction process in eBay that the sellers
and the buyers should have to follow.

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EBay Today:

Anyone who has invested in eBay stock over the last few years probably
knows that eBay's position in the Internet marketplace is rapidly changing. In
recent quarters, however, things have slowed down a little. Quarterly year over
year growth is now at just over 30 percent and shows a downward trend—still
excellent, but not quite as stratospheric. Some of this is due to increasing
competition from eBay competitors, including Google (worldwide but especially
in North America and Europe) and a number of alternative auction houses across
Asia and the Pacific Rim. In some circles, people are talking as if the slowing of
growth and the maturing of eBay as a company and stock mark end times for the
company. Not so.
In recent years eBay CEO Meg Whitman's strategy has been to continue to
strengthen eBay's core auction business while at the same time to diversify eBay's
business model and holdings as a hedge against competition in the online auctions
and ecommerce market. This strategic and markets growth has included a number
of investments and acquisitions—big names that today are also eBay. You may
have heard of some of them

Skype—The wildly popular Skype VOIP (voice-over-internet-protocol) service is


eBay's largest acquisition to date and one of its most recent, purchased in 2005 for
approximately $2.6 billion. Whitman's vision for Skype is as a communications
hub not just for Internet customers looking for alternatives to traditional telecom
packages, but for eBay buyers and sellers, who will eventually be able to interact
securely and anonymously by voice. She also sees a future in which the
forthcoming Skype subscription charges will be cleared primarily through PayPal.

PayPal—By now, nearly everyone realizes that PayPal is now an eBay company,
picked up for $1.5 billion in 2002 and a natural match: the vast majority of eBay
transactions involving online payments at the time used PayPal, and this remains
the state of affairs today. True to Whitman's vision, PayPal has also grown to
become the premier payment system for ecommerce across the Internet, second
only to direct credit card transactions and safer as well. An increasing number of
entailers and even brick-and-mortar stores accept PayPal payments today.

Craigslist—In 2004 eBay paid an undisclosed sum to acquire a 25 percent


interest in Craigslist becoming its largest single shareholder. EBay has kept a low
profile vis-a-vis it's ties to and influence on Craigslist, but with the classified
service's growth going through the roof and the classified marketplace becoming
more important online in general, investors should see this as a strong asset with
big upside potential for eBay.

Half.com—Half.com acquired by eBay in 2000, represents eBay's move into the


online used media market. Half.com was a rising star in and in many ways the
creator of this market which has now been joined by the likes of Amazon.com
among others. Half.com remains a perennial favorite amongst students,
bibliophiles, game enthusiasts, film buffs, and others in seeking to buy used
media products at reduced cost. Because these types of products are commodity
priced and often have a long shelf life before being purchased, the alternate sale
model that Half.com represents is both appropriate to its market and does not
compete directly with eBay's core auction offerings.

Rent.com, Shopping.com, Prostores—While not as monumental in scale as the


aforementioned transactions, eBay has also diversified its retail and real estate
businesses with Rent.com Shopping.com and Postures which together
complement eBay's existing eBay Motors eBay Real Estate among others, in
retail beyond the commodity and consumer goods market.

If together these acquisitions paint the picture of a company in the midst of steady
and continued growth, they should—eBay remains the premier online auctions
and retail space and is poised to continue along this trajectory for the foreseeable
future. EBay’s major threat at the moment is Google also rapidly expanding and
enjoying market-leading growth. EBay’s relationship to Google is a troubled one,
as eBay relies on Google's advertising model and market reaches for its continued
success even as Google continues to enter market niches in which eBay products
already exist—for example, classified ads and online payments.