How ebay become a successful auction e-commerce? (Week3)

The founder of ebay was a computer programmer Pierre Omidyar, who is a Frenceh-born Iranian. The very first item sold on eBay was a broken laser pointer for $14.83. Astonished, Omidyar contacted the winning bidder to ask if he understood that the laser pointer was broken.

In his responding email, the buyer explained: "I'm a collector of broken laser pointers." Chris Agarpao was hired as eBay's first employee and Jeffrey Skoll was hired as the first president of the company in early 1996. In November 1996, eBay entered into its first third-party licensing deal, with a company called Electronic Travel Auction to use SmartMarket Technology to sell plane tickets and other travel products. The company officially changed the name of its service from AuctionWeb to eBay in September 1997.

Originally, the site belonged to Echo Bay Technology Group, Omidyar's consulting firm. Omidyar had tried to register the domain name echobay.com (the domain has recently been put up for sale) but found it already taken by the Echo Bay Mines, a gold mining company, so he shortened it to his second choice, eBay.com. EBay went public on September 21[6], 1998, and both Omidyar and Skoll became instant billionaires.The company purchased PayPal on October 14, 2002.

The domain ebay.com attracted at least 902 million visitors annually by 2008 according to a Compete.com study. This was thrice the numbers of walmart.com.

Beside ebay, Amazon.com is a very successful example of e-commerce business because of several reasons. Basically, there are three strategies that have helped Amazon.com to enhance its competitive advantage, including cost-leadership, customer differentiation and focus strategies.Amazon.com strives to be Earth's most customer-centric company where people can find and discover virtually anything they want to buy online. By giving customers more of what they want which include low prices, vast selection, and convenience, Amazon.com continues to grow and evolve as a world-class e-commerce platform.

History and evolution of E-commerce (Week 3)

E-commerce are the activities that consists of the buying and selling of products or services through an electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown since the spread of the Internet. With the use of E-commerce, lots of activities can be carried out easily and this has benefited us a lot. The activities can be carried out are such as electronic funds transfer, Internet marketing, online transaction processing, electronic data interchange (EDI), customer relationship management (CRM)and else,

E-commerce has been changed and evolves over the last 30 years. Originally, electronic commerce are created for the facilitation of commercial transactions to be done electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to send commercial document likes invoices and purchase order electronically. The rapid growth and use of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of electronic commerce. In the late 1990s,Jeff Bezos launched Amazon.com ,the first e book retailer has born. Other companies such as Dell and Cisco began to aggressively use Internet for their commercial transactions. Furthermore, eBay was founded by computer programmer Pierre Omidyar as AuctionWeb and now it is the famous auction website ever in the world.

Identify and compare the revenue model for Google, Amazon.com and eBay (Week3)

There are total of 5 revenue models that available on the net which consists of sales, transaction fees, subscription fees, affiliate fees and advertisement fees.


mainly involves in advertising fees. The Google website is adopting the pay per click advertising program. The Google is charging the advertiser once the user click on the advertisement which will link to the advertiser’s website. This revenue model helps Google to generate more and more income as the year passing by. Besides, Google is using affiliates fees model to generate income too. It provides a highlighted web address or images that link to another website.

For Amazon book and music selling online business, it mainly depends on the volumes of selling the books and music. For current time, Amazon is no longer a book and music selling company. It has expanded its business by diversifying it through toy, health and beauty, sports and outdoors and others selling products. However, it also takes the opportunity of using advertisement fees as a passive income for advertisers to promote their advertisement to earn extra income to the company itself.

The primary income for this company is through transaction costs. When people post their items on eBay, it charges the insertion fees for the auctioneer by giving a space for them to auction their items or products. If the products were sold, eBay will also charge the final fees for the product of being sold. In another term, it is similar to commission fees.

Why Webvan.com fails? (Week 3)

Webvan was an online "credit and delivery" grocery business that went bankrupt in 2001. The core business of the company was to delivered products to customers homes within a 30 minute window of the grocery products being choose by the customers. This web site provide the services in ten U.S. Market. San Francisco Bay Area, Dallas, San Diego, Los Angeles, Chicago, Seattle, Portland, Atlanta, Sacramento, and Orange County.

The main reason webvan falls bankruptcy was due to the investment made by the company on infrastucture was exceeded the sales growth. As a result,the company ran out of money.Webvan placed a $1 billion (USD) order with engineering company Bechtel to build its warehouses, bought a fleet of delivery trucks, purchased 30 Sun Microsystems Enterprise 4500 servers, dozens of Compaq ProLiant computers and several Cisco Systems model 7513 and 7507 routers, as well as more than 80 21-inch ViewSonic color monitors and at least 115 Herman Miller Aeron chairs (at over $800 each).

The bankruptcy of this e-commerce website resulted, all non-perishable food was donated to local food banks. The company's legacy consists of thousands of colored plastic shipping bins for groceries that are still sitting in customers' basements and closets, and a lucrative severance package for ex-CEO Shaheen.

Written and edit by: Chok Yik Siong