PROJECT ON DIGITAL BUSINESS MANAGEMENT

Summary Founded by Pierre Omidyar in 1995 His wife needed a better way to lookup and trade collectibles; decided to put his computer science skills to use, never thought it would lead to a multi-billion dollar E-Commerce company Auction-based online sales of products (and sometimes services) where users try to outbid one another by placing a higher maximum amount; Dutch and Reverse-auction style also recently available in some regions Transaction fees for listing (regardless of whether item sells or not) and additional fees for Premium Auction features (i.e. extra photos, BuyItNow, Feature It!, etc) or Premium Seller memberships

History DATEEVENTSTOCK ($) 1995Founded by Pierre Omidyar 1997Menl park, calif (VC) 22% stock acquisition 1998CEO Meg Whitman (July); IPO Aliance with AOL Global expansion to over 2 dozen countires Feb – 2002Withdrew from Japanese & Hong Kong market Jul – 2002Acquired PayPal Acquired Skype Expanded World wide Completed sale of Skype Acquired German online shopping (

Products & Services eBay started out selling Collectibles and Antiques Has since grown to include incredibly diverse categories of items: 1.Collectibles Antiques Art Coins Toys & dolls Memorailia 2. Motor vehicles cars Boats Parts 3.Electronics Cameras Cell phones & PDAs Computers 4.Entertainment Movies, Music & Games DVD CD VHS Event Tickets 5.Books 6.Clothing Jewelry Shoes Accessories 7.Home Improvement Decor Crafts Gardening

eBay: Target Segments Primary target markets are Online Auction & Shopping communities. eBay has business strategies to target specific segments of each. Key segment is “Antiques & Collectibles”. (It was the lack of a good community-based pet collectibles company that inspired Pierre Omidyar to develop eBay. Collectibles still among highest in gross merchandise sales, boasts by far the most veteran sellers.) Motor lovers: Using credibility of leading car collector Kruse Inc., eBay expanded its categorical offerings with eBay Motors. eBay Motors became one of its most successful target segments with $2,500M Global Gross Merchandise Sales in Art lovers: eBay also had a somewhat failed strategic partnership targeting Art Collectors directly.

eBay’s Business Model

Success Story: Commission Junction Partnered with eBay in 2001 as the exclusive Affiliate Network for eBay’s affiliate program. Allows partners to revenue-share by creating links to Auctions, Seller sites and/or eBay pages (such as category listings, etc). eBay in charge of payouts for specific actions (i.e. 9 cent click- throughs.vs. $13 active user signups.vs. 5% purchases). Commission Junction gains an even smaller ratio per eBay payout to one of its affiliates, but, which adds up over time. Network externalities for both companies.

Summary Online retailer of millions of products (books, toys, Cookware etc..) Founded in 1995 by Jeff Bezos, in a computer science and electrical engineering graduate from Princeton University. Vision - To build the world’s most customer–centric company - To establish a place where customers could buy anything

Located in Seattle - Close to the largest book wholesalers in Roseburg, Oregon - The sales tax rate of small state is cheaper than big state - Sites in 6 -countries (US, Canada, UK, France, Germany, Japan); ship to > 200 countries Percentage of sales responsible majority of revenue Financial Status (Year of 2006) - Net Sales:$8,49billion - Net Income:$359million - Achieve a surplus since the 4 th quarter of 2002

History DATE EVENTSTOCK ($) Founded then Launched by Jeff Bezos May, 1997IPO3.917 Sep, 1997Collaborative Filter recommendations launched9.250 Oct, 1997Millionth customer personally receives order from Bezos’s hands9.896 Nov, 1997First holiday gift center opened8.833 Mar, 1998Amazon.com kids launched12.708

DATEEVENTSTOCK ($) Jun, 1998Music sales launched Nov, 1998Video sales launched Dec, 1998Acquired IMDB, world’s biggest movie database Global growth in key international markets Merchant strategy; major corporate partner Acquired a video game development company Acquired Zappos and Snaptell Acquired touches Acquired Kiva syatems223.89

Amazon’s Business Model

Business Process The Amazon Business Process is built around three main operation: Browsing : User looks for books available at Amazon (searched, recommended, or browsed by category) Manage Account : check content of user shopping cart, stock of sellers, add and remove products Shop : First browse to find product(s), place in the shopping basket, then complete a purchase (payment/delivery)

Success Story : Toys-R-Us 1999 Christmas on-line orders flushed into newly establishe ToysRus.com Announced a joint-venture with Amazon for online sales in 2000 Used AWS and Amazon site itself for Web operations, order fulfillment, & customer service Toys-R-us controls buying and managing inventory

65 million and growing number of visitors every year Number one site in its category Explosive growth in sales reaching $300 million Posted profit for the fourth quarter of 2002

Side-by-Side

Conclusion The fight of market share between eBay & Amazon. The buy out of toys-r-us by eBay. They are not fighting with each other but with themselves.