Ebay Analysis Report

Executive Summary:

eBay was the world’s largest and most popular person-to-person trading community on the Internet. Founded by Pierre Omidyar in 1995, it develops a web-based community that connects buyers and sellers in an efficient and engaging auction format to buy and sell personal items, collectibles and antiques as well as other goods normally sold through flea markets, antique stores, and classified advertisements. eBay started out as a pet project by Pierre to allow his wife to trade collectibles online.

Our group has come out with 3 hypotheses:

1) Yahoo! is eBay’s most feared competitor

2) Classified 2000 is eBay’s most feared competitor

3) Amazon is eBay’s most feared competitor

Hypothesis 1: Yahoo! is eBay’s most feared competitor

The general public has the assumption that Yahoo! is eBay’s most feared competitor due to its “well known internet brand in the world, second to AOL”. (Bradley, 2001, pg 11) Yahoo! is also at the advantage as it provides auction sites that are completely free for its users as compared to eBay which charges a small fee for posting items to their sellers and also a small percentage to the final sale. (Bradley, 2001, pg 27)

However, eBay did not see Yahoo! as such a strong competitor as it spotted the vital mistake that Yahoo! had not realized. As Yahoo! is an anonymous email domain, it is difficult to track the credibility of the seller. Therefore, it is difficult for the buyer to trust in the auction site of Yahoo!’s. Furthermore, Yahoo! also outsourced its maintenance of the auction site to OnSale, who already had problems with their software support, as mentioned by Meg Whitman (Bradley, 2001, pg 12). It is also observed in exhibit 9 that the auction length of Yahoo! is far longer than eBay and Amazon, making it less credible, and inefficient to use Yahoo! for such transactions. Therefore, we have sufficient evidence to reject hypothesis 1.

Hypothesis 2: Classified 2000 is eBay’s most feared competitor

Classified 2000 was also one of the companies that eBay was wary of during its earlier years of management as it has powerful features such as a robust classified-specific search engine that allowed users to make narrow searches which eBay lacks (Bradley,2001, pg 11).

However, it did not pose such a great threat to eBay as its software was also running into certain problems and thus not being able to serve to its full potential as the website did not pose a significant impact to the auction site industry (Bradley, 2001, pg11). Representative of eBay, Skoll, has also identified this vital problem in the Classified 2000 system and thus hypothesis 2 is also rejected with sufficient