The eBay case deals with the newly acquired online trading company iBazar, the leading online trading site in France, Italy, Spain, the Netherlands, Belgium, and Portugal with a presence in Sweden and Brazil. eBay wants to continue expanding internationally to achieve their mission to “create the world’s largest global trading community and to help people trade practically anything on earth”. Currently, eBay’s main goal is to ensure the iBazar deal in Europe and the acquisition of Internet Auction Company in Korea is successful. They also realize the opportunity of expanding into Latin America through current iBazar Brazilian operations there.
There are two main alternatives for dealing with the Brazilian operation of iBazar. One is to embrace the operation and attempt to grow and expand it. The other is to completely dispose of it, and deal with expansion into that market a later time. If eBay is to retain the Brazilian operation, they must choose a method in which they hope to grow and expand not only in Brazil but to the rest of Latin America. They have 3 main options in which they could do this. One would be to grow organically from within Brazil, also known as the Greenfield Entry Approach. Another option would be to acquire one of the two already existing Latin American online trading leaders: Mercadolibre and deRemate. Finally, they could enter into a joint venture with the aforementioned market leaders to continue expansion in Brazil and Latin America.
If eBay decides to dispose of iBazar Brazil, they must decide how they want to dispose of it. One option is to sell it for cash and hold off on entering the Latin American market. A second option eBay can consider is selling the operation for equity in a competitor. This would allow them to keep their hand in the Latin American market but with less risk. Finally, they could just shut down the operation completely and look to expand into the market at a later time.
The decision... [continues]
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