eBay

HEC MONTRÉAL – MBA E-Commerce Jacques Robert & Jean Talbot, HEC Montréal The scope of eBay From December 31, 1998 to December 31, 2001, the number of confirmed registered eBay users grew from approximately 2 million to approximately 42.4 million. In 2001, eBay users listed more than 423 million items and completed transactions with an aggregate value of more than $9.3 billion. The number of categories where eBay users can list goods for sale has grown from 10 to more than 18,000 as of December 31, 2001.

HEC MONTRÉAL – MBA E-Commerce Jacques Robert & Jean Talbot, HEC Montréal Business Overview What is eBay ?What is eBay ? How did it started ?How did it started ? How does it work ?How does it work ? What are its main features ?What are its main features ?

HEC MONTRÉAL – MBA E-Commerce Jacques Robert & Jean Talbot, HEC Montréal An Internet-based, centralized marketplace offers the following benefits: Facilitates buyers and sellers meeting, listing items for sale, exchanging information, interacting with each other and, ultimately, consummating transactions; Allows buyers and sellers to trade directly, bypassing traditional intermediaries and lowering costs for both parties; Is global in reach, offering buyers a significantly broader selection of goods to purchase and providing sellers the opportunity to sell their goods efficiently to a broader base of buyers; Offers significant convenience, allowing trading at all hours and providing continuously updated information; Fosters a sense of community through direct buyer and seller communication, thereby enabling interaction between individuals with mutual interests; and Establishes fair market prices for items where no efficient market exists, for example, for rare items, distressed and surplus goods.

HEC MONTRÉAL – MBA E-Commerce Jacques Robert & Jean Talbot, HEC Montréal Auction mechanisms Open biddingOpen bidding Second-price auction; fixed end-timeSecond-price auction; fixed end-time – Buy-now – Reserve-price Multi-unit auctionsMulti-unit auctions – Dutch auction

HEC MONTRÉAL – MBA E-Commerce Jacques Robert & Jean Talbot, HEC Montréal Annual Report 2002 The year 2002 was a defining time in eBay's history, a time when all the aspects of the business came together to demonstrate the company's true potential. The eBay community led the company to another year of record performance, rejected in extraordinary growth across all metrics. Registered users grew to nearly 62 million by the end of the year, an increase of 46% from the year-ago level. And those users listed more than 638 million items in 2002, a 51% year-over-year increase. Gross merchandise sales, which is the value of all items sold on eBay, totaled nearly $15 billion in 2002, a 60% increase over For the first time in our history, net revenues surpassed $1 billion, totaling $1.21 billion for the full year.

HEC MONTRÉAL – MBA E-Commerce Jacques Robert & Jean Talbot, HEC Montréal eBay is now a global, mainstream shopping destination A truly global marketplace, eBay ended 2002 with a presence in 27 markets around the world and 62 million users in more than 150 countries. In total, our users can find more than 16 million items listed in more than 27,000 categories on any given day, from collectibles to clothing, and everyday household items to automobiles. Providing this broad and ever-changing selection are eBay sellers, now representing every link in the distribution chain, from large manufacturers and wholesalers, to small businesses and individual merchants.

HEC MONTRÉAL – MBA E-Commerce Jacques Robert & Jean Talbot, HEC Montréal

HEC MONTRÉAL – MBA E-Commerce Jacques Robert & Jean Talbot, HEC Montréal Fees Listing fees (based on Minimum price, opening value or reserve price)Listing fees (based on Minimum price, opening value or reserve price) Feature fees (for special features or advertising)Feature fees (for special features or advertising) Final values fees (as a % of selling price).Final values fees (as a % of selling price). See Annual reportSee Annual reportAnnual reportAnnual report

HEC MONTRÉAL – MBA E-Commerce Jacques Robert & Jean Talbot, HEC Montréal Trust and Safety Programs Feedback Forum Check the "reputation" or business practices of any buyer or seller at eBay.ca.Feedback Forum Check the "reputation" or business practices of any buyer or seller at eBay.ca.Feedback ForumFeedback Forum Safe HarbourSafe HarbourSafe HarbourSafe Harbour – Fraud Protection Program You are covered for up to C$300 on most items! (applies to most users, subject to guidelines) · Verified Rights Owner (VeRO) Programme Make sure that items do not violate intellectual property rights as there may be liability involved. · Dispute Resolution An independent, neutral third party will help you resolve disputes that may arise. Fraud Protection Program Verified Rights Owner (VeRO) Programme Dispute Resolution Fraud Protection Program Verified Rights Owner (VeRO) Programme Dispute Resolution

HEC MONTRÉAL – MBA E-Commerce Jacques Robert & Jean Talbot, HEC Montréal How can a feedback forum work Numerical example Selling price for a seller with a perfect record after 4 sales = 100$.Selling price for a seller with a perfect record after 4 sales = 100$. Selling price for a seller with a perfect record after less than 4 sales = 85$.Selling price for a seller with a perfect record after less than 4 sales = 85$. Selling price for a seller with an imperfect record = 0 $Selling price for a seller with an imperfect record = 0 $ Gains of a cheating seller = 50$Gains of a cheating seller = 50$ Gains of cheating = 50$ < Cost of assuming a new identity and building a new reputationGains of cheating = 50$ < Cost of assuming a new identity and building a new reputation = 60$ = 4x15$.= 60$ = 4x15$.

HEC MONTRÉAL – MBA E-Commerce Jacques Robert & Jean Talbot, HEC Montréal

HEC MONTRÉAL – MBA E-Commerce Jacques Robert & Jean Talbot, HEC Montréal What makes eBay on a league of its own ?