The Challenges Facing Ebay in 2008: Time for a Change in Strategy?

Case 15: The Challenges facing eBay in 2008: Time for a Change in Strategy?

eBay Inc. is an American Internet company that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide. The eBay company not only allowing everyday consumers to purchase and sell items, but it also allowed big companies to clear up their stock to bargain shoppers.

Current Situation:

*Which is the current strategy that the company is pursuing?

President of eBay, Donahoe have major of initiatives that were helping eBay transaction from a simple auction business to a portfolio of retail site. These initiatives included the acquisition of StubHub (eBay Express) a site featuring new merchandise and the introduction of online advertisement through partnerships with Yahoo and Google. The company offered an automated checkout service to help expedite communication, payment and delivery between buyers and sellers. Donahoe’s introduction of a fee structure that shifted the cost from the initial listing to a fee based on the final value of the item sold and a fundamental change in eBay’s feedback system that would no longer allow sellers to leave negative or even neutral, feedback for buyers.

*What is the current situation as a result from that strategy?

In early 2008, the company had expanded worldwide, there are millions of collectibles, decor, appliances, computers, furnishings, and equipment, vehicles, and other miscellaneous items are listed, bought, or sold daily. The eBay company not only allowing everyday consumers to purchase and sell items, but it also allowed big companies to clear up their stock to bargain shoppers.

After a decade of impressive growth fueled by international expansion, acquisitions of new businesses and internal growth, by 2008 eBay employed 15000 people and had revenues of $5.9 billion. The most important challenge that has to face eBay is the slowing growth in eBay’s core business of online auction. This slowing growth in the company’s core division is highlighted by 1% decrease in gross merchandise volume. eBay’s share of Us e-commerce market had fallen from 19% to 17% between 2006 and 2008, and as reflection of these concern, between November 2007 and November 2008, eBay’s stock price dropped by more than 50% from its 52.week high of $35.98 to close at $15.01.

Corporate Governance:

Board of Directors

*John Donahoe, has served as eBay’s President and Chief Executive Officer since March 2008

*Pierre M. Omidyar founded eBay as a sole proprietorship in September 1995.

*Fred D. Anderson member of