While as recently as 2000, eBay had

virtually no international operations, by 2005, the

firm had sites in 31 countries around the world ranging from Brazil to Germany and

China. eBay's 2005 foreign operations generated well over $1 billion in revenues,

accounting for 46% of eBay's trading r

evenue. And of eBay's 135 million registered

users, about half lives outside the United States. Since eBay's international sale are

growing at twice the rate at domestic operations, its international sales will soon surpass

domestic sales.

eBay has succeed

ed abroad because its global strategy is flexible enough to adapt to

countries with vastly different cultures, while retaining the core elements of its business

model. The global strategy is based on a playbook that is a how to manual that covers

such topi

cs as online marketing, category management and community outreach. The

playbook which is constantly updated, consists of several hundred web pages that

summarized the collective wisdom of all eBay's worldwide managers.

The playbook details how to drive t

raffic to the local eBay site through online ads at a

country's most popular websites and search engines. The playbook also dictates that

products, information, and chat groups be created by buyers and sellers in the country

Thus eBay looks and feel like p

articular foreign country's website brand. This strategy

also avoids problems associated with a cookie

-

cutter approach to a website planning on a

global level.

Meg Whiteman who, became CEO in 1998, originally wanted to perfect eBay's concept

in the United

States before going abroad. However she soon realized that many small

competitors were springing up around the world. She became concerned that unless eBay

went global, she would forfeit many opportunities to these small local firms or major

firms such as

Amzon & Yahoo.

eBay's first foreign country was Germany chosen in part due to country's 40 million

internet users. eBay purchased Alando, an eBay copycat site for $47 billion in June 1999.

A German business student has started Alnado four months back. From

the start eBay

was careful to adapt its site to country's culture. For example a lot of time and effort

went in to figuring out how to structure categories based on German customers' needs.

Today Germany is eBay's largest international site with estimate

d annual total sale of $7

billion versus $20 billion for the United States.

Shortly after purchasing Alndo, eBay launched its own site in Great Britain and

Australia. In 2001 eBay purchased Korea's Internet Auction company and Europe's

iBazar (which gave e

Bay immediate access to Italy, Netherlands and Spain). eBay then

purchased a minority interest in MercadoLibre, Latin America's leading auction firm. In

total eBay has invested nearly $2 billion in its international acquisitions

questions

1

.

Comment on the

choice of Germany as eBay's first international market.

2

.

Evaluate the pros and cons of eBay's playbook strategy.

3

.

Describe the pros and cons of eBay's entering in international market by purchasing a

foreign firm rather than building an operation

from scratch.

4

.

Comment on this statement ''eBay has succeeded abroad because its global strategy is

flexible enough to adapt to countries with vastly different cultures, while retaining the

core elements of its business model.

''