Ebay Marketing Strategy Essay

Table of Contents

1. Introduction

2. Company View
2.1 Founding and Management
2.2 Company Expansion
2.3 Company Figures and Strategic Changes

3. Market View
3.1 Market Potential
3.2 PESTEL Analysis
3.3 Competitive Forces
3.4 Financial Positioning
3.5 SWOT Analysis

4. Conclusions

5. Appendix

Table of Acronyms

illustration not visible in this excerpt

1. Introduction

In the middle of the 90’s, the importance of the Internet increased significantly. Due to the prognosticated prospects and expectations of the Internet, it did not need a long time until innumerable companies with business models focused on the Internet were established.[i] Only few of these Internet business models have reached an international size or work profitable so far.[ii]

However, one of the companies, which reached theses objectives, is eBay.[iii] Within this strategy paper, the development of the enterprise and the strategic figures are identified, analysed and evaluated. Furthermore, an evaluation of the environment, the market, the competition as well as financial indices was conducted, in order to evaluate the development potentials as well as the future chances and risks of the company.

2. Company View

2.1 Founding and Management

eBay was founded by Pierre Omidyar, who is still the chairman of the company, in San Jose in September 1995. The company’s business is an online person-to-person trading community, using the World Wide Web. Buyers and sellers are brought together in a manner where sellers are permitted to list items for sale, buyers to bid on items of interest and all eBay users to browse through listed items in a fully automated way. From the start, it was meant to be a marketplace for the sale of goods and services for individuals.

In 1998, Pierre and his cofounder Jeff Skoll brought in Meg Whitman to sustain the success. eBay was going public on the New York Stock Exchange in 1998 and has continued its growing. At the end of 2002, there are about 4.000 people working for eBay.[iv]

2.2 Company Expansion

eBay operated its first trading platform in the US and has expanded worldwide since 1999. In 2002, eBay was operating 10 websites in the American area, 11 platforms in Europe and 6 trading platforms in the Asia/Pacific area. Altogether, buyers and sellers were able to trade products and services in 27 countries worldwide on eBay in 2002 as shown in Figure 2.[v]

One of the most important critical success factors in the Internet business is to be the first mover in the market in order to quickly gain a high market share and to build a customer loyalty (Hill C. W. I, 2000). Since the middle 90’s, many Internet trading platforms have been launched in several countries. eBay did not only operate its expansion strategy in the form to establish their own platform into existing markets. eBay also took over some well established competitors, adapted their businesses to eBay’s strategy and re-branded them step by step.

As eBay is listed on the stock market and has reached a high market capitalisation, acquisitions were mostly conducted by issuing shares without cash transactions. Examples for this expansion strategy are the former German competitor Olando, which was taken over in 1999,[vi] and the French competitor iBazar, which was taken over in 2001.[vii]

How important it is to be the first mover can also be seen by the failed marketing entry of eBay into the Japanese market. eBay tried to expand into the Japanse market at a point in time where Yahoo already reached a market share of 95 percent. eBay was only able to gain a market share of 3 percent[viii] and finally decided to go out of the Japanese market in 2002.[ix]

2.3 Company Figures and Strategic Changes

The company increased the number of registered users from 40,000 in 1996 up to 62 million in 2002 by internal growth and its worldwide expansion strategy as shown in Figure 3. The number of listings on eBay was 300,000 in 1996 and reached 638 million listed items worldwide in 2002 as shown in Figure 4. The total value of items sold increased from $7 million in 1996 up to $15 billion in 2002 (Figure 5).[x]

Next to the worldwide expansion strategy, eBay’s business model experienced some strategic changes. Actually, eBay was a trading platform where only auctions took place. The company expanded the trading opportunities so that items could alternatively be traded by auctions or with the “buy it now” feature at fixed prices.[xi] The “buy it now” feature is closely connected with the introduction of the feature “eBay stores” which enables seller to establish their own virtual Internet shop on eBay.[xii] In the first Quarter 2003, approximately 26 percent of all transactions were already completed on eBay by fixed prices as shown in Figure 6.[xiii]

The vision of the founder Pierre Omidyar was that eBay should be a typical C2C market.[xiv] This starting base has been developed in the way that nowadays products and services are also be traded between companies to private customers that eBay can also be considered as B2C market. A small proportion of trading activities is also taking place between B2B and C2B. This conscious expansion of the business model also increases the number of new products traded on eBay.[xv]

3. Market View

3.1 Market Potential

Market potential can be determined by specification of the target group, regional aspects, growth and time concerning dimensions. eBay described its global market potential as followed.

As shown in Figure 7, the number of global Internet users was approximately 655 million at the end of 2002. In the 27 countries eBay is operating an online trading platform, there were about 442 million Internet users at the end of 2002. Comparing these figures to the 62 million registered users on eBay, the company covers 11 percent of the current global market potential. [xvi]

Another comparison of the market potential shows that the 31 million active users on eBay equal about 5 percent of the global market potential.[xvii] Briefly mentioned should be the fact that eBay’s used definition of the market potential covers only the today’s market and did not consider any future dimensions or the growing Internet penetration.[xviii]

3.2 PESTEL Analysis

Political / Legal Forces

The most important political and legal factors for eBay are the increasing risks of data security, [xix] the increasing danger of fraud [xx] as well as the increasing trade with illegal products[xxi] on the Internet. Another issue for eBay is that many users apply the trading platform professionally[xxii] and do not pay tax to the government. Government agencies increasingly concerned about tax evasion enhancing their investigations.[xxiii] Especially in Europe people can buy and sell products and services in traditional shops only during regulated shop hours, which currently means an advantage for eBay where users can do their trading for 24 hours, yet.[xxiv] Governments are going to liberalise the shop hours more and more within the next years.[xxv]

Economical Forces

The economical forces are the worldwide economic downturn [xxvi] and the decline in net pay in countries such as Germany, for instance.[xxvii] Especially in Europe, people has felt an increase of price level since the introduction of the Euro currency[xxviii] with the result that people are more price oriented by their buying decisions.[xxix] eBay is one of the companies which benefit from the weak economic situation.[xxx] Independently of the general economic cycle, we can also see a general shift of revenue from traditional retail trade to trading activities on the Internet.[xxxi] Another economical force is the still increasing importance of international trade.[xxxii]

Social Forces

The Internet continues to spread worldwide with high growth numbers and will reach a penetration rate such as the telephone and the television nowadays. Market research institutes expect an increase of the worldwide Internet penetration from 9.8 percent in 2002 up to 15.8 percent in 2006. Men are still using the Internet more than women, but the proportion of women using the Internet will be higher in the future than nowadays.[xxxiii]

Technological Forces

Technological factors are the increasing product and price transparency, which enables buyer to find sources of products easier and they will be better informed about product prices.[xxxiv] Especially new technologies such as Wireless LAN, DSL, UMTS and the convergence and complicity of technologies will increase the Internet penetration and substantially affect the intensity and the way we are using the Internet.[xxxv] Another problem could occur by an increase in patent protected technical knowledge and features. eBay could be affected by patent disputes, could be prohibition to use specific techniques[xxxvi] or could have to pay royalties for specific techniques.

Ecological Forces

No significant ecological forces affecting eBay were found.

Note: A graphical overview of the PESTEL Analysis (Johnson G. & Scholes K., 1999) is shown in Figure 8.

3.3 Competitive Forces

Rivalry / Competition

The competition between the big players is relatively high.[xxxvii] The big international players such as eBay, Amazon and Yahoo have increased their worldwide market share. The market share and importance of s maller companies such as Ricardo in Germany, for instance, have been declined.[xxxviii] Another development is the adaption of the business models, especially between the big players Amazon[xxxix] and eBay[xl].[xli]

Buyers

The power of buyers is medium to high. On one hand, the power in the C2C market on eBay will still increase. On the other hand, especially the B2C and B2B on eBay will become a more important force. Regarding the increasing penetration of women using the Internet[xlii] will affect eBay in the way that women have different trading preferences and different trading behaviours on eBay. Despite the increase in online marketing spendings,[xliii] eBay’s business model is relatively independent of incomes from advertisements. Revenue from 3rd party advertisings on eBay declined by 27 percent from 2001 to 2002[xliv] what means that this power of buyers against eBay is declining.

Potential Entrants

Generally, the power of potential entrants is rather medium as high and depends on the prospective entrant. Potential entrants for eBay are Internet portals, [xlv] search engines, [xlvi] media companies and especially possible combinations of them.[xlvii] Potential entrants could also be companies offering reverse auction systems.[xlviii] We also see the increasing efforts of manufacturer and OEM’s selling products directly on the Internet.[xlix]Large retail sellers and mail-order businesses are also trying to generate more revenue by their Internet pages.[l]Traditional auction companies are another party, which are trying to expand their business on the Internet,[li] but they currently have problems adapting their auctions on the Internet.[lii] On one hand, the original business model of eBay could be copied relatively easily. On the other hand, eBay’s largest barrier to entry is the large scale of buyers and seller.[liii]

Substitutes

The power of substitutes is rather low as medium. Reasons for choosing substitutes are especially fraud protection[liv] and that not all products are applicative to be traded on the Internet similarly.[lv] One disadvantage of buying on eBay is that people can not touch and feel the listed products and therefore many people prefer to buy their products especially at traditional retail outlets.[lvi] Another substitute for eBay is the mail order business where people can buy products via catalogue or telephone. For second-hand goods people can also choose the alternative to buy products at classified journals [lvii] or at flee markets.

Suppliers

The power of suppliers is relatively low. eBay has fixed costs for servers and payments for software solutions. Suppliers, which sell standardized products and services to eBay, have little power because of low switching costs. Suppliers, selling customized products and services to eBay, have a stronger power. Another power of suppliers could be occur by patent rights.[lviii] The power of national mail order firms, delivering the traded items, is relatively low. The power of vendors for payment systems is also low, especially since eBay took over Paypal.[lix] However, the suppliers itself have little ability to integrate forward into eBay’s industry.

Note: A graphical overview of Porter’s (1985) Five-Forces Analysis is shown in Figure 9.

3.4 Financial Positioning

Most former competitors from the Internet sector could not keep up eBay’s growth.[lx] In addition, many companies from the “old economy” have expanded their sales channels to the Internet, so that eBay can only be compared directly to a few competitors regarding the core business, revenue, profit, and market capitalization. The most important competitors are Yahoo, Amazon and possibly Microsoft Network (MSN).

There are many Internet companies, which are selling products on the Internet, even if there are not sold such a broad range of products as on eBay. One of them is Drugstore.com. The company is the leading online drugstore for health, beauty, wellness, personal care, and pharmacy products[lxi] with a market capitalisation of $400 in 2002.[lxii] Analysts often compare the company to eBay because it is also one of the most successful Internet companies. However, despite a revenue of $400 million, the company made a loss of $94 million last year.[lxiii]

On MSN’s Internet portal products and services are marketed by auction prices and fixed prices. The operating revenue reached $531 million, but the company also made a loss of $97 million in 2002.[lxiv] As MSN.com is part of the Microsoft network, the market capitalisation in not declared separately.

Yahoo is the second biggest competitor for eBay with a market capitalisation of about $19 billion.[lxv] The company’s revenue was $953 million in 2002. The company changed its business model from a pure search engine with revenue only from online advertisements and is now offering added services, which are not free of charge, and operates as a trading platform for products and services. However, Yahoo still made a loss of 43 million last year.[lxvi]

Amazon is the strongest competitor for eBay. The market capitalisation of Amazon is about $15 billion[lxvii] and the company reached a revenue of $4 billion last year. But up to now, this competitor is also still in the red and made a loss of $150 million in 2002.[lxviii]

eBay’s market capitalisation has nearly the size of Amazon and Yahoo together ($ 35.8 billion)[lxix] and is much bigger as Drugstore.com and many smaller “.com’s” or auction and trading platforms. eBay’s revenue was $1 billion in 2002 and contrary to all competitors, the company has been profitable since the beginning. Last year the profit was nearly $250 million.[lxx]

Note: A financial portfolio for all considered companies is shown in Figure 10.

3.5 SWOT Analysis

Strengths

eBay’s strengths are especially the brand awareness and the number of bidders & sellers. Competitors mostly struggle to find sellers because they don't have enough bidders to attract sellers. On the opposite note, competitors have trouble attracting bidders because there are not enough items. The reason for eBay’s strong reputation[lxxi] is the predominantly functioning feedback system.[lxxii] Another strength is that nowadays new and second-hand products are traded by auctions and at fixed prices. eBay’s trading platform enables trading round the clock, regardless traditional shopping hours,[lxxiii] whereby eBay does not have typical retailing costs.

Weaknesses

Buyers can not touch and feel the items on eBay. Despite the feedback system, there is also a distrust between buyers and sellers due to the risk of fraud.[lxxiv] Although the motivation for many eBay users is to buy products at a lower price as elsewhere in the market, even some second-hand goods often reach finals prices, which are higher than those of new goods.[lxxv]

Opportunities

Future opportunities for eBay are especially the increasing Internet penetration, [lxxvi] the increase in e-commerce [lxxvii] as well as prospective solutions for mobile commerce.[lxxviii] These factors will have an influence on how many people will trade on the Internet and eBay, how often, how long, and by what circumstances in life. Although these future prospects, the on going international expansion as well as entering new market fields and categories[lxxix], the pace of growth in profit, revenue, items etc. will become slower.[lxxx]

Threats

Threats for eBay could be an unbalanced relation between bidders & sellers on the trading platform or problems by fraud and mistrust between buyers and sellers. eBay increased their prices several times in the last years.[lxxxi] This or other issues could empower competitors and potential entrants or encourage off-site transactions.[lxxxii] Other threats could occur by an increase in complexity of categories and features, if trading on eBay would becomes more time consuming or difficult.[lxxxiii] Legal actions taken by 3rd parties due to patent right issues [lxxxiv] as well as the system security and reliability [lxxxv] are strong threats for eBay, too.

4. Conclusions

eBay’s business Model is working well since its founding. The company is let by an experienced management team and posses a substantial equity basis. One essential reason why eBay has been so successful and did not share the destiny of many bankrupted “.com’s” is, that the management considered many rules of the old economy and has spent only money the company possess.[lxxxvi] Regarding the market position, the company should be aware not starting to act and think like a monopolist. For instance, mostly due to the dominant market position eBay was able to increase their prices several times in the last years.[lxxxvii] Developments like these or other changes on eBay could work against the company itself.

The company’s reputation is quite good and the company possess a strong functioning community. As the vision of the founder was a community of individuals, the management has to manage the issues that more and more companies are encouraged to sell on eBay what could harm the community of individuals. The management should also be careful about too large online marketing measures because people seem to get stressed by the intensive online marketing pressure.[lxxxviii]

Despite a broad scale of products available on eBay, trading on eBay is relatively easy. As the company is still growing and expanding the business fields[lxxxix] it is vital for eBay, that trading on eBay will not become too difficult, time consuming and the product transparency will not decline by an increase of listed items or categories.[xc] It is also essential that the number of buyers and sellers in each category remain adequate balanced.

eBay has still a broad growing potential by the increasing Internet penetration[xci] and entering into new markets[xcii], even maybe at a slower pace as in the past.[xciii] However, the most vulnerable factors for eBay are data security[xciv], fraud,[xcv] patent right issues,[xcvi] illegal activities[xcvii] on eBay, and threats of technical breakdowns[xcviii].

Managing all these opportunities and threats well, the company has the potential to establish the business, increase the brand awareness, and expand the revenue as well as the profit worldwide.

[...]



[i]E-Commerce Times (2003)New Respect for the Internet Bubble-Blowers.
Posted on the Internet:
http://www.ecommercetimes.com/perl/story/20402.html

[ii]CNNmoney.com (2003) The next Internet bubble.
Posted on the Internet:
http://money.cnn.com/2003/06/10/technology/bubble

ZDNet.de (2002)Der Aufstieg und Fall der New Economy.
Posted on the Internet:
http://news.zdnet.de/story/0,,t101-s2109226,00.html

Manager Magazin (2001)Endlich Gewinne!
Posted on the Internet:
http://www.manager-magazin.de/magazin/artikel/0,2828,249618,00.html

[iii]Wirtschaftwoche (2003)Vom Flohmarkt zur Profi-Plattform: Das System eBay
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13071/SH/0/depot/0/bt/2/index.html

[iv]eBay.com (2003)Company Overview.
Posted on the Internet:
http://pages.ebay.com/community/aboutebay/overview/management.html

[v]eBay (2003)Presentation for Annual Internet Conference.
Posted on the Internet: http://www.shareholder.com/ebay/downloads/StandardPresentation051203a.pdf

[vi]ZDNet.de (1999)Online-Auktionshaus Alando vor Übernahme durch eBay.
Posted on the Internet:
http://news.zdnet.de/story/0%2C%2Ct105-s2047888%2C00.html

[vii]Manager Magazin (2001)eBay.com: Expansionsgelüste.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,117315,00.html
ZDNet.com (2001)eBay buys French auction site.
Posted on the Internet:
http://zdnet.com.com/2110-11-528377.html

[viii]Business Week Online (2001)How Yahoo! Japan beat eBay at its own game.
Posted on the Internet:
http://www.businessweek.com/magazine/content/01_23/b3735139.htm

[ix]Informationsdienst (2002)eBay scheitert in Japan.
Posted on the Internet:
http://www.intern.de/news/2601.html

[x]eBay (2003)eBay Corporate Presentation.
Posted on the Internet: http://www.shareholder.com/ebay/downloads/StandardPresentation051203a.pdf

[xi]Manager Magazin (2002)eBay: Festpreis-Offensive.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,188326,00.html

[xii]Manager Magazin (2003)eBay: Auf dem Weg zur Shopping-Mall Shop im Shop.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,139102,00.html

Wirtschaftswoche (2003)Vom Flohmarkt zur Profi-Plattform: Das System eBay.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/id/156/id/13071/bt/2/fl/0/fm/0/cn/cn_artikel/cn/bm_morecontent/artpage/1/SH/0/depot/0/index.html

[xiii]eBay (2003)eBay Corporate Presentation.
Posted on the Internet: http://www.shareholder.com/ebay/downloads/StandardPresentation051203a.pdf

[xiv]eBay.com (2003)Company Overview.
Posted on the Internet:
http://pages.ebay.com/community/aboutebay/overview/management.html

[xv]StaConsult (2003)Markstudien zu eBay.

Posted on the Internet:

http://www.propc.de/ebay_studie.htm

[xvi]eBay (2003)Presentation for Annual Internet Conference.
Posted on the Internet: http://www.shareholder.com/ebay/downloads/StandardPresentation051203a.pdf

[xvii]eBay (2003)Presentation for Annual Internet Conference.
Posted on the Internet: http://www.shareholder.com/ebay/downloads/StandardPresentation051203a.pdf

[xviii]Atfacts.de (2003)@facts: Studie zur Internetnutzung.
Posted on the Internet:
http://www.atfacts.de/001/pdf_studies/atfacts_extra_eCommerce_200203.pdf

Golem (2003)Internetnutzung: Nach Boom nun langsamerer Anstieg erwartet.
Posted on the Internet:
http://www.golem.de/0307/26604.html

[xix]CNN (2002)eBay patches password-security problem.
Posted on the Internet:
http://www.cnn.com/2002/TECH/internet/04/04/ebay.password.idg/index.html

Manager Magazin (2002)Hacker-Angriff: Eine lange geplante Verschwörung?
Posted on the Internet:
http://www.manager-magazin.de/geld/artikel/0,2828,64248,00.html

[xx]ABCNews (2002)Could Lawsuit Change eBay Forever?

Posted on the Internet:
http://abcnews.go.com/sections/business/TechTV/techtv_ebay020925.html

ABCNews (2002)New Twist on Auction Fraud.
Posted on the Internet:
http://abcnews.go.com/sections/business/TechTV/techtv_auctionfraud_021029.html

CNN (2002)eBay identity theft hits close to home.
Posted on the Internet: http://www.cnn.com/2002/TECH/internet/02/18/ebay.identity.theft.idg/index.html

CNN (2002)eBay warns users of Net scam.
Posted on the Internet:
http://www.cnn.com/2002/TECH/internet/12/11/ebay.scam/index.html

Manager Magazin (2002)Amerikaner prellt Auktionskunden um 225.000 Dollar.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,183918,00.html

Manager Magazin (2002)Kriminelle haben eBay-Nutzer um etwa 100.000 € erleichtert.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,214432,00.html
Manager Magazin (2001)Wie Sie sehen, sehen Sie nichts.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,150318,00.html

Spiegel.de (2003)Die Abzocke der falschen Treuhänder.
Posted on the Internet:
http://www.spiegel.de/netzwelt/politik/0,1518,258310,00.html

Wirtschaftswoche (2003)Internetauktionen eBay: Latte etwas höher gelegt.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13299/SH/0/depot/0/bt/2/index.html

Wirtschaftswoche (2003)Kanzlerkonto: eBay-Sicherheitslücken.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13300/SH/0/depot/0/bt/2/index.html

Wirtschaftswoche (2003 ) Vom Flohmarkt zur Profi-Plattform: Das System eBay.
Posted on the Internet:
http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13071/SH/0/depot/0/bt/2/index.html

[xxi]ABCNews (2002)eBay bans Nazi, hate Material.
Posted on the Internet: http://more.abcnews.go.com/sections/scitech/DailyNews/ebay_hate010504.html

Manager Magazin (2002)Auktionshaus hat die User nicht im Griff.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,177126,00.html

Manager Magazin (2002)Skandal oder Seifenblase?
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,199331,00.html

Manager Magazin (2001)Klage wegen Marken-Piraterie: Die Europa-Töchter des US-Konzerns wurden wegen der Versteigerung gefälschter Uhren verklagt.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,137598,00.html

Manager Magazin (2001)Kontrolle gegen Copyright-Piraten.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,120296,00.html

Manager Magazin (2001)Online Auktionen: Indizierte Versteigerungen.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,150318,00.html

[xxii]Wirtschaftswoche (2003)eBay: Neues Leben Powerseller.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13291/SH/0/depot/0/bt/2/index.html

[xxiii]Manager Magazin (2003)eBay & Co: Steuersünder sollen bluten.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,254580,00.html

[xxiv]Wirtschaftswoche (2003)Vom Flohmarkt zur Profi-Plattform: Das System eBay.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13071/SH/0/depot/0/bt/2/index.html

[xxv]Wirtschaftswoche (2003)Vom Flohmarkt zur Profi-Plattform: Das System eBay.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13071/SH/0/depot/0/bt/2/index.html

[xxvi]Yahoo (2003)WestLB sieht weiterhin Risiken für Erholung der Weltwirtschaft.
Posted on the Internet:
http://de.biz.yahoo.com/030724/11/3jzcf.html

[xxvii]Capital (2002)Abgabenlast - wie viel geht noch?
Posted on the Internet:
http://www.ebizz.de/heft/art/179651.html

[xxviii]Die Welt (2002)Euro führt zu Wucherpreisen.
Posted on the Internet:
http://www.welt.de/daten/2002/05/12/0512de331563.htx

WuV (2001)Keyword-Advertising: Der Euro kommt.
Posted on the Internet:
http://www.wuv.de/news/archiv/4/a30816/index.html

[xxix]Financial Times Deutschland (2003)Deutsche achten weniger auf Marken.
Posted on the Internet:
http://www.ftd.de/cgi-bin/gx.cgi/AppLogic+FTContentServer?pagename=SearchPage&PROCESS_SEARCH=true&ShowResult=true&newoffset=10

WuV (2001)Deutsche suchen im Netz nach Schnäppchen.
Posted on the Internet:
http://www.wuv.de/news/archiv/3/a28808/index.html

[xxx]Manager Magazin (2001)eBay: Auktionshaus profitiert von schwacher Konjunktur.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,145946,00.html

[xxxi]Financial Times Deutschland (2002)Strategie-Interview: Amazon, Yahoo, eBay setzen Zeichen

Posted on the Internet:
http://ftd.de/bm/ga/14174191.html?nv=rs

[xxxii]Die Welt (2003)IWF sagt Wachstumsdelle voraus.
Posted on the Internet:
http://www.welt.de/daten/1999/04/21/0421wi65006.htx?search=entwicklung+internationale+handel&searchHILI=1

[xxxiii]Atfacts.de (2003)@facts: Studie zur Internetnutzung.
Posted on the Internet:
http://www.atfacts.de/001/pdf_studies/atfacts_extra_eCommerce_200203.pdf

Golem (2003)Internetnutzung: Nach Boom nun langsamerer Anstieg erwartet.
Posted on the Internet:
http://www.golem.de/0307/26604.html

[xxxiv]Firstsurf.com (2003) Chaotische Preiskämpfe:Virtuelle Preisagenten und die Folgen für Onlineshops und Verbraucher.
Posted on the Internet:
http://www.firstsurf.com/t_luepke01.htm

[xxxv]NRW Medien (2002)Marktzahlen: Breitband für alle?
Posted on the Internet:
http://www.media.nrw.de/magazin/archiv/0403/art03_marktzahlen.php

[xxxvi]Manager Magazin (2003)Software geklaut?
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,250662,00.html

Manager Magazin (2003)Teurer Schuldspruch droht.
Posted on the Internet: http://www.manager-magazin.de/ebusiness/artikel/0,2828,246006,00.html

Spiegel (2003)Rechtstreit Bildrechte gegen Amazon.
Posted on the Internet:
http://www.spiegel.de/netzwelt/netzkultur/0,1518,255336,00.html
CNN (2002)Patent dispute threatens eBay.

Posted on the Internet:

http://www.cnn.com/2002/LAW/09/29/ebay.patents/index.html

[xxxvii]Manager Magazin (2002)Amazon: Antiquarische Web-Welten.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,188131,00.html

[xxxviii]Alleauktionen.de (2003)Übersicht Deutsche Online-Auktionen.
Posted on the Internet:
http://www.alleauktionen.de/aa/home.php4?&c=10

Wirtschaftswoche (2003)Vom Flohmarkt zur Profi-Plattform: Das System eBay.
Posted on the Internet:
http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13071/SH/0/depot/0/bt/2/index.html

Manager Magazin (2001)Endlich Gewinne!
Posted on the Internet:
http://www.manager-magazin.de/magazin/artikel/0,2828,249618,00.html

[xxxix]Amazon (2003)Website and business model.
Posted on the Internet:
http://www.amazon.com

[xl]eBay (2003)Website and business model.
Posted on the Internet:
http://www.ebay.com

[xli]Manager Magazin (2002)Kommentar: Tante eBay ist tot.

Posted on the Internet:
http://www.manager-magazin.de/ebusiness/internetworld/0,2828,194256,00.html

Manager Magazin (2001)eBay: Duell der Web-Riesen: Online-Flaggschiffe auf Kollisionskurs. eBay und Amazon kämpfen um die Kundschaft.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,147022,00.html

[xlii]Atfacts.de (2003)@facts: Studie zur Internetnutzung.
Posted on the Internet:
http://www.atfacts.de/001/pdf_studies/atfacts_extra_eCommerce_200203.pdf

Golem (2003)Internetnutzung: Nach Boom nun langsamerer Anstieg erwartet.
Posted on the Internet:
http://www.golem.de/0307/26604.html

[xliii]DMMV (2003)Internet bleibt vom Rückgang der Werbeinvestitionen ausgenommen.

Posted on the Internet:
http://www.press1.de/ibot/db/1028189661685758327n30.html?s=0

GfK (2003)Prognose für den Werbemarkt 2003.

Posted on the Internet:

http://www.emar.de/emar/daten/studien/102002/607/1976.html

Heise.de (2003)Der US-Online-Werbemarkt wächst.
Posted on the Internet:
http://www.heise.de/newsticker/data/anw-31.07.03-001/

[xliv]eBay (2003)Annual Report 2002, p. 24.
Posted on the Internet:
http://www.shareholder.com/ebay/annual.cfm

[xlv]Golem.de (1999)Ricardo verdrängt eBay von T-Online.

Posted on the Internet:
http://www.golem.de/9911/5009.html

[xlvi]Suchfibel.de (2003)Das Beziehungsgeflecht der Suchmaschinen.
Posted on the Internet:
http://www.suchfibel.de/5technik/suchmaschinen_beziehungen.htm

[xlvii]Financial Times Deutschland (2003)Yahoo kauft Konkurrenten Overture.
Posted on the Internet:
http://www.ftd.de/tm/it/1058101409657.html?nv=sl

Troy W. (2003) A t the Top of the Heap, eBay Still Must Look Down.

Posted on the Internet:

http://www.thestreet.com/pf/stocks/troywolverton/10101844.html

[xlviii]Redherring.com (2003)Commerce One keeps dreaming of eBay.
Posted on the Internet:
http://www.redherring.com/insider/1999/0914/inv-commerceone.html

[xlix]Troy W. (2003) A t the Top of the Heap, eBay Still Must Look Down.

Posted on the Internet:
http://www.thestreet.com/pf/stocks/troywolverton/10101844.html

[l]Electronic Commerce Info Net (2003)Von der Online-Strategie zum Multichannel-Mix.

Posted on the Internet:

http://www.ecin.de/state-of-the-art/multichannelmix

[li]Manager Magazin (2000)Pfandverleiher: Möchten gern per Web versteigern.
Posted on the Internet:
http://www.manager-magazin.de/geld/artikel/0,2828,95380,00.html

[lii]Wirtschaftswoche (2003)Vom Flohmarkt zur Profi-Plattform: Das System eBay.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13071/SH/0/depot/0/bt/2/index.html

[liii]eBay (2003)Annual Report 2002.
Posted on the Internet:
http://www.shareholder.com/ebay/annual.cfm

Fool.com (2003)Sitting on the Dock of eBay.
Posted on the Internet:
http://www.fool.com/duelingfools/2001/duelingfools01013101.htm

[liv]ABCNews (2002)Could Lawsuit Change eBay Forever?

Posted on the Internet:
http://abcnews.go.com/sections/business/TechTV/techtv_ebay020925.html

ABCNews (2002)New Twist on Auction Fraud.
Posted on the Internet:
http://abcnews.go.com/sections/business/TechTV/techtv_auctionfraud_021029.html

CNN (2002)eBay identity theft hits close to home.
Posted on the Internet: http://www.cnn.com/2002/TECH/internet/02/18/ebay.identity.theft.idg/index.html

CNN (2002)eBay warns users of Net scam.
Posted on the Internet:
http://www.cnn.com/2002/TECH/internet/12/11/ebay.scam/index.html

Manager Magazin (2002)Amerikaner prellt Auktionskunden um 225.000 Dollar.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,183918,00.html

Manager Magazin (2002)Kriminelle haben eBay-Nutzer um etwa 100.000 € erleichtert.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,214432,00.html
Manager Magazin (2001)Wie Sie sehen, sehen Sie nichts.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,150318,00.html

Spiegel.de (2003)Die Abzocke der falschen Treuhänder.
Posted on the Internet:
http://www.spiegel.de/netzwelt/politik/0,1518,258310,00.html

Wirtschaftswoche (2003)Internetauktionen eBay: Latte etwas höher gelegt.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13299/SH/0/depot/0/bt/2/index.html

Wirtschaftswoche (2003)Kanzlerkonto: eBay-Sicherheitslücken.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13300/SH/0/depot/0/bt/2/index.html

Wirtschaftswoche (2003 ) Vom Flohmarkt zur Profi-Plattform: Das System eBay.
Posted on the Internet:
http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13071/SH/0/depot/0/bt/2/index.html

[lv]Atfacts.de (2003)@facts: Studie zur Internetnutzung.
Posted on the Internet:
http://www.atfacts.de/001/pdf_studies/atfacts_extra_eCommerce_200203.pdf

Golem (2003)Internetnutzung: Nach Boom nun langsamerer Anstieg erwartet.
Posted on the Internet:
http://www.golem.de/0307/26604.html

[lvi]Absatzwirtschaft (2001)Geschäftsmodelle im E-Business.
Posted on the Internet:
http://www.absatzwirtschaft.de/pdf/MCM-Studie_II.pdf

Connect (2003)Kaum Vertrauen zu Online-Shops.
Posted on the Internet:
http://www.connect.de/d/25988

[lvii]Bayrischer Rundfunk (2003)Gebrauchtware: Second-Hand-Handel als Alternative.
Posted on the Internet:
http://www.br-online.de/wissen-bildung/internetcouch/themen/schnaeppchenjagd/3.html

[lviii]Manager Magazin (2003)Software geklaut?
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,250662,00.html
Manager Magazin (2003)Teurer Schuldspruch droht.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,246006,00.html
Spiegel.de (2003)Rechtsstreit Bildrechte gegen Amazon.
Posted on the Internet:
http://www.spiegel.de/netzwelt/netzkultur/0,1518,255336,00.html
CNN (2002)Patent dispute threatens eBay.

Posted on the Internet:

http://www.cnn.com/2002/LAW/09/29/ebay.patents/index.html

[lix]Manager Magazin (2002)eBay: Verstärkung für den Versteigerer
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,216746,00.html

[lx]CNNmoney.com (2003) The next Internet bubble.
Posted on the Internet:
http://money.cnn.com/2003/06/10/technology/bubble

ZDNet.de (2002)Der Aufstieg und Fall der New Economy.
Posted on the Internet:
http://news.zdnet.de/story/0,,t101-s2109226,00.html

Manager Magazin (2001)Endlich Gewinne!
Posted on the Internet:
http://www.manager-magazin.de/magazin/artikel/0,2828,249618,00.html

[lxi]Drugstore (2003)Corporate Information.
Posted on the Internet:
http://www.shareholder.com/drugstore/index.cfm

[lxii]Drugstore.com (2003)Annual Report 2002.
Posted on the Internet:
http://www.shareholder.com/drugstore/Edgar.cfm

[lxiii]Yahoo (2003)Financial Information about Drugstore.com.
Posted on the Internet:
http://biz.yahoo.com/p/d/dscm.html

[lxiv]Hubcap Consulting (2003)Frees You From Reliance on a Monopoly.
Posted on the Internet:
http://hubcapconsulting.com

[lxv]Yahoo (2003)Financial Information about Yahoo.
Posted on the Internet:
http://biz.yahoo.com/p/y/yhoo.html

[lxvi]Yahoo (2003)Annual Report 2002.
Posted on the Internet:
http://yhoo.client.shareholder.com/annual.cfm

[lxvii]Yahoo (2003)Financial Information about Amazon.
Posted on the Internet:
http://biz.yahoo.com/p/a/amzn.html

[lxviii]Amazon (2003)Annual Report 2002.
Posted on the Internet:
http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-annualreports

[lxix]Yahoo (2003)Financial Information about eBay.
Posted on the Internet:
http://biz.yahoo.com/p/e/ebay.html

[lxx]eBay (2003)Annual Report 2002.
Posted on the Internet:
http://www.shareholder.com/ebay/annual.cfm

[lxxi]Manager Magazin (2002)Online-Händler: Glückliche Käufer.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,241713,00.html

[lxxii]Wirtschaftswoche (2003)Vom Flohmarkt zur Profi-Plattform: Das System eBay.
Posted on the Internet:
http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13071/SH/0/depot/0/bt/2/index.html

Manager Magazin (2001)Endlich Gewinne!
Posted on the Internet:
http://www.manager-magazin.de/magazin/artikel/0,2828,249618,00.html

[lxxiii]Wirtschaftswoche (2003)Vom Flohmarkt zur Profi-Plattform: Das System eBay.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13071/SH/0/depot/0/bt/2/index.html

[lxxiv]ABCNews (2002)Could Lawsuit Change eBay Forever?

Posted on the Internet:
http://abcnews.go.com/sections/business/TechTV/techtv_ebay020925.html

ABCNews (2002)New Twist on Auction Fraud.
Posted on the Internet:
http://abcnews.go.com/sections/business/TechTV/techtv_auctionfraud_021029.html

CNN (2002)eBay identity theft hits close to home.
Posted on the Internet: http://www.cnn.com/2002/TECH/internet/02/18/ebay.identity.theft.idg/index.html

CNN (2002)eBay warns users of Net scam.
Posted on the Internet:
http://www.cnn.com/2002/TECH/internet/12/11/ebay.scam/index.html

Manager Magazin (2002)Amerikaner prellt Auktionskunden um 225.000 Dollar.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,183918,00.html

Manager Magazin (2002)Kriminelle haben eBay-Nutzer um etwa 100.000 € erleichtert.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,214432,00.html
Manager Magazin (2001)Wie Sie sehen, sehen Sie nichts.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,150318,00.html

Spiegel.de (2003)Die Abzocke der falschen Treuhänder.
Posted on the Internet:
http://www.spiegel.de/netzwelt/politik/0,1518,258310,00.html

Wirtschaftswoche (2003)Internetauktionen eBay: Latte etwas höher gelegt.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13299/SH/0/depot/0/bt/2/index.html

Wirtschaftswoche (2003)Kanzlerkonto: eBay-Sicherheitslücken.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13300/SH/0/depot/0/bt/2/index.html

Wirtschaftswoche (2003 ) Vom Flohmarkt zur Profi-Plattform: Das System eBay.
Posted on the Internet:
http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13071/SH/0/depot/0/bt/2/index.html

[lxxv] Own experience by trading on eBay since about 3 years.

[lxxvi]Atfacts.de (2003)@facts: Studie zur Internetnutzung.
Posted on the Internet:
http://www.atfacts.de/001/pdf_studies/atfacts_extra_eCommerce_200203.pdf

Golem (2003)Internetnutzung: Nach Boom nun langsamerer Anstieg erwartet.
Posted on the Internet:
http://www.golem.de/0307/26604.html

[lxxvii]Golem (2003)Internethandel wächst langsamer als angenommen: Deutschland beim E-Commerce Vorreiter in Europa.
Posted on the Internet:
http://www.golem.de/0303/24604.html

Golem (2003)Studie: Deutlich mehr Einkäufe per Mausklick.
Posted on the Internet:
http://www.golem.de/0301/23641.html

Golem (2003)Studie: DSL-Zugang fördert E-Commerce-Lust.
Posted on the Internet:
http://www.golem.de/0307/26628.html

[lxxviii]Heise.de (2001)M-Commerce verleiht dem Internet Flügel – vielleicht.
Posted on the Internet:
http://www.heise.de/newsticker/data/jk-05.03.01-000
Press1.de (2001)Expertenumfrage sieht Boom bei M-Commerce-Lösungen
Posted on the Internet:
http://www.press1.de/ibot/db/960226350854533091n25.html?s=0

Atfacts.de (2003)@facts: Studie zur Internetnutzung.
Posted on the Internet:
http://www.atfacts.de/001/pdf_studies/atfacts_extra_eCommerce_200203.pdf

Golem (2003)Internetnutzung: Nach Boom nun langsamerer Anstieg erwartet.
Posted on the Internet:
http://www.golem.de/0307/26604.html

[lxxix]Aktivhandel.net (2003)Yahoo: Amazon, eBay, Yahoo: Die Internet-Profis räumen ab.
Posted on the Internet:
http://aktivhandel.net/altona-web/html/rs/archiv/21666.htm

FAZ (2003)Interview: Internetunternehmen müssen nachhaltige Gewinne erwirtschaften.
Posted on the Internet: http://www.faz.net/s/Rub76BA6348017C42E2AED144FD3C852D2F/Doc~EDA939C306332499D9506922647853FF3~ATpl~Ecommon~Scontent.html

Wirtschaftwoche (2003)Vom Flohmarkt zur Profi-Plattform: Das System eBay.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13071/SH/0/depot/0/bt/2/index.html

[lxxx]Aktivhandel.net (2003) Yahoo: Amazon, eBay, Yahoo: Die Internet-Profis räumen ab.
Posted on the Internet:
http://aktivhandel.net/altona-web/html/rs/archiv/21666.htm

eBay (2003)Annual Report 2002.
Posted on the Internet: http://www.shareholder.com/ebay/annual.cfm

eBay (2002)Annual Report 2001.
Posted on the Internet: http://www.shareholder.com/ebay/annual.cfm

eBay (2001)Annual Report 2000.
Posted on the Internet: http://www.shareholder.com/ebay/annual.cfm

eBay (2000)Annual Report 1999.
Posted on the Internet: http://www.shareholder.com/ebay/annual.cfm
eBay (1999)Annual Report 1998.
Posted on the Internet: http://www.shareholder.com/ebay/annual.cfm

[lxxxi]Manager Magazin (2003)Internet Auktionshaus: Aus eBay wird ePay.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,251631,00.html

Manager Magazin (2001)eBay: Euro-Profiteure: Vom Monopolisten zum Ausbeuter?

Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,168604,00.html

[lxxxii]News.com (2001)eBay bans links to other sites.
Posted on the Internet:
http://news.com.com/2100-1017-257530.html?legacy=cnet

[lxxxiii]CNN (2001)eBay shares lessons learned from designing site.
Posted on the Internet: http://www.cnn.com/2001/TECH/industry/06/07/ebay.lessons.learned.idg/index.html

[lxxxiv]Manager Magazin (2003)Software geklaut?
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,250662,00.html

Manager Magazin (2003)Teurer Schuldspruch droht.
Posted on the Internet: http://www.manager-magazin.de/ebusiness/artikel/0,2828,246006,00.html

Spiegel (2003)Rechtstreit Bildrechte gegen Amazon.
Posted on the Internet:
http://www.spiegel.de/netzwelt/netzkultur/0,1518,255336,00.html
CNN (2002)Patent dispute threatens eBay.

Posted on the Internet:

http://www.cnn.com/2002/LAW/09/29/ebay.patents/index.html

[lxxxv]CNN (2002)eBay suffers three outages in three days.
Posted on the Internet:
http://www.cnn.com/2002/TECH/internet/04/11/ebay.outages.idg/index.html

CNN (2001)eBay auction site experiences problems.
Posted on the Internet:
http://www.cnn.com/2001/TECH/03/25/ebay.down/index.html

Manager Magazin (1999)Computerfehler drückt Aktienkurs.
Posted on the Internet:
http://www.manager-magazin.de/geld/artikel/0,2828,27239,00.html

Manager Magazin (1999)Teurer Blackout.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,34362,00.html

[lxxxvi]Manager Magazin (2001)Endlich Gewinne!
Posted on the Internet:
http://www.manager-magazin.de/magazin/artikel/0,2828,249618-4,00.html

[lxxxvii]Manager Magazin (2003)Internet Auktionshaus: Aus eBay wird ePay.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,251631,00.html

Manager Magazin (2001)eBay: Euro-Profiteure: Vom Monopolisten zum Ausbeuter?

Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,168604,00.html

[lxxxviii] Impression got at a presentation of the management eBay Germany at the FHW in Mai, 2003. Audience was asked about their impressions on eBay’s online marketing measures.

WuV (2003) Studie: eBay war der größte Online-Werbekunde 2002.
Posted on the Internet:
http://www.wuv.de/news/artikel/2003/01/05971/index.html

DoubleClick (2003)European Consumer Email Study.
Posted on the Internet:
http://www.emar.de/emar/daten/studien/012003/629/index.html

Stock, W.G. (2003)Popups werden als störend empfunden, p. 120.
Posted on the Internet:
http://www.phil-fak.uni-duesseldorf.de/infowiss/content/vorlesungen/informationsoekonomie.pdf

[lxxxix]Aktivhandel.net (2003)Yahoo: Amazon, eBay, Yahoo: Die Internet-Profis räumen ab.
Posted on the Internet:
http://aktivhandel.net/altona-web/html/rs/archiv/21666.htm

Manager Magazin (2001)Endlich Gewinne!
Posted on the Internet:
http://www.manager-magazin.de/magazin/artikel/0,2828,249618,00.html

[xc]CNN (2001)eBay shares lessons learned from designing site.
Posted on the Internet:
http://www.cnn.com/2001/TECH/industry/06/07/ebay.lessons.learned.idg/index.html

[xci]Atfacts.de (2003)@facts: Studie zur Internetnutzung.
Posted on the Internet:
http://www.atfacts.de/001/pdf_studies/atfacts_extra_eCommerce_200203.pdf

Golem (2003)Internetnutzung: Nach Boom nun langsamerer Anstieg erwartet.
Posted on the Internet:
http://www.golem.de/0307/26604.html

[xcii]Aktivhandel.net (2003)Yahoo: Amazon, eBay, Yahoo: Die Internet-Profis räumen ab.
Posted on the Internet:
http://aktivhandel.net/altona-web/html/rs/archiv/21666.htm

FAZ (2003)Interview: Internetunternehmen müssen nachhaltige Gewinne erwirtschaften.
Posted on the Internet: http://www.faz.net/s/Rub76BA6348017C42E2AED144FD3C852D2F/Doc~EDA939C306332499D9506922647853FF3~ATpl~Ecommon~Scontent.html

Wirtschaftwoche (2003)Vom Flohmarkt zur Profi-Plattform: Das System eBay.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13071/SH/0/depot/0/bt/2/index.html

[xciii]FAZ (2003)Interview: Internetunternehmen müssen nachhaltige Gewinne erwirtschaften.
Posted on the Internet: http://www.faz.net/s/Rub76BA6348017C42E2AED144FD3C852D2F/Doc~EDA939C306332499D9506922647853FF3~ATpl~Ecommon~Scontent.html

[xciv]CNN (2002)eBay patches password-security problem.
Posted on the Internet:
http://www.cnn.com/2002/TECH/internet/04/04/ebay.password.idg/index.html

Manager Magazin (2002)Hacker-Angriff: Eine lange geplante Verschwörung?
Posted on the Internet:
http://www.manager-magazin.de/geld/artikel/0,2828,64248,00.html

[xcv]ABCNews (2002)New Twist on Auction Fraud.
Posted on the Internet:
http://abcnews.go.com/sections/business/TechTV/techtv_auctionfraud_021029.html

CNN (2002)eBay warns users of Net scam.
Posted on the Internet:
http://www.cnn.com/2002/TECH/internet/12/11/ebay.scam/index.html

Manager Magazin (2002)Amerikaner prellt Auktionskunden um 225.000 Dollar.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,183918,00.html

Manager Magazin (2002)Kriminelle haben eBay-Nutzer um etwa 100.000 € erleichtert.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,214432,00.html
Manager Magazin (2001)Wie Sie sehen, sehen Sie nichts.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,150318,00.html

Spiegel.de (2003)Die Abzocke der falschen Treuhänder.
Posted on the Internet:
http://www.spiegel.de/netzwelt/politik/0,1518,258310,00.html

Wirtschaftswoche (2003)Internetauktionen eBay: Latte etwas höher gelegt.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13299/SH/0/depot/0/bt/2/index.html

Wirtschaftswoche (2003)Kanzlerkonto: eBay-Sicherheitslücken.
Posted on the Internet: http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13300/SH/0/depot/0/bt/2/index.html

Wirtschaftswoche (2003 ) Vom Flohmarkt zur Profi-Plattform: Das System eBay.
Posted on the Internet:
http://www.wiwo.de/pswiwo/fn/ww2/sfn/buildww/cn/cn_artikel/id/156/id/13071/SH/0/depot/0/bt/2/index.html

[xcvi]Manager Magazin (2003)Software geklaut?
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,250662,00.html

Manager Magazin (2003)Teurer Schuldspruch droht.
Posted on the Internet: http://www.manager-magazin.de/ebusiness/artikel/0,2828,246006,00.html

Spiegel (2003)Rechtstreit Bildrechte gegen Amazon.
Posted on the Internet:
http://www.spiegel.de/netzwelt/netzkultur/0,1518,255336,00.html
CNN (2002)Patent dispute threatens eBay.

Posted on the Internet:

http://www.cnn.com/2002/LAW/09/29/ebay.patents/index.html

[xcvii]ABCNews (2002)eBay bans Nazi, hate Material.
Posted on the Internet: http://more.abcnews.go.com/sections/scitech/DailyNews/ebay_hate010504.html

Manager Magazin (2002)Auktionshaus hat die User nicht im Griff.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,177126,00.html

Manager Magazin (2002)Skandal oder Seifenblase?
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,199331,00.html

Manager Magazin (2001)Klage wegen Marken-Piraterie: Die Europa-Töchter des US-Konzerns wurden wegen der Versteigerung gefälschter Uhren verklagt.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,137598,00.html

Manager Magazin (2001)Kontrolle gegen Copyright-Piraten.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,120296,00.html

Manager Magazin (2001)Online Auktionen: Indizierte Versteigerungen.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,150318,00.html

[xcviii]CNN (2002)eBay suffers three outages in three days.
Posted on the Internet:
http://www.cnn.com/2002/TECH/internet/04/11/ebay.outages.idg/index.html

CNN (2001)eBay auction site experiences problems.
Posted on the Internet:
http://www.cnn.com/2001/TECH/03/25/ebay.down/index.html

Manager Magazin (1999)Computerfehler drückt Aktienkurs.
Posted on the Internet:
http://www.manager-magazin.de/geld/artikel/0,2828,27239,00.html

Manager Magazin (1999)Teurer Blackout.
Posted on the Internet:
http://www.manager-magazin.de/ebusiness/artikel/0,2828,34362,00.html

In a world where trade is increasingly becoming digitalized online, there are new and challenging strategies emerging. This essay aims to analyze and determine these strategies. Considering the example of eBay and Amazon, their business models and their multi-sided platforms, we can compare them to decide which strategies work in this market and how, in the future, they can keep a competitive edge as the market continuously changes. However, as Amazon and eBay have eventually crossed paths in an attempt to expand in the ecommerce market, the question persists whether the market is big enough for both. This essay will look at how eBay and Amazon have evolved their business structure and how changes in the market have caused both firms to reconsider their core strategies and growth strategies.

EBay Vs. Amazon: The Market

EBay and Amazon both operate in the used goods and collectibles market however, they operate in completely different ways. EBay and Amazon currently operate in an oligopolistic market, meaning that the e-commerce market shows some, if not all of the characteristics of an oligopoly market. In 1995 Pierre Omidyar stated the aim of eBay was to ‘give the market power back to the consumers, rather than large corporations.’ (R.Salehnejad, 2012) This caused eBay’s decentralized approach to emerge. The high barriers to entry and exit, large sunk costs and a few large dominant firms operating the market, has made it challenging for any potential competition. Therefore, this has meant that eBay and Amazon do in fact hold large market power as consumers have little in the way of substitutes that can compare to the large consumer base that they offer.

Multi-Sided Platform Competition

Andrei Hagiu (2009) explains that multi-sided platforms bring together two or more independent groups of customers, especially in the ecommerce market. At a basic level the purpose of a multi-sided platform is to reduce search costs of the buyer and the seller. In short, a multi-sided platform ‘provides a support that facilitates interactions among the two or more constituents that it serves, such that members of one side are more likely to get on board the multi-sided platform when more members of another side do so.’ (Andrei Hagiu, 2009). Multi-sided platforms minimize transaction costs between the two groups, buyer and seller, and in general benefits both parties.

Rochet and Tirol (2004) describe multi-sided platforms as ‘enabling interactions between different groups of customers and try to get the multiple sides on board.’ In the case of EBay an Amazon, their ability to create a strong brand and hold over the market can be attributed to their large multi-sided platform. The sheer amount of buyers and sellers has allowed the firms to thrive in a market in which other firms have attempted to offer similar products at a much lower cost. For example, in 1998 a free auctioning service was enlisted into Yahoo! and despite no cost to consumers, they still used the well-known, large multi-platforms of eBay and Amazon rather than a much cheaper alternative. (D.L.Reiley, 2009)

EBay: History & Business Model Evolution

Lee (1993) suggests consumerism is moving towards the leisure industry, thus the ease and novelty of sites such as eBay have proven popular. When eBay was first founded it consisted of an online market place for the sale of goods and services. However, by 2011 eBay offered three primary business sectors; market places, payments and communications. Originally eBay derived its revenue through only one area of its multi-sided platform: the sellers. This was done through listing fees and commission fees. Now, eBay has expanded into over 50,000 different product areas from its original area of expertise selling collectibles and used goods. Furthermore by 2011 eBay has an online presence venturing into 24 countries, which has allowed for cross-border trading to become another key element to eBay’s revenue stream.

EBay was founded on a unique selling point of using auctions to set fair and true value market prices. EBay’s business strategy originally used a two-sided platform, founder, Pierre Omidyar (1995), developed the firm out of, what he saw as a, ‘need’ or ‘niche’ in the market that needed accommodating. This niche was to develop lower search costs and find a way to determine a fair price in the industry. (I.e. a working price mechanism) Due to high search costs the ‘used goods and collectables’ market had suffered a stifled growth. Whereas the lack of a price mechanism in the market meant products were sold primarily through bilateral negotiation, through buyer and seller.

This was an issue as it didn’t reveal the true prices in the market as little or no competition prevented competitive pricing strategies from emerging. However, the emergence of eBay’s auctions feature transformed Bi-Lateral trades into Multi-Lateral trades, facilitating efficient price discoveries. (R.Salehnejad, 2012, Note 3) In 2003 eBay introduced fixed prices using the ‘buy it now’ function in which eBay still benefited from a listing and commission fee. This effectively ensured that the merchant always got the price they wanted for a good, not necessarily the market price it deserved. Furthermore, in 2001 eBay introduced ‘eBay Stores’ allowing firms to offer its products at fixed prices through the eBay site, such as the Home Depot in the USA.

Here it is clear that eBay was moving into Amazon’s territory as an online retailer and merchant platform. Although eBay now offers this feature, its business model was founded on the idea of multi-lateral trade between two platforms of buyer and seller. This has enabled eBay to achieve high revenues and over 3.8 million registered users (Hof and Himelstein). However, due to increasing competition from firms such as Amazon, eBay’s business model has been forced to adapt and expand into areas such as fixed pricing and online storefronts. Will eBay remain a predominantly auction based web page or will it continue to commercialize and transform its strategy into that of its rival’s such as Amazon?

Amazon: History and Business Model Evolution

Unlike eBay, Amazon first tackled the market by using a one-sided platform strategy for its online bookstore. Amazon developed a merchant platform that focused on the seller as its only customers, unlike eBay who considered both seller and buyer. However, as Amazon grew it began to consider another platform, the buyer. Amazon quickly developed a platform envelopment strategy (R.Salehnejad, 2012, Note 4) as it had such a large buyer and seller base. This was a strategic way to ease itself into a multi-sided platform between 2000-2001. Amazon’s CEO, Jeff Bezos in 2001, indicated that this strategy was developed after expanding into zShops, he stated that ‘one of the things learnt through zShops was that we needed to think of ourselves serving two distinct sets of consumers.’ (R.Salehnejad, 2012, Note 4) Thus Amazon began its transition to a multi-sided platform.

Amazon’s founder Bezos has argued that the perfect business strategy is one that focuses on growth rather than profit. (S.Khrishanmurthy, 2004) Amazon did not gain any profit until its 4th quarter of 2001 but grew significantly large as a firm in that time. One way in which it grew was through expanding into markets such as CD’s by convincing customers who already bought books through Amazon to buy other products. This helped the firm to benefit from economies of scope as it already had the available infrastructure and supply chain to facilitate such expenditure.

The difference between web-based platforms to those used for normal goods and services is that they benefit from network externalities. Network externalities were defined by S.J.Lebowitz as: ‘a change in the benefit, or surplus that an agent derives from a good when another number of agents consuming the same kind of good changes. (S.J.Lebowitz, S.E.Margolis). It could be suggested that in the battle between eBay and Amazon to prevail in the online market the key strategy should be to ‘grow big, fast.’ (R.Salehnejad, 2012, Note 5) In order to exploit these network externalities and strengthen both sides of its multi-sided platform, Amazon has had to expand quickly into other areas such as zShops and its Fulfillment service.

Considering the pricing strategy for Amazon, it is clear that they focus on a cost-leadership strategy. As previously stated, Amazon aims to ‘grow big, fast’ in order to achieve economies of scale. This allows the firm to have a lower average cost, as economies of scale reduce the cost per unit of a good. Therefore Amazon has used the low cost to create low prices by having much slimmer profit margins than they otherwise could. This could be one reason in explaining their vast market share and competitiveness in the market. For example, when Amazon announced the Kindle in 2007, it sold for a much lower price than any other tablet in the market, at just £69.

Amazon did this in order to gain market share so as many people as possible could own a kindle in order for Amazon to become the main seller of content, the books. (Gans, 2012) However, its rival’s, Apple, had no interest in their content market, Apps and Widgets, and were purely concerned with selling the tablet. Therefore, it retailed at a much more expensive £959.

Here amazon is clearly ‘pursuing a retail model’ (Gans, 2012) which does differ from its web-based store strategy and again However, Amazon began to offer auctions in 1999, much like those of eBay, and therefore diversified its strategy by holding a price discovery mechanism rather than its usual cost-leadership approach. It could be argued that the increasing competition in the web market has lead to this mechanism becoming less effective as big firms such as eBay and Amazon can now manipulate costs, such as listing and commission fees, in order to compete with each other, thus possibly reducing the effectiveness of the model.

Looking Ahead: Strategy Lessons

Since they were founded in 1994 and 1995, both Amazon and eBay have altered significantly and although they have always operated in the same market, they have very different visions on strategy. EBay has predominantly used a decentralized approach in its business plan, allowing the buyers and sellers to take control of the market. However, eBay’s approach is becoming increasingly centralized through events such as the acquisition of PayPal. This shows eBay are becoming progressively involved in the trade process between buyer and seller.

EBay has always used its comparative edge of having no fixed costs in terms of warehouses and supply networks, unlike Amazon who uses this as their core advantage, to become widely available around the world at the click of a button. This ease allows eBay to exploit as many different markets as it possibly can which has seen them develop as a firm, for example, through offering online store fronts firms can sell through eBay at a fixed price to anywhere in the world, while at the same time eBay still maintains its ‘peer to peer’ strategy.

Whereas, Amazon uses it’s expanse of infrastructure and supply chain to its advantage with programs such as Fulfillment offering clients the availability of Amazon’s delivery and warehouse facilities, for a fee. This allows Amazon to develop a multiple revenue stream and this has been proven to work with the recent acquisition of Love Film.

Learn also which statement correctly compares the two businesses?

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