eBay Inc. Managing Success in a Dynamic Online Marketplace

Essay by danster13University, Master's October 2006

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In September of 1995 Silicon Valley software engineer Pierre Omidyar spent a long holiday weekend writing the computer code for an Internet-based trading system "in which buyers and sellers could establish a genuine market price" (eBay, 2005). Omidyar's website, initially called Auction Web and later renamed eBay, soon attracted a group of people who used the site to trade collectibles like PEZ candy dispensers, Beanie Babies, and antique figurines. At year-end 2005, eBay boasted 135 million registered users, including an estimated 430,000 users in the U.S. who were making all or part of their income by selling on eBay (eBay, 2005 pg. 257). In mid-2005, eBay reported that it had about 150 million registered users including some 60 million 'active' users who have bid for or listed items within the past year worldwide buying and selling goods worth more than $40 billion this year (Meg Whitman CEO eBay, 2005).

No longer just a haven for trading collectibles, today eBay.com is a place where you can find just about anything as long as it is legal. While it is still possible to find PEZ dispensers on eBay, it is also possible to find automobiles, industrial equipment, computers, books, videos, furniture, houses, haunted wedding dresses, teddy bears, and more. The power of eBay is such that in the United States, eBay is now estimated to account for about 75% of all e-commerce sales, excluding online travel and grocery sales (Meg Whitman CEO eBay, 2005). With a market capitalization of $54 billion at the end of 2004, and recent annual growth rates in excess of 80%, eBay.com is unquestionably a successful, fast-growing global giant by any measure (Hoover's, 2005). Moreover, eBay is one of the Internet's few unqualified ecommerce successes. Notwithstanding eBay's historical success, a number of analysts have expressed concern about...