How has the change in the nature of eBay sellers affected the creation of value for buyers?


How has the change in the nature of eBay sellers affected the creation of value for buyers? Pop quiz: Name the high-tech company that got its start in someone’s living room, grew from zero revenue to a multibillion dollar corporation in less than a decade, and pioneered the model for an entire industry to follow. If you’re thinking that the companies that fit this description make a list that is a mile long, you’re right. But in this case, we’re talking about eBay.

EBay is one of the biggest Web success stories in the history of, well, the World Wide Web. But sooner or later, every high-growth company hits a speed bump and experiences growing pains. After amazing growth for its first 15 years, eBay has hit that speed bump. Current CEO John Donahoe is faced with the difficult challenge of putting eBay back on the superhighway to prosperity.

EBay started in 1995 as an auction house. Unlike most dotcoms, eBay was based on a model that produced profits, not just revenue. Whenever a user posted an item for auction, eBay collected a fee. The more products that went up for auction, the more money eBay made. EBay has tinkered with its fee structure over the years. But the basic idea has remained the same. The online auction formula took off like wildfire, and eBay dominated the industry. EBay’s revenue, stock price, profits, and number of employees soared. By the year 2000, eBay was the number one e-commerce site in the world by sales revenue.

A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Principles of Marketing

ISBN: 978-0132167123

14th Edition

Authors: Philip Kotler, Gary Armstrong

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