CASE STUDY 3.3 eBay: The Supreme Electronic Business This case shows that eBay's e-business strategies have been successful, but also that the company must continually be on the lookout to adapt and respond appropriately - viable and efficient for a strong community based on fairness and trust. A photography student looking for a used camera could choose from different models available across the country and count on prompt delivery of the product purchased. The owner of a period clothing store could sell his items to collectors all over the planet. The community would identify a deceptive or dishonest user in an ever-changing market. Pierre Omidyar was 28 when, on a three-day leave, he set out to record the original machine code of what would become an Internet supermarket: the eBay auction site. He saw auctions as a fair mechanism to promote Internet commerce, whereby sellers could set their minimum prices and buyers could and would exclude him from the market. A record number of entrepreneurs have adopted eBay. For example, according to a survey conducted for eBay by ACNielsen International Research, in 2002, 75,000 people made a living from selling items on eBay. Then, in early 2008, the website announced that it had hundreds of millions of registered users, employed more than 15,000 people and had revenues of nearly $ 7.7 billion to then determine the market value of the site. 'an item by raising the bids to the maximum amount they would be willing to pay. A new feedback system would allow sellers and buyers to rate each other and thus help prevent fraud by giving this community the means to govern itself. I really wanted to give everyone the ability to be a producer as well. It was about letting users take responsibility for building the community, Omidyar later explained. The site was launched on September 4, 1995 under the name Auction Web, then quickly renamed its domain name, eBay (short for Echo Bay, Omidyar's consulting company). Initially free, this service then became chargeable to cover costs falling under US dollars. The market value of Omidyar's innovative company reached US $ 2 billion after three years, and the resilience of its site as an economic engine was unmistakable. Jeffrey Skoll, an MA from Stanford University, joined the company in 1996 when the site was already profitable. In March 1998, Meg Whitman became President and CEO. In September 1998, eBay launched a successful public offering that made Omidyar and Skoll billionaires, just three years after eBay launched. For his part, after ten years at eBay, Whitman decided to get into politics. On January 23, 2008, the company announced that Whitman would be stepping down on March 31, 2008. John Donahoe, his successor, served as eBay CEO until 2015. Internet provider. A viable market This is how Omidyar's web auction site, www. ebay.com, has taken off. It offered a new element that its users were eagerly looking for: a market Chapter Business enterprises through eBay around the world create profitable and sustainable businesses by means of its services. eBay has launched several business sub-businesses that create added value for its customers, such as payment and communication methods. Over the years, eBay has had to launch and adapt these businesses in order to respond to the changing market. However, the volatility of the digital world is felt for large and small businesses. For example, PayPal lost 12% of its value when eBay announced in January 2018 the end of the partnership between the two companies. A communications company: Skype A payment company: PayPal Skype, a global Internet communications company, offers all Internet users the possibility of having free, unlimited and high-quality voice conversations using its post office software. innovative post. Launched in August 2003, Skype could boast of counting Founded in 1998, PayPal is a subsidiary that eBay bought in 2002 at a cost of US $ 1.5 billion. It was subsequently resold in 2015, when it was valued at $ 30 billion. PayPal allows anyone or business with an email address to securely, quickly and easily send and receive payments online. PayPal's service leveraged the existing financial infrastructure of bank accounts and credit cards as well as the world's most advanced proprietary fraud prevention systems to build a secure, comprehensive, real-time payment solution. . According to Scott Thompson, president of PayPal from 2002 to 2005, the company's fundamental advantage over rival payment systems lies in its fraud management capabilities and international reach. PayPal quickly became a global leader in online payment solutions and had nearly 227 million active members around the world in 2017. Active sellers and buyers on eBay, online retailers, online businesses and traditional businesses transact through PayPal. The company is accessible in 200 markets and accepts payments in 25 currencies. To stimulate the growth of its subsidiary and make it one of more than 300 million users in 2016. In September 2005, eBay acquired Skype for approximately US $ 2.6 billion, in the hope that Skype would streamline and improve communications between sellers and buyers as it becomes part of the market. from eBay. Skype provided buyers with an easy way to quickly talk to sellers and get the information they want, while sellers were able to build relationships more easily. The auction company hoped that this acquisition would consolidate its global market and payment platform, lead to the creation of business lines of business and open up important opportunities for the company. business. In April 2009, eBay announced its intention to sell Skype because it wanted to refocus on its core business, e-commerce. According to John Donahoe, Skype was a great stand-alone business, but it had limited synergies with eBay. After selling Skype to Microsoft, eBay was able to focus on improving its e-commerce site. Among the areas of expansion envisaged is international electronic commerce. Activities outside of North America account for more than half of eBay's revenue; they certainly offer possibilities for continued growth, even if competition is intensifying rapidly in this area. of the biggest brands on the planet, in 2008 PayPal acquired Bill Me Later, Inc. (now PayPal Credit), a company that offered its own online payment service. While many merchants accepted both Pay-Pal and Bill Me Later as separate payment methods, the company wanted to strategically merge these services to provide a single payment option, to promote uptake and uptake. use. According to John Donahoe, there are only three winners on the side of the global payment networks (Visa, American Express and MasterCard) and the same will be true in the world of online payments. PayPal was keen to take steps to make sure it was part of the winning group. In 2013, the company deployed an open development platform that allows other organizations to build web applications that accept payments made by PayPal. The company believed that not only would merchants be able to experiment with different ways of accepting and processing online payments, but also that PayPal could reduce development costs by allowing millions of developers to keep eBay. technological flair? In the early days of the Web, eBay devoted most of its resources to building a sophisticated auction infrastructure and system that could handle large amounts of visits and transactions. Subsequently, it turned more towards acquisitions and the expansion of its activities, as evidenced by PayPal and Skype, to the detriment of the production of new tools and technological elements for the eBay interface. Today, eBay's strategy is to refocus on commerce 120 Part 1 Management information systems electronic. New services have been developed in connection with PayPal, such as the addition of a smartphone application and the formation of partnerships with thousands of Internet sales sites. day , which alerts consumers to the existence of 24-hour sales for certain products, as well as the addition of a Email a friend button next to each item displayed in eBay, which provides an easy way for customers to recall discount details and remind their friends. Some analysts wonder if eBay will be able to reinvigorate its technical elegance in time to attract and retain customers to its online auctions. For example, many customers complain that a search done on the eBay site does not give as relevant results as those obtained from a search made by Google, and that the tools available on eBay do not provide the results. user interactions as easy as on social networking sites like Facebook. Within the company, some eBay staff criticize the cumbersome verification process used to test new ideas and feel that this way of proceeding hinders the launch of innovative technical solutions. In response, eBay made some internal changes. It hired experienced people with in-depth knowledge of the means to translate customer requirements into technical solutions. It also restructured the organization chart to ensure better synergy between technological know-how and ideas in the various operational units. These measures aim to promote an internal culture and environment which is open and receptive to the launch of technological innovations. Among the examples of technical solutions dedicated to improving the consumer experience, we can mention the sending of a software gadget on the rebates of the consumer.

Classroom Questions Case Study 2: eBay the Supreme Electronics Company, p. 119-121 Questions:

1. How can eBay use efficiency and effectiveness metrics to monitor the performance of its online sales? Would the same parameters apply to its Paypal subsidiary and why?

2. Explain the concept of "self-governing community" and suggest other examples where this concept could be applied?

3. As organizations like eBay grow and become larger and less agile, how can they maintain their technological edge in an age when technology is easily emulated?