1. Going, Going, Gone! – Consumer Auctions Prof. Lattemann Organizational Design for Networks - Fall 2010 MariyaArnaudova

2. Consumer-To-Consumer Transactions: Long ago… C2C

3. Consumer-To-Consumer Transactions: Online Auctions C2C Internet Newsgroups: search listings (burdensome) Web-based auctions:  listing and transaction fees  independent arrangement of shipment and payment  special-interest sites Seller 1 Buyer 1 Transactions platform Intermediaries Seller 2 Buyer 2 Seller 3 Buyer 3

5. Initially traded collectibles (e.g. PEZ)

6. 1996: Gross Margin 80%-96%

7. January 1997 hosted 200 000 auctions

9. Mission: World's largest online marketplace where practically anyone can buy and sell practically anything

10. 2009:the total worth of goods sold on eBay was $60 billion -- $2,000 every second.

11. Revenue: advertising, listing and value fees, merchant fees, revenue sharing agreements, contractual service fees and classified and lead referral fees.

12. Current CEO: John Donahoe since 2008 eBay Annual Report 2009

13. Trading Community:How does it work? Services Proxy bidding: winning bidder pays the price of the second-highest bid plus a defined increment  price paid is determined only by competitors' bids and not by the amount of the new bid Auction-style listings: offer items for sale for a specified number of days Buy-It-Now Option Last bid displayed

14. Trading Community: Ensuring Trust Services Seller Rating: Transaction-related feedback Buy-It-Now Option Payment: PayPal Buyer Protection Policy Detailed Item Description

15. Trading Community:Diverse Possibilities Services eBay Stores: sellers’ showcase establish their own brand (auction or fixed price) ProStores: subscribers design own online stores  hesitant about real business?  easy connection with eBay Shopping.com: price comparison service  eBay sellers got access to buyers search of fixed price  fixed price listings increased eBay Motors: Buy and sell all types of vehicles  Autos, Used Cars, Motorcycles, Boats, Trucks, Parts

17. Free service for buyer, tax for seller

18. 2002 acquired by eBay

20. Competitors: Why the King stays? Competition Competitor threats Power Source of revenue Centrality Mobile platforms Consumer Security

22. C2CAustria Switzerland Alando.de 1999/2000 France Sweden = failure 3. Own Websites 1. Acquisitions  eBay has the administrative strength to cope with so many national rules

24. Aggressive ad campaigns

25. 40% auctions

26. Product oriented

27. Failed to recognize the Chinese market

28. Top management: no Chinese

29. Global platform ≠ local tastes

30. Free of charge

31. TV ads

32. User friendly: 10% auctions

34. Conclusion: Growth Sustained? Conclusion Share price change since the beginning of eBay – source: NASDAQ Highest peak Now what? Paper written According to the graph of the American Stock Exchange, do you think the growth is sustainable? Doesn’t it remind you of something we studied?

35. Theoretical debate: Perfect Market = e-commerce? Conclusion Perfect Market Participants without power to set prices Perfect Market Information Perfect Competition No barriers of entry/exit + + =  Price regulation according to the number of sellers/buyers

36. THANK YOU! and now don’t you wanna go buy something from eBay :D