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A STORY OF A SUCCESSFUL ENTREPRENEUR

AND HIS ENTREPRISE

An effort by:

Lovely Rani (15)

Prithu Kant Jha (21)

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PIERRE OMIDYAR Omidyar born in Paris, on 21 June, 1967

In France to Iranian immigrant parent.

Grown up in Washington, D.C Graduated with a degree in computer

science from Tufts University, in 1988.

PIERRE OMIDYAR

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PIERRE OMIDYARworked for Claris, an Apple Computer subsidiary In 1991, co-founded Ink Development, a pen-based computing startup that

was later rebranded as an e-commerce company and renamed eShop. 156th richest person in the world with net worth of US$ 5.5 Billion.

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HOW IT ALL STARTED? The online auction website was founded as AuctionWeb in San Jose,

California, on September 3, 1995, by Pierre Omidyar as part of a largerpersonal site

eBay began as an act of love, invented by Pierre Omidyar as a way for hisfiancee, Pam (now his wife), to trade Pez dispensers with other collectors.

Chris Agarpao was hired as eBay's first employee and Jeffrey Skoll washired as the first president of the company in early 1996.

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ORIGIN OF EBAY.COM Originally, the site belonged to Echo Bay Technology Group, Omidyar's

consulting firm.

Omidyar tried to register the domain name echobay.com, but found italready taken by the Echo Bay Mines, a gold mining company,

So he shortened it to his second choice, eBay.com.

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THOUGHT Beyond the technology, Omidyar envisioned the site as a community,

based on five main values:

People are basically good. Everyone has something to contribute. An honest, open environment can bring out the best in people. Everyone deserves recognition and respect as a unique individual.

You should treat others the way you want to be treated.

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HISTORY Sept 3, 1995 incorporated in San Jose Skoll, Omidyars partner joined him as first president. 1997 Meg Whitman, joins as CEO. Sept. 1998 eBay first IPO. $18 per stock.

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COMPANY OVERVIEW An online auction platform that facilitates transaction between buyers and

sellers of goods and services.

With more than 534 million active users globally, eBay is the world'slargest online marketplace.

Total Workforce 15,500

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MISSION & VISION

eBays Vision is to provide a global online tradingplatform where practically anyone can trade

practically anything

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INDUSTRY INFORMATIONTotal value of global e-commerce transactions - $657 billionB2B auction transaction growth from 98 to 2OOO was $8

billion to $52 billion

Increased awareness among users towards the potential ofinternet as a trading platform

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BUSINESS MODEL Seller uploads the picture and description of the item to be sold. Sale ends at predetermined time. High bidder and seller contact each other and make arrangements of

shipment.

Buyer sends funds to seller {money order, check, PayPal}, seller sendsgoods.

Buyer and seller then grade each other through feedback forums.

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REVENUE MODEL AND PROFIT Fees for the seller to post the item, any promotion activities and final sale

commission.

Advertising revenue 2% of Total Revenue Selling profit is approx 9% of Total Revenue Major money comes from listing and trading services -89% of Total

Revenue

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VALUE PROPOSITION Buyer

Massive SelectionMore convenientSaves time and moneyValue added

SellerBroadens marketLower Distribution CostMaximize selling priceRepeat business and clientele

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SLOGANS Connecting buyers and sellers globally Come to think of it, eBay. What ever it is, you can get it on eBay. Shop victoriously! From collectibles to cars, buy and sell all kinds of items on eBay Buy it, sell it, love it

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THE GROWTH1997

the revenue hit $5.7m1998

Acquires Jump, Inc., the developer and operator of Up4Sale, an online tradingservice

Special strategic alliance with AOL. Revenue grows 724%

1999 acquires Kruse, Inc., a company that conducts auctionsAcquires Billpoint, Inc., a firm that develops centralized payment solutionseBay goes online in the United Kingdom and Canada.

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GROWTH CONT. 2000

acquires Half.com Inc.

2003 Transactions for the year near the $20 billion mark. Sales exceed $2 billion.

2004 International expansion in India-bazee.com and Germany.

2005 buys shopping.com and places a bid for skype.com

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FINANCIALS A presence in over 20 countries internationally contributes to 40% of total

revenue.

Main competitors, Yahoo! and Amazon have seen 65% and 61% revenuegrowth respectively over 6 year period from 98 to 03

eBays 98 revenue was 47.4 million; 03 jumped to $2.1 billion,134% average increase over previous year.

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EBAYS REVENUE

0

2

4

6

8

10

1998 2006 20072008

2009

ANNUAL REVENUE (IN BILLION USD)

ANNUAL REVENUE (IN

BILLION USD)

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ACQUISITION OF PAYPALPayPal uses existing electronic infrastructure of bank accounts and

credit cards to allow small monetary exchanges online.

Its convenient for small businesses and individuals, because they cancollect online payments without difficult set-up.

eBay acquired PayPal in 2002 and has integrated it throughout its websiteas a payment option for auctions.

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VELOCITY OF TRADINGProcesses a Pocket PC in UK very six minutes.Mobile phone every 3O seconds in Germany.A Volkswagen is sold every 25 minutes in Germany.

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THREATS OR ISSUES Bargaining power of suppliers. Substitutes product or services such as business-to-business, business-to-

customer service providers.

Increasing competition from Amazon and yahoo. No barrier to entry in the industry. Buyer-seller frauds Technology failure or/and change

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ISSUE OF PRIVACY AND TRUSTEBays view and approach

Trust is facilitated by fair information and principles Users should be provided with notice and communication, choice and

control, security, authentication and enforcement

eBay has earned this trust in time by consistent service.

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EBAYS FOLLOW UP Target key product categories for special users. Continue developing community tools. Enhance the community for women and senior citizens. Stress on adding services and features to make trading easier.

Expand value added services.

Major focus on trust and safety programs Maximum transparency.

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EBAY'S TACKLE OF SECURITY Feedback forum- check the business practices or reputation of any buyer or

seller on eBay.

Escrow- inspection of the product purchased before payment is being sent. Fraud protection program- coverage of users up to $2OO. Verified rights owner program- make sure that items do not violate

intellectual property rights.

Neutral dispute resolution options.

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SUBSIDIARIES SERVICES EBay professional services- serving fast growing marketplace by providing

a destination on eBay to find professionals.

Ebay local trading- allow users to browse items near them and browsethrough local interests.

Ebay premier- showcases fine art, antiques, fine wines and rarecollectibles from leading auctions and dealers.

Ebay live auctions- real time bidding on items being sold on sale floor.

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COMPETITION Online Competitors-

Amazon

Yahoo

Traditional stores Wal-Mart Macys Home Depot

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EBAY VS COMPETITION- FACTS eBay had great first mover advantage and brand name establishment in

the U.S.

In the International markets though, Yahoo moved in first and EBay issuffering from that still.( Japan and other south Asian markets)

Amazon and yahoo stole most of the market share during three ebaycrashes during 99.

EBay does have its supremacy in the U.S. with yahoo, Amazon and Googlefollowing leaders.

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WHY PEOPLE GO TO EBAY.COM? Network effects

Sellers want to sell their item on the auction service with the most buyers,so they put their items up for sale on eBay.

Buyers want to find the best prices with many sellers, so they go to eBay.

Economies of scale Cost allocation over broader range of transaction being processed.

Customer Retention Why would a customer would want to leave the biggest trading platform? Excellent opportunity to find similar interest sellers and buyers.

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