Ebay's Foreign Operations

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I. Problem
Ebay’s revenues from foreign operations don’t exceed domestic revenues.

II. Background
In 1998, Meg Whitman the CEO of eBay, wanted to perfect eBay’s concept in the United States before going abroad. However, she soon realized that many small competitors were springing up around the world. She became concerned that unless eBay went global, she would forfeit many opportunities to these small local firms or to major firms such as Amazon and Yahoo!. Meg Whitman decided to expand around the globe with its first foreign country, Germany. It was chosen in because of its 40 million Internet users. The company purchased Alando, an eBay copycat site, for $47 million in June 1999. Today, Germany is eBay’s largest international site, with estimated annual total sales of $7 billion versus $20 billion for the United States. In 2000, eBay had virtually no international operations, by 2005, the firm had sites in 31 countries around the world ranging from Brazil to Germany and China. eBay’s 2005 foreign operations generated well over $1 billion in revenues. And of eBay’s 135 million registered users, about half live outside the United States. Shortly after purchasing Alando, eBay launched its own site in Great Britain and Australia. In 2001, eBay purchased Korea’s Internet Auction Co. And Europe’s iBazar that gave eBay immediate access to Italy, the Netherlands, and Spain. eBay then purchased a minority interest in MercadoLibre, Latin America’s leading auction firm. In total, eBay has invested nearly $2 billion in its international acquisitions.

III. Objectives
To increase revenues to not less than $13 Billion from foreign operations in the next year and expand in other international markets with the least cost possible.

IV. Assumptions (SWOT Analysis)
Strengths:
World's largest online auction website
No retailer has more products than eBay
Virtually no direct competition in the online auction space
Platform tools: Customer relationship management,...
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