eBay, a successful marketplace

eBay is an electronic storefront which allows the process of buying, selling or exchanging products, services and information via computer networks. It has revolutionized consumer-to-consumer business. eBay was founded in 1995, connects hundreds of millions of people around the world every day. It empowering us to explore new opportunities and innovate together.

eBay provides the internet platforms of choice for global commerce, payments and communications. People seek fulfillment through it in their day-to-day activities. It continue to expand economic opportunity by fostering an emotionally satisfying experience for people around the world to explore, learn, shop share and talk with each other, we are also aspiring toward a more emotionally satisfying experience as human beings.

eBay’s original vision was to create the world’s first global economic democracy. We saw a “people market” in which anyone in the world could sell or buy just about anything for a fair price. And today on the eBay marketplace, trust, honesty and efficiency are rewarded more than size or status. More and more of our daily lives activities are conducted online. The internet continually enhances its ability to connect with the world around us.

eBay will continue to innovate and integrate the technologies and policies that make these day-to-day activities even more trusted, fair and efficient than they are today. Hundreds of millions of people who use eBay today are already experiencing this new way to connect. eBay will make it so easy and rewarding to engage in Social Commerce that believe hundreds of millions more will participate. And this next generation will bring with them new products, ideas and opportunities for everyone.

Discuss how e-commerce can reduce time cycle, improve employees’ empowerment and facilitate customer support.

In the business environment, traditionally there is a need for a tangible and permanent form of communication in a transaction between buyer and seller. However, in e-commerce there is the ability to communicate in an electronic form where a computer is able to recognize, reproduce and store means that business could now be conducted in a paperless environment. Electronic commerce is the process of trading across the Internet, that is, a buyer visits a seller's website and makes a transaction there.

E-commerce eliminates the traditional purchase approach, which is time-consuming and labor-intensive. Issuing purchase orders, obtaining multilevel approvals and tracing invoices can lead to high transaction costs. Internet procurement automates this process and helps companies increase the speed and reduce the cost of purchasing transactions. Orders will be placed electronically and the product will be produced and shipped out without the cost of middlemen. Perhaps most importantly, order status and inventory levels could be made available to both the seller and its customers. This should relieve the sales and customer-service departments of phone calls and e-mails to track orders and verify inventory levels. Cyber space can be an outstanding way to nurture the business revenue base.

Customers can reach a company on the Internet globally for 24 hours. It creates new markets and segments, allow customers to make wise purchasing decisions and increases business competitiveness. E-commerce would provide consumers with benefits such as interactive communications, fast delivery, and more customization that would only be available for consumers through online shopping. Product information in the Internet is more compact and it ranges from various sites. Users have more opportunity to choose and compare products they want to purchase or easily find and select specialized products.

Progressive leaders, such as those in many high-tech firms and Internet companies are less likely than traditional leaders to give specific instructions to employees. Rather, they’re more likely to empower employees to make decisions on their own. Empowerment means giving employees the authority (the right to make a decision without consulting the manager) and responsibility (the requirement to accept the consequences of one’s actions) to respond quickly to customer. The increasing use of computer to do routine tasks has shifted the kinds of skills needed for employees in the e-commerce industry. Employees are giving power to handle a variety of responsibilities, interact with customer and think creatively.

While the growth of the Internet is opening up new opportunities for e-commerce, however the limited understanding of e-commerce technology may leads to the cause of failure for the firms which start implementing doing their business online.

The History and Evolution of E-Commerce

What is Commerce?


Commerce is and the exchanging and buying of goods and services occurred before recorded history, now commerce is a basic activity of goods trading and buying in everyday life.

What is E-Commerce?

E-commerce (electronic commerce or EC) is the buying and selling of goods and services on the Internet, especially the World Wide Web. In practice, this term and a newer term, e-business, are often used interchangeably. For online retail selling, the term e-tailing is sometimes used.

How E-commerce gets started?

Entering into the electronic era, the way individuals and organizations do business and undertake commercial transactions have been changed. This indicates the movement towards electronic commerce. This means there is no paper work and physical interaction is limited.

• In the early of 1970s
  
  The emergence of electronic commerce started in the early 1970s with the earliest example electronic funds transfer (EFT), which allows organizations to transfer funds between one another electronically.
  
  electronic interchange (EDI) was introduced. It helps to extend inter-business transactions from financial institutions to other types of business and also provides transactions and information exchanges from suppliers to the end customers. However, the early system development was limited to special networks.

• During the 1990s
  
  With a highly developed global Internet community technology, a strong foundation of prosperous electronic commerce continues to be built. During the 1990s, the Internet was opened for commercial use; it was also the period that users started to participate in World Wide Web (WWW), and the phenomenon of rapid personal computer (PCs) usage growth.
  
  Due to the rapid expansion of the WWW network; e-commerce software; and the peer business competitions, large number of dot-coms and Internet starts-ups appeared.

Timeline

• 1990: Tim Berners-Lee wrote the first web browser, WorldWideWeb, using a NeXT computer.
  
• 1992: J.H. Snider and Terra Ziporyn published Future Shop: How New Technologies Will Change the Way We Shop and What We Buy. St. Martin's Press. ISBN 0312063598.
  
• 1994: Netscape released the Navigator browser in October under the code name Mozilla. Pizza Hut offered pizza ordering on its Web page. The first online bank opened. Attempts to offer flower delivery and magazine subscriptions online. Adult materials were also commercially available, as were cars and bikes. Netscape 1.0 in late 1994 introduced SSL encryption that made transactions secure.
  
• 1995: Jeff Bezos launched Amazon.com and the first commercial-free 24 hour, internet-only radio stations, Radio HK and NetRadio started broadcasting. Dell and Cisco began to aggressively use Internet for commercial transactions. eBay was founded by computer programmer Pierre Omidyar as AuctionWeb.
  
• 1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.
  
• 1999: business.com was sold for US $7.5 million, which was purchased in 1997 for US $150,000. The peer-to-peer filesharing software Napster was launched.
  
• 2000: The dot-com bust.
  
• 2003: Amazon.com had its first year with a full year of profit.
  Source: http://en.wikipedia.org/wiki/E-commerce
  

In 2007, Fortune magazine ranked Dell as the 34th-largest company in the Fortune 500 list and 8th on its annual Top 20 list of the most successful and admired companies in the USA in recognition of the company’s business model.

According to the research conducted in 2008, the domain Amazon.com attracted about 615 million customers every year.

Source: http://www.ecommerce-land.com/history_ecommerce.html

An example of an E-Commerce failure and its causes

eToys.com is a retail website that sells toys via the Internet. eToys.com was founded by CEO Toby Lenk, COO Frank Han and Bill Gross . eToys filed for an initial public offering (IPO) valued at $115 million in February 1999. However, eToys delayed the IPO due to the acquisition of BabyCenter Inc., announced in April 1999.

On May 20, 1999, eToys opened the sale of stock to the public. This helped generate praise for the online toy category. Despite the positives, eToys suffered a black eye after it failed to deliver some orders in time for Christmas 1999. eToys’ lead was put in jeopardy after major competitive of eToys; Toys “R” Us and Amazon.com formed a partnership in August 2000.

The company then spent heavily to build two enormous warehouses to handle inventory and delivery. But Christmas sales for the 2000 season drop, leaving the company out in the cold. Having run out of money and other funding options exhausted, eToys filed for bankruptcy in March 2001.

In the following months, eToys sold $5.4 million worth of inventory, trade names, logos, URL’s, and trademarks for $3.35 million to KB Toys.The reasons behind eToys' failure are an immediate need for a large infrastructure and plenty of cash to support an untested business model. eToys built too big infrastructure and spent too much money too quickly.

eToys was reborn in October 2001 as a subsidiary of KB Toys. In 2004, eToys separated from KB Toys and is owned and operated by The Parent Company.

Yahoo! Where is its FUTURE?

Where would it GO ???

Yahoo! Inc. is an American public corporation incorporated and headquartered in Sunnyvale, California, in Silicon Valley and a global Internet services company. It provides a range of products and services including a Web portal, a search engine, the Yahoo! Directory, Yahoo! Mail, news, and posting. It was founded by Jerry Yang and David Filo in January of 1994 and incorporated on March 1, 1995.

In the early years of Yahoo!, its share price shot up sharply and its shareholders were the beneficiaries. Nevertheless, emergence of Google has taken over its leader position in the IT industry. Simplicity, user friendly, efficiency, speed...are the factors of Google's success. Subsequently, youtube, a video sharing website was acquired by Google. It even enhanced the competitveness of Google.

Compared to Google, the recent development of Yahoo! casts a doubt in its ability to survive from the severe challenges. Yahoo! 's challenge is convincing advertisers and marketing companies that it has a data-driven model that creates a more effective means of reaching consumers than first-generation search-based advertising. It is a challenge the 12 year old web portal needs to overcome if it hopes to regain its position at the top of the internet mountain after being shoved aside by Google.

Recently, Yahoo! rejected Microsoft's offer to buy out the company and there is a rumour saying that it might have a partnership with Google. As a consequence of the broke off, Google is the biggest winner and the pressure is now on Yahoo! CEO Jerry Yang. He has to deliver on his optimistic plan for 2010, hit his quaterly targets to prove to the institutional shareholders of Yahoo!'s sustainability. Analyst generally think that benefit to Yahoo!, of a combination with Google would be more than with Microsoft.

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Revenue Model of Google, Amazon.com, and eBay

How they make money?

Most of us must have heard of or visited these 3 websites as they are quite famous among internet users. Especially Google the search engine which every internet user would use it to search information.

Google's founders are Larry Page and Sergey Brin and they became millionaires as soon as the company listed in the market. Google provides various services ranging from mobile search engine to blog search. Well, let's look at how does Google generate revenue. Google's revenue model is largely based on advertising. Many businesses that want to put their advertisement online would go to Google AdWords. Google AdWords is a pay per click advertising program of Google designed to allow the advertisers to present advertisements to people at the instant the people are looking for information related to what the advertiser has to offer. When a user searches Google's search engine, ads for relevant words are shown as "sponsored link" on the right side of the screen, and sometimes above the main search results. It is an online advertising payment model in which payment is based onqualifying click-throughs. An advertiser has to pay every time his ad receives a click.

On the other hand, Amazon.com is one of the most successful e-commerce providers in which its income are mostly generated from transaction fees, affiliate fees and subscription fees. Amazon started as an online bookstore, but soon diversified its product lines from DVD to food.


Last year, my friend bought a second hand projector from an online auction marketplace--eBay. It is very convenient to my friend as he does not have to go to shop and buy it. e-Bay is an online auction and shopping Web site in which people and businesses buy and sell goods and services worldwide. It also owns PayPal, Skype, StubHub, and other business. Thus, it has various types of revenue models included advertising fees, affiliate fees and other revenue sources.

Comparing these 3 businesses revenue model, each business unit is focused on different revenue model and excel in their own field. Facing challenges from globalization, they continuously pursues improvement in providing services to maintain their competitive advantage. Therefore, they are able to beat their competitors and survived after dot-com bubble.