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eBay

eBay Analysis

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1. Introduction

2. Business Model

3. Value chain

4. Competitive forces

5. Financial Situation

6. Challenges

7. Long-term Growth

8. Recommendations

Table

of

Contents

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Founded in 1995by Pierre Omidyar

#1 in e-commerce, online payment andvoice over Internet

Storenoinventory & Produce noproducts

16,200people (including temporary employees)

eBay

Overview

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81,000,000average monthly visitors

133,096,249concurrent listings

$60,146,000,000 PayPal transactions

eBay

Overview

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eBay:

technology has always been a key

enabler of our growth and a tool toconnect and empower millions of

people globally

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Marketplaces

Provide platforms for online commerce

PaymentsProvide online payment solutions

CommunicationsProvide low-cost connectivity

eBay

Businesses

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Seller Buyer

Product

categories

Communication

Sells

Pays

Feedback

Fees

Acquisition &

PartnershipsNetwork

eBay Business Model

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Strategic Alliance and Acquisition

Legal

Human Resource

Technology

Marketing

Word of

mouth

Partnerships

Classifieds

websites

Product

Categories

Old and

new

Variable

Purchasing

process

Traditional

auction

Buy it now

Fixed price

Communicati

on

Ask a

question

Skype

Click to call

Payment

Variable

Reliable

Peer

review

Customer

services

A Rules,

Trust and

Safety

committee

VoicesCommunity

Wiki

My

Collectible

ValueAdded

eBay Value chain

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New Market Entrants- Froogle

- The industry is very attractive

with no significant barriers to

enter

Substitutions- Traditional

retail

- Switching cost

from online

auction to

traditional retail

is high

Buyers

- Strong buyerbargaining power

with many

options in the

industry

Suppliers-Strong bargaining power for

software suppliers

- Weak bargaining power for

product suppliers

Rivalries- Strong competitors (Amazon,

Yahoo, MSN, FNAC)

- Others (ubid.com, overstock.com,

CQout.com, bidville.com)

eBay Competitive Forces

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Net Income

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

0

100

200

300

400

500

600

08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3

$ Millions

Net income

Link relative

Year to year

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MARKETPLACES

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

0

200

400

600

800

1000

1200

1400

1600

08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3

$ Millions

Internet

Auction

Link relative

Year to year

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PAYMENTS

-5%

0%

5%

10%

15%

20%

25%

30%

35%

520

540

560

580

600

620

640

660

680

700

08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3

$ Millions

Paypal

Link relative

Year to Year

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INCOME FROM OPERATION

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

1700

1800

1900

2000

2100

2200

2300

07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3

$ Millions

Total operationincome

Link Relative

Year to Year

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STOCK PRICE IN 10 YEARS

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STOCK PRICE IN 5 YEARS

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STOCK PRICE IN 1 YEAR

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Exposure to large contingent liabilitiesdue to litigations

Insufficient screening process to controlcounterfeit products

Weaknesses

Exposure to internet fraud andsecurity concerns.

Increased business risks because oftechnological obsolesces andreliance on third parties for licenses

Unavailability of services leads toloss of income

Increasing competition

Threats

Challenges

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ValuableAssets

- Strong marketposition

- Effective Integration

of segments- Efficient business

model

- Rapid growth ofinternet display and

classifieds ads

- Increasing popularityof used goods

- Increasing reliance onalternative payment

systems due to safetyissues

- Rapid international

expansion

Rareness

- Strongmarketposition

- Efficient

businessmodel

Imitability

- Efficientbusinessmodel

OrganizationSupport

Can eBay still Grow?

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Make eBay interface easier to use

Improve value and selection by combining

fixed price with auction-stylelisting

Expand Payment segment, i.e. Paypal

Recommendations

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Expand product and service base

Acquisition or mergers must fit strategicbusiness of the company.

Diversify, but unprofitable/unfit businessesshould be closed

Recommendations