Case study: Can E-Bay Continue Growing?

Question 1.
eBay.com is an online auction service that does not sell anything of its own. It brings buyers and sellers together to the online marketplace where sellers list items they are willing to sell, and buyers bid for the items they are willing to buy. eBay currently has operations in 32 countries, and it continues expanding. The company's strategy has been very successful. The earnings come from several different sources: first, sellers have to pay a fee of $.25 to $4.80 for listing their items on eBay. Secondly, eBay charges a fee for a sold item that starts at 5.25% of the selling price. eBay also collects revenue from direct advertising as well as from various service providers, such as PayPal.
eBay's growth strategy is focused on geographical expansion as well as introduction of new products and services. For example, eBay has been very successful in some European countries, such as France, England and Germany. eBay has also been able to launch eBay Motors, "Buy It Now" application and eBay Stores, all of which have been very successful.

Question 2.
One of the problems that eBay has encountered is maintaining its growth. While the company's growth is still outstanding internationally, it has been slowing down domestically. eBay also has some problems on the Asian market where Yahoo is trying to set up competing auction sites. On the other hand, laws differ greatly in different countries, and it may be challenging for eBay to monitor its compliance in so many different countries where it does business. For example, it may be difficult for eBay to make sure that prohibited items are not sold on its web-site, and the company may be liable if it fails to prevent illegal transactions. Another problem that eBay has faced is an increasing number of buyers who have been defrauded by sellers. And finally, eBay is having some problems with customer service. eBay has two types of customers, buyers and sellers, and what works for buyers does not necessarily works for sellers.

Question 3.
To solve the problem of slowing growth, eBay acquired Shopping.com which is an online shopping comparison site, as well as Skype. By purchasing Skype eBay hopes to get into high end markets, such as real estate and travel where buyers are more likely to need more information from sellers. However, I'm not sure if this was a sound decision because some analysts claim that a lot of sellers are not willing to add Skype to their business models because they hardly keep up with e-mails on eBay.
To handle competition, eBay entered into agreements with other players, such as Yahoo and Google by giving them exclusive rights to provide advertisements for eBay's sites domestically and internationally. In my opinion, this is a good idea to collaborate with the competitors although these companies still remain rivals.
In regards to increasing fraud, some users claim that eBay has not adequately addressed the issue. The company needs to provide a safe trade environment. However, when eBay gets complains about fraud, buyers often get an automated e-mail that encourages buyers and sellers to resolve disputes on their own. I do not think it is a solution to the problem. eBay needs to be more hands-on when it comes to identity theft and fraud problems.