1. Evaluate eBay’s marketing strategies to date.

What changes, if any, would you suggest? EBay was started in 1995 by an entrepreneur working from his home. It has developed into a business handling

$24 billion of goods annually, with a net profit of

$441.8 million on revenues of $2.17 billion per year

(2003 figures, with amounts growing rapidly). Its phenomenal success has been based upon its use of the World Wide Web to create a new online marketplace.

In essence, a market can be defined as the sum of all of the people who have possible interest in buying or selling a particular product or service and who are in contact with each other. The use of the World Wide Web has enabled eBay to broaden markets to include people and organizations that otherwise would not have known of buying or selling opportunities. As could be expected, the expanded markets have usually provided benefits to both sellers and buyers. Meg Whitman, eBay’s CEO, says ‘At our core, we help make inefficient markets efficient’ (Hof, 2003a).

The company quickly developed an international presence and now derives 40% of its earnings from overseas. EBay faces both opportunities and challenges in selection of additional markets to serve, types of services to be provided, security issues, growing competition, and further expansion of operations overseas.