IS 482 Yazeed Alabdulkarim Please join the IS482_KSU group at googlegroups.com before 10/10/2013 or you will receive 50% deduction penalty.

Tutorial Lectures Group Project ◦ Max 4 students per group. ◦ Worth 10% of your grade. ◦ Some grades of the project will be assigned to class attendance. Exercises and case studies.

Case Study E-Bay An online auction platform that facilitates transaction between buyers and sellers of goods and services. Case study borrowed from :

Mission &Vision: Vision: eBay pioneers communities built on commerce, sustained by trust, and inspired by opportunity. eBay brings together millions of people every day on a local, national and international basis through an array of websites that focus on commerce, payments and communications Mission is to provide a global online trading platform where practically anyone can trade practically anything.

Business Model Seller uploads the picture and description of the item to be sold. Sale ends at predetermined time. High bidder and seller contact each other and make arrangements of shipment. Buyer sends funds to seller {money order, check, PayPal}, seller sends goods. Buyer and seller then grade each other through feedback forums.

Revenue model Fees for the seller to post the item, any promotion activities and final sale commission. Advertising revenue. Selling profit. Major money comes from listing and trading services.

Value Proposition Buyer ◦ Massive Selection ◦ More convenient ◦ Saves time and money ◦ Value added Seller - Broadens market - Lower Distribution Cost - maximize selling price - repeat business and clientele

Financials A presence in over 20 countries internationally contributes to 40% of total revenue. Main competitors, Yahoo! and Amazon have seen 65% and 61% revenue growth respectively over 6 year period from ‘98 to ‘03 eBay’s ’98 revenue was 47.4 million; ’03 jumped to $2.1 billion, a 134% average increase over previous year.

1-9 eBay’s Revenue eBay’s Revenue

Acquisition of PayPal PayPal uses existing electronic infrastructure of bank accounts and credit cards to allow “small” monetary exchanges online. Its convenient for small businesses and individuals, because they can collect online payments without difficult set-up. eBay acquired PayPal in 2002 and has integrated it throughout its website as a payment option for auctions.

1-11 Threats or Issues Threats or Issues Bargaining power of suppliers. Increasing competition from Amazon and yahoo. No barrier to entry in the industry. Buyer-seller frauds Technology failure or/and change

1-12 Issue of privacy and trust EBay’s view and approach. Trust is facilitated by fair information and principles. Users should be provided with notice and communication, choice and control, security, authentication and enforcement. eBay has earned this trust in time by consistent service.

1-13 eBay’s follow up Target key product categories for special users. Continue developing community tools. Enhance the community for women and senior citizens. Stress on adding services and features to make trading easier. Expand value added services. Major focus on trust and safety programs Maximum transparency.

1-14 EBay's tackle of security Feedback forum- check the business practices or reputation of any buyer or seller on eBay. Escrow- inspection of the product purchased before payment is being sent. Fraud protection program- coverage of users up to $2OO. Verified rights owner program- make sure that items do not violate intellectual property rights.

1-15 Competition Major Competitors- ◦ Amazon ◦ AOL ◦ Yahoo Traditional stores Wal-Mart Dell Macy’s Home Depot

1-16 Ebay Vs Yahoo Ebay Vs Yahoo contentEbayYahoo FeeBased on the reserve price of the item No charge to any buyers or sellers commissionUp to 5% of closing price To buyer and seller when item is sold Chances of buy/sellMore likelyLess likely responseNot as efficientBetter than eBay insuranceyesnone Charge of postingyesno scopewideNot as wide

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