Ebay
Developing new services at the world’s most successful internetbased company, eBay
History of eBay
eBay started life out as Auctionweb, founded by
Pierre Omidyar
Brainstorming amongst friends resulted in the overall idea
By 1997 maintained its impressive growth but it
needed additional funding
Benchmark provided said funding, and more importantly, leadership
Ms. Whitman was installed as CEO and Mr. Swette as COO
First move was to issue an IPO
How does it work?
eBay provides listings and listings support (image
hosting etc)
Buyers browse listings for interesting items and place bids
Sellers history is provided
Sellers pay initial fee for listing and then a cut of the
final sale
Sellers also have history to buyers history
This in combination with low operating costs results
in high profit margins.
Case Study: Question 1
eBay is one of the only major internet-based
firms to consistently make a profit from its inception. What is eBay’s business model?
Why has it been so successful?
Simple, creative, business model
Works like a flea market
No transaction handling
User Interaction is a key part of its success
Half the companies employees work in customer support
Case Study: Question 1
Not just one way interaction, user feedback is highly
important
Case in point, the June 1999 downtime
User expectations of uptime were revealed
Users expect 100% uptime which eBay at the time was unable to deliver
The management of this incident involved a rather large investment in infrastructure and technology to ensure that eBay was up as much as possible.
Case Study: Question 2
Other major websites, like Amazon.com and
Yahoo, have entered the auction marketplace with far less success than eBay. How has eBay been able to maintain its dominant position? eBay has maintained its dominant position for two primary reasons
History of eBay
eBay started life out as Auctionweb, founded by
Pierre Omidyar
Brainstorming amongst friends resulted in the overall idea
By 1997 maintained its impressive growth but it
needed additional funding
Benchmark provided said funding, and more importantly, leadership
Ms. Whitman was installed as CEO and Mr. Swette as COO
First move was to issue an IPO
How does it work?
eBay provides listings and listings support (image
hosting etc)
Buyers browse listings for interesting items and place bids
Sellers history is provided
Sellers pay initial fee for listing and then a cut of the
final sale
Sellers also have history to buyers history
This in combination with low operating costs results
in high profit margins.
Case Study: Question 1
eBay is one of the only major internet-based
firms to consistently make a profit from its inception. What is eBay’s business model?
Why has it been so successful?
Simple, creative, business model
Works like a flea market
No transaction handling
User Interaction is a key part of its success
Half the companies employees work in customer support
Case Study: Question 1
Not just one way interaction, user feedback is highly
important
Case in point, the June 1999 downtime
User expectations of uptime were revealed
Users expect 100% uptime which eBay at the time was unable to deliver
The management of this incident involved a rather large investment in infrastructure and technology to ensure that eBay was up as much as possible.
Case Study: Question 2
Other major websites, like Amazon.com and
Yahoo, have entered the auction marketplace with far less success than eBay. How has eBay been able to maintain its dominant position? eBay has maintained its dominant position for two primary reasons