It’s hard to believe that one of the most well-known dot-coms has now been established 15 years. Pierre Omidyar, a 28-year-old French-born software engineer living in California, coded the site while working for another company, eventually launching the site for business on Monday, 4 September 1995 with the more direct name ‘Auction Web’. Legend reports that the site attracted no visitors in its first 24 hours. The site became eBay in 1997. In 2014 eBay had 155 million active buyers, an increase from 90 million active in 2009. This shows how established pure plays have continued to grow with global adoption of the web. 

This summary and many others in the text are based on the SEC filing of the business. The Security and Exchange Commission (SEC) required by company law in the US gives deep, relatively hype-free insights on the main online platforms based in the US and is recommended for students studying these types of business.

eBay describes its purpose as to ‘pioneer new communities around the world built on commerce, sustained by trust, and inspired by opportunity’. eBay’s 2014 report describes the company’s view on current use of e-commerce: 

Driven by the ubiquity of the Internet and the proliferation of mobile devices, we believe that the way consumers engage with each other, brands and services is fundamentally changing, blurring the lines between offline retail and online e-commerce, and effectively creating one market for commerce and reinforcing the connections between commerce and payments. We believe that this trend has expanded our addressable market. 

At the time of writing eBay comprises two major businesses: 

1 The eBay Marketplaces. The mission for the core eBay business is to ‘create the world’s online marketplace’. In 2008, eBay’s SEC filing notes some of the success factors for this business, for which eBay seeks to manage the functionality, safety, ease-of-use and reliability of the trading platform. By 2011 the strategic priorities had changed to trust, value, selection and convenience. 

2 PayPal. The mission is to ‘create the new global standard for online payments’. This company was acquired in 2003 but was repurchased at a later date.  

This case focuses on the best known eBay business, the eBay Marketplace. 

Question 

Discuss how eBay uses different parts of their site to focus on certain activities and how this has contributed to continued growth.