eBay business model and market operations

Ebay

Commerce is one of the domains that have discovered from the beginning the potential of it, by exploiting its innovations and advantages. The past years have favored globalization, communications' integration, and the unprecedented development of it. Internet costs have significantly diminished, which will determine a continuous increase of the number of users. This is the period when online auction and shopping websites have developed and gained more space in spite of traditional auction and shopping units.

Such a website is eBay. The company was founded in 1995 in San Jose, California, with the purpose of becoming an online auction and shopping website that addresses both people and businesses worldwide. Since then, the company has significantly expanded, currently being present in the most important regions in the world: Asia Pacific, that includes Australia, China, Hong Kong, India, Malaysia, New Zealand, Philippines, Singapore, South Korea, and Taiwan; Europe, that includes Austria, Belgium, France, Germany, Ireland, Italy, Netherlands, Poland, Spain, Sweden, Switzerland, and the United Kingdom; and North America, that includes Canada and the United States (eBay Inc., 2007). EBay's Latin American investment partner is Mercado Libre.

As eBay has put it, the company's mission is to "provide a global trading platform where practically anyone can trade practically anything (eBay Canada, 2007). In addition to this, the company's mission also refers to supporting communities built on commerce, "sustained by trust, and inspired by opportunity" (eBay Inc., 2007). Pierre Omidyar's vision, eBay's founder, is to "create an efficient, honest market where everyone has to play by the same rules" (Schopen, 2003). In other words, eBay's strategic vision is "growing a trusted ecosystem" (ReveNews, 2006).

EBay is a marketplace where people and businesses can buy or sell items that are included in the following categories: antiques (furniture, rugs, carpets, silver), art (paintings, posters, prints), baby (feeding, gear, strollers), books of all types, business and industrial (construction, food service and retail, manufacturing and metalworking, office, printing, and shipping), cameras and photo (camcorders, digital cameras and accessories, lenses, and filters), cell phones and PDAs (accessories and parts), clothing, shoes, and accessories, coins and paper money, collectibles (advertising, casino, comics, decorative), computers and networking, consumer electronics (car electronics, home audio, televisions), crafts (drawing, painting, scrap-booking, sewing, woodworking), dolls and bears, DVDs and movies, eBay motors, entertainment memorabilia, gift certificates, health and beauty, home and garden, jewelry and watches, music, musical instruments, pottery and glass, real estate, specialty services, sporting goods, stamps, tickets, toys and hobbies, travel, video games, and others.

The services provided by eBay include eBay Express, eBay Blogs, and eBay Mobile. eBay Express is a website launched in 2006 with the intention of becoming an online shopping site for users with United States Addresses. In 2006 eBay Blogs was also launched, and it includes Discussion Boards, Groups, Answer Center, Chat Rooms, and Reviews & Guides. Another service provided by the company is eBay Mobile that provides SMS alerts, a WAP site, and J2ME clients.

The company's size is increasing, reaching 11,600 employees in 2006 (Wikipedia, 2007). The company's latest financial results reveal for the first quarter of 2007 net revenues of $1.77 billion, with a growth rate of 27% per year (eBay Inc., 2007).