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                      Team: EC STAR
                      Member: Kim, Jong Woo (Techno)
                               Jin, Yong Sun(MIS)
                               Myung, Sung Sin(MIS)

Electronic Commerce                              EC STAR

                      Why ?

Electronic Commerce           EC STAR

                      Most profitable company

                      Fastest growing company

                        Good Business Model

                       World wide community

                         Fun to Buy and Sell

Electronic Commerce                             EC STAR

                                  Issue in eBay
               How Yahoo! Japan Beat eBay at Its Own Game
                            JUNE 4, 2001 INTERNATIONAL -- ASIAN BUSINESS

             Market Share in Japan                                Buying COST
                   2000.12                                   On Auction korea ,iBazar

       eBay Japan     etc                                  Revenue
          3%          2%                                   ($20M)
                                              Market Share in Japan 2000.12

                Yahoo Japan
                95%($1.6B)                                          Buying
                                                                     Source :BusinessWeek
Electronic Commerce                                                                EC STAR
               Agenda                       1 2 3 4 5

       1. Overview of Auctions
       2. Overview of eBay
             Company Profile
             Financial Analysis
             Business Models
       3. Introduction of eBay site
             Auction process
             Major Services and Features
       4. Analysis of competition
       5. Strategy
             SWOT / 5 Force
             Recommendations

Electronic Commerce                             EC STAR
                      Overview of Auctions                             1 2 3 4 5

      Definition of Auction

       “ An auction is a market mechanism by which buyer make bids and
        sellers place offers “
       “ Auctions are characterized by the competitive nature by which the
        final price is reached “   - JAE LEE … Electronic Commerce the 2 nd edition –

      Types of Dynamic Pricing

                                      One                 Many

                         One                            Auctions

                                  Reverse              Exchange
                         Many     Auctions

Electronic Commerce                                                             EC STAR
             Overview of Auctions                      1 2 3 4 5

    Types of e-Auction

                      Business        Consumer         Government

               B2B                 B2C              G2B

               C2B                 C2C              G2C

Electronic Commerce                                             EC STAR
             Overview of Auctions                           1 2 3 4 5

    E- commerce Industry Background
             : The growth of Internet and Online Commerce

        • Number of server : 109,574,429 ( 2001.1 www, )
        • The number of user : 513.41M          ( 2001.8 )
        • The Total value of global e-commerce transactions :
           $657 billion (2000) -> $1.2 trillion (2001E)
        • B2B auctions are forecasted to grow ( Forester Research )
           $8.7 billion in 1998 -> $52.6billion ( 2002)

Electronic Commerce                                              EC STAR
             Overview of Auctions                        1 2 3 4 5

      Comparative Estimates Worldwide Total eCommerce
              Comparative Estimates Worldwide Total eCommerce
     ( $ Billion)

                                                  International Data
       2000                                       Goldman Sachs &
                 2000 2001 2002 2003 2004

Electronic Commerce                                             EC STAR
               Company profile                               1 2 3 4 5

     Foundation : September 1995
     Location : San Hose , Ca USA
     Registered Users : 29.7 M ( Nov 2001)
     Employee : 1,927 (June 2001 )
     History
        Sep 1995 : eBay was founded in Pierre Omidyar’s San Jose
                     living Room
        Feb 1998 : Meg Whitman became CEO
        Sep 1998 : Nasdaq ( $ 18 per Stock )
        Dec 1998 : 2.2M users , 33.7M Total items
        Dec 1999 : 10.0M users, 129.6 M total items
        Dec 2000 : 22.0M users, 265M items
        Nov 2001 : 29.7M users
                   17 Global Sites (Including Korea, Japan, France ,German)

Electronic Commerce                                                  EC STAR
             Company profile - Management of Company              1 2 3 4 5

                         Name: Pierre Omidyar
                         Title: Founder and Chairman
                         eBay responsibilities: Oversees strategic direction and
                          growth, model and site development, and community
                         Education: B.S., Computer Science, Tufts University.

                         Name: Meg Whitman
                         Title: President and CEO
                         eBay responsibilities: Build a successful business while
                          delivering on customer needs and expectations
                         Education: M.B.A., Harvard Business School.
                          B.A., Economics, Princeton University.

Electronic Commerce                                                        EC STAR
             Company profile – Mission & market            1 2 3 4 5

                      eBay's mission is to help practically anyone
                      trade practically anything on earth.

                      eBay enables trade on a local, national and
                      international basis. It features a variety of
                      international sites, specialty sites, categories
                      and services

Electronic Commerce                                                  EC STAR
               Financial Analysis - Revenue & Net Income    1 2 3 4 5

          Revenue(1000$)                        Net Income(1000$)

     500000                       431424
     400000                                  50000
                         224724              30000
                 86129                               7273   9567
     100000                                  10000
           0                                     0
                 1998    1999     2000               1998   1999   2000

Electronic Commerce                                                  EC STAR
             Financial Analysis         – ROA & PER             1 2 3 4 5

      Net Income/Revenue(%)                     Net Income/Share($)

     12                                         0.2                       0.19
              8.4                              0.15
      6                                         0.1
      4                 4.25                            0.07
                                               0.05              0.04
      0                                           0
           1998       1999     2000                   1998     1999     2000

Electronic Commerce                                                       EC STAR
             Financial Analysis   – Stock Price   1 2 3 4 5

Electronic Commerce                                   EC STAR
             Business Model – reason for eBay’s success   1 2 3 4 5

                        Largest Online Trading Forum

                      Compelling Trading Environment

                         Trust and Safety Programs

                      Cost-Effective, Convenient Trading

                          Strong Community Affinity

                          Intuitive User Experience

Electronic Commerce                                           EC STAR
             Business Model                          1 2 3 4 5

           Seller                                   Byuer
   • Nonrefundable Insertion Fee             • Browing and bidding

   • Additional listing options to promote   Is free of charge

   • Final Value Fee

Electronic Commerce                                         EC STAR
                      Profit Opportunity in process 1 2 3 4 5

             New profit                                       profit
             opportunity                              E-money
                                        Profit      89% of TR
                                Profit          9% of TR
      Requirement                           2% of Total
Electronic Commerce                                           EC STAR
             Introduction of eBay   1 2 3 4 5

Electronic Commerce                     EC STAR
               Auction Process                                                1 2 3 4 5


                                      9                                              Buyer

                                   .Pass account


                                                                       7. Delivery

                           4. Pay ( Check / Money order)

Electronic Commerce                                                                     EC STAR
             Major Categories   1 2 3 4 5

      Major Categories

Electronic Commerce                 EC STAR
             Specialty Sites                                   1 2 3 4 5

       Specialty Sites

                               :
                                  The eBay community benefits from a
                                  marketplace combining traditional auction-
                                  style trading and's fixed-price
                                  trading. offers an organized online
                                  marketplace to buy and sell high quality,
                                  previously owned mass-market goods

      eBay Stores :
       eBay Stores expands the marketplace for sellers by allowing them to
       create customized shopping destinations to merchandise their items on
      eBay Motors :
       eBay Motors is the Internet's largest auction-style marketplace for
       buying and selling all things automotive
Electronic Commerce                                                    EC STAR
             Major services and features                          1 2 3 4 5

                              SafeHarbor is eBay's comprehensive safety
           SafeHarbor         resource and protective arm.

       Feedback Forum : Check the "reputation" or business practices of any
       buyer or seller at eBay.

       Escrow : Inspect what you buy before sending payment by asking your
       seller to consider escrow services.

       Fraud Protection Program : You are covered for up to $200 on most items
       - free! (applies to most users, subject to guidelines)

       ID Verify : Get successfully verified and sell on eBay.

Electronic Commerce                                                   EC STAR
             Major services and features                         1 2 3 4 5


      Authentication Services
      Get a second opinion on your item by using outside expertise.

      Verified Rights Owner (VeRO) Program
      Make sure that items do not violate intellectual property rights as
      there may be liability involved.

      Dispute Resolution
      An independent service that provides a neutral place to work out
      disputes online efficiently and effectively.

Electronic Commerce                                                         EC STAR
             Major services and features                          1 2 3 4 5

      Billpoint :
       eBay's preferred online bill payment service that facilitates credit card
       payment between buyers and sellers

      eBay International :
       Users on eBay represent countries all over the world. With eBay's vision
       and global business strategy, the company continues to expand its
       service and brand abroad

      Buy It Now :
       Buy It Now is an exciting optional enhancement for item listings. It
       allows buyers to buy an item at a specified price without having to wait
       for an end of an auction

Electronic Commerce                                                       EC STAR
             Major services and features                         1 2 3 4 5

      eBay Professional Services
       Professional Services on eBay serves the fast growing and fragmented
       small business marketplace by providing a destination on eBay to find

      eBay Local Trading
       eBay has local sites in 60 markets in the U.S. These localized eBay sites
       allow users to easily find items located near them and browse through
       items of local interest

      eBay Premier
       eBay Premier is a specialty site on eBay, which showcases fine art,
       antiques, fine wines and rare collectibles from leading auction houses
       and dealers from around the world

      eBay Live Auctions
       Live Auctions provides live, real-time online bidding on items being sold
       on the sales floor of the world's leading auction houses

Electronic Commerce                                                      EC STAR
             Competitors                                      1 2 3 4 5

    eBay’s broad-based competitors include the vast majority of traditional
    dept and general merchandise as well as emerging online retailers

                      Amazon                     AOL

                  Wal-Mart                           Home Depot

                         Macy’s                    Dell
                                  Sam’s Club

Electronic Commerce                                                   EC STAR
             Competitors - Yahoo   1 2 3 4 5

Electronic Commerce                    EC STAR
               eBay versus Yahoo for Sellers(1/2) 1 2 3 4 5

                              eBay                                        Yahoo
    Duration    10 Days                                   14 Days
    Ending     eBay auctions end at the time the        Yahoo allows you to set the ending
     Time      auction was created                      time within a one-hour range.
               based on the starting or reserve         not charge any fees for listing auction
      Fee      price of an item each time an item       items to the buyer or seller
               is listed
               up to five percent of the final          to the buyer or seller when an item
                closing price                            is sold
               fee for reserve auctions
  Chances of
                More likely                               Less likely
  Buy & Sell

    When a     a page for the item gets created         a page for the item is created
   new Item    immediately,but it can take several      immediately. The item is also added to
   Is posted   hours before the item gets added to      the list of items and is searchable
               the list of items and is searchable      immediately.

                        Source : Cost Analysis June 10, 2001

Electronic Commerce                                                                        EC STAR
                 eBay versus Yahoo for Sellers (2/2) 1 2 3 4 5

                                eBay                                        Yahoo
                 nothing to stop bidders from         A bid is made within the last 5 mins of
    Sniping      waiting until the last seconds of an an auction, it is automatically
                 auction to make a bid.               extended by five minutes.
    Restart      cannot be automatically restarted         can automatically be restarted

     Dutch       Possible, but you must have a rating Possible, not need to have a certain
    auction      of at least ten before you can do this rating before you can create

                 Not respond as quickly as Yahoo.          Better performance than eBay
                 (browsing, searching, etc)

  Restrictions    More restrictions                         Fewer restrictions

                 to use another site to place a            able to count without placing a
                 Counter on your auction item page         Counter on your auction page

                          Source : Cost Analysis June 10, 2001

Electronic Commerce                                                                          EC STAR
               eBay versus Yahoo for Buyers                                      1 2 3 4 5

                                eBay                                       Yahoo
    Items       Over 6 times more items                   A lot fewer items

   Charging    Yes                                        No
   for posting
               More likely to find                       Not have as wide or deep of a selection

    Search     Titles or titles & description           Titles or titles & description
               Can limit within a category              Can limit within a category
     Brows     By title or by picture                    By title or by picture
     items     (if designated as part of the gallery )

   Insurance   Automatic insurance for sales              Not offer insurance

     Space     Not provide space for pictures:           Provides free space for auction item
       for     You must place your picture files         Pictures, so more items have pictures
    pictures   On some other site                        For you to see
                         Source : Cost Analysis June 10, 2001

Electronic Commerce                                                                         EC STAR
             SWOT Analysis                                     1 2 3 4 5

        First mover advantage              Decrease in growth rate
        Large and impenetrable             Trust issues between buyers
         market share                       & sellers
        the scale of bidders &sellers      Oriented in P2P market
        No traditional retailing cost      Community power

                                      S    W

                                     O     T
        e-Commerce is increasing
        Chances for M-commerce             Simple and easy to imitate
        Possibility to expand high cost    Fraud trading (Trust Issues)
         product                            System Security & reliability
        Small competitor’s dismiss

Electronic Commerce                                                    EC STAR
             5 Force Analysis                        1 2 3 4 5

                         (B2B, B2C, C2B,off-line…)

                           Threat of substitute

                          Products or services

    Bargaining power         Rivalry among
       of Suppliers       Existing Competition
                            (Yahoo, Amazon …)          (GE..)
       (GM, HP…)

                             Barriers to entry

Electronic Commerce                                         EC STAR
             Recommendation                                      1 2 3 4 5

                      To Be the World Leader in e-Market Place

                           S         G                 S
                                             U   M
                                     L                 Y
                                             S   O
                           R         O                 S
                                             I   D
                           V         B                 T
                                             N   E
                           I         A                 E
                                             E   L
                           C         L                 M
                           E         …

                           eBay : 22.0M users, 265M items

Electronic Commerce                                                  EC STAR
             Recommendation                                         1 2 3 4 5


                       Depending on the category of product
       Back Ground     Incresing of Community power
                       Trust issues between buyers & sellers

                      Broaden the eBay Trading Platform
          Stratecy    Foster eBay Community Affinity
                      Enhance Features and Functionality

                      Tarket key product categories for special users
                       Develop new community tools
                       Enhance the cummunity for women and old peoples
                       Add new features and services to help trade with greater ease
                       Expand Value-Addes Sevices ( community purchase)
                       Increase the Trust and Safety Programs

Electronic Commerce                                                          EC STAR
             Recommendation                                            1 2 3 4 5


                       Growth rate Decreases
       Back Ground
                       To utilize the advantages of internet in globalization

                       Homogeneity global market
                       Different strategies to enter new international markets

                       Enforce Marketing in foreign countries
          Things       Provide unified site and URL in each country
             To        Introduce country-specific services
            Do         Choose from building solely, acquiring a company or
                        partnering with strong local companis

Electronic Commerce                                                               EC STAR
             Recommendation                                          1 2 3 4 5

       Business Model & Strategic alliance

                       Limit of P2P market size
       Back Ground     Great potential maket of B2C and B2B
                       A new, rapidly evolving and intensely competitive area

          Stratecy     Expand Business Model from P2P to B2C and B2B
                       Good relationship with partner

                       Have a partnership with bank, c-card,e-mopney, mobile
          Things       communication company, google etc
             To        Expand gradually Business model from P2P to B2C
            Do         Develop the ebay’s private brand product.

Electronic Commerce                                                              EC STAR
             Recommendation                                                 1 2 3 4 5

         System Infrastructure

                       15 System downs between Aug 1998 and Nov 1999
       Back Ground     The threat of Hacking ( Deny of services )
                       The cost of system failure is so big

          Stratecy     Adapt to changing technologies and industry standard
                       Achieve to stability, availability and efficiency

                       Build backup system for important system such as CPU
                       Disk,D/B, Network System, Power, Communication Line
                       Downsize the computer system from Mainframe-level Sun
                       to Win2000 or Linux ( ex: Google has 4,000 Linux server)
                       Acquire specialist for System, DB, Network,Program and etc
                       Invest more money on System Infrastructure

Electronic Commerce                                                             EC STAR
                                                   2 3 4 5
             What are the uncertainties in e-biz 1

          Rapid technology innovation in web and mobile
            : Searching technology/mobile trading
          No homogeneity global market
            : Portal site May be more powerful than
          Multimedia innovation force much investment
            : Leverage effect more advantageous to portal
          The speed up of the Off-line shop’s innovation
            : All off-line shop operation on-line shop
          e-money payment system will be show to us
            : They will be most powerful alliance group

     Our Recommendation will prevent uncertainties change

Electronic Commerce                                              EC STAR

           Will be the Best e-biz Leading Company

Electronic Commerce                            EC STAR

Electronic Commerce   EC STAR

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