Ebay Case Study

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ASSIGNMENT NO 1

EBay Inc.
Strategic Management
Submitted to: MR. Asim

Submitted By: Faisal Javed

Registration Number: L1S13MBAM0123

Summary
August 2009 EBay Inc. formed a partnership with G.M Motors enabling GM Dealers in California to help consumer negotiate purchase of G.M cars on EBay online marketplace. In 2nd quarter of 2009 EBay profit fell 29% and revenue declined 4%. This loss is still better than analysts’ expectations. In same quarter EBay reported growth in both business segments PayPal and Skype. In same quarter EBay announce for the IPO’s of Skype in 2010. September 1995, Pierre Omidyar created an online auction in form sole proprietor business. Omidyar is a computer programmer who creates a code that enables and run EBay auction website from his home computer. In May 1996 EBay incorporated in California and become public on September 24, 1998. In 2008 EBAY 14% share of global e-commerce with 86.3 Million active users. EBay is virtual online business that offers sense of community to buyers and sellers that are sustained by communication and high transaction rates on wide offered of good & services. EBay provide faster, easier, safer online commerce experience. EBAY is supported by its proprietary SKYPE that allows free telephonic calls using a broad band Internet connection to any telephone. EBay success is sustained through communication and trust. EBay have three business segments which are 1) Marketplace 2) Payments 3) Communication. Marketplace generates revenues from listing and fees paid by sellers, payment segment revenues are generated through fees paid by merchants for payments processing through PayPal & Bill Me Later. Communication segment generates revenue from Skype either on a subscription basis or per minute basis for Skype out Minute. Additional revenues are from advertising and revenue sharing contracts with third parties that provide transactions services to EBAY and PayPal. In 2008 EBay.com generates $ 59.7 Billion and PayPal earned $30.4 Billion. EBay provide virtual marketplace auction where the market determines the price of item sold. EBay offer millions of products trade through auction and fixed price in 39 countries and boasts 86.3 Million users in 2008. They have 16,200 employees in 2008. The most selling categories on EBay is consumer electronics and computers etc. EBay have customized website across four major market 1) Asia Pacific 2) Europe 3) North America 4) Latin America. EBay don’t have formal mission and vision statements but according to their annual reports they are creating world leading ecommerce franchise by investing in core Marketplace segment and also by building adjacent Marketplaces business. EBay have 4800 common stockholders and never paid a cash dividend to them. The change in stock price of EBay is 58.17 in 2004, 43.22 in 2005, 30.07 by 2006, 33.19 in 2007 and 13.96 in 2008. Business Segment 1: Marketplaces Marketplace segment include Ebay.com, Stub Hub, Shopping.com, Half.com and rent.com. In Ebay.com two ways are used Auction style and fixed price. Auction style listing allows

sellers to select a minimum price to for opening of bid and that stay open for a period of time. Fixed price format allows sellers to name a price upon listing instead of waiting for auction time to expire. And to facilitate customers EBay.com also offers services which are: Feed Back form, Safe Harbor Program, Verified Rights Owner Program, Customer Support, Value Added tools and services, and Loyalty programs. Stub Hub allows US customers to buy & sell tickets to sporting, events, theaters, and other entertainment events. EBay Inc. also offers classified advertising services to member are hundred of cities and regions of world. Online advertising, mailing, and other services are offered to EBay’s strategic partners. Acquired in 2005 Shopping.com that provides online comparisons between millions of products and product reviews. Rent.com acquired by EBay in 2005 the...
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