Ebay Case Analysis

EXECUTIVE SUMMARY

eBay was founded with a simple idea – People are basically good. This fundamental belief created a completely new kind of market place, forever transforming e-commerce. Today eBay values continue to guide how eBay does business and connects buyers and sellers around the world.

eBay has built an online person-to-person trading community on the Internet, using the World Wide Web. Buyers and sellers are brought together in a manner where sellers are permitted to list items for sale, buyers to bid on items of interest and all eBay users to browse through listed items in a fully automated way.

Founded by Pierre Omidyar on September 3, 1995 at San Jose, California, is the World’s largest online market place with over 9 billion USD of revenue with service worldwide.

Chris Agarpao was hired as eBay’s first employee and Jeffrey Skoll was hired as the first president of the company in early 1996. The company officially changed the name of its service from Auction Web to eBay in September 1997.

Originally, the site belonged to Echo Bay technology Group, Omidyar’s consulting firm. Omidyar had tried to register the domain echobay.com, but found it already taken by the Echo Marine, a gold mining company, so he shortened it to his second choice,eBay.com. In 1997, the company received $6.7 million in funding from the venture capital firm of Benchmark Capital.

Meg Whitman was hired as eBay President and CEO in March 1998. At the time, the company had 30 employees, half million users and revenues of $ 4.7 million in the United States. eBay went public on September 21, 1998, and both Omidyar and Skoll became instant billionaires.

I. TIME CONTEXT

The problem arose in April 1999, when Amazon.com launched its auction site which was remarkably similar to eBay’s and made it easy for buyers and sellers to move across Amazon. It did not charge any fees for the first few months and offered additional services such as cross promotion relevant to Amazon retail...