TERM PAPER OF

E-COMMERCE

Topic :- eBay Inc.

“aution anything, anywhere& to anybody”

Submitted to:- Dr. SYED HEIDER ALI

Submitted by :- Saurabh Tiwari

MBA(E-business) semIII
Roll no. 40

Index
1|Page
1. Acknowledgement 3
2. About eBay (origin, growth and present) 4
3. Business model of eBay(revenue structure) 8
Online auction business model
Competitors of eBay
4. Online security and payment system 21
Profit and transactions
Online security
Identification process
Specimen of online form of eBay
5. Ethical and social issues 29
Prohibited or restricted Items
Some interesting products on eBay
6. Appendix 32
EBay Q109 Earnings Release
eBay_PayPal Fast Facts(Q2-2009 FINAL)
eBay Market places Fast Facts
Picture of PIERRE OMIDYAR
7. Bibliography 33

ACKNOWLEDGEMENT
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I wish to give my special thanks to Dr. SYED HEIDER ALI for giving me this topic and
providing me with such a great guidance which helped me to complete this project. He
provided all the useful information and guided me at every step of the project.

SAURABH TIWARI

About eBay

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eBay Inc.:- A Short History
The eBay Inc. is an American Internet company that manages eBay.com, an online
auction and shopping website in which people and businesses buy and sell a broad variety of
goods and services worldwide. A majority of the sales take place through a set-time auction
format, but subsequent methods include a substantial segment of listings in the "Buy It Now"
category. In addition to its original U.S. website, eBay has established localized websites in
thirty other countries. eBay Inc. also owns PayPal, Skype (to be sold soon), StubHub, Kijiji, and
other businesses. From day one, Omidyar built eBay around what remain the company's core
values; a belief that:-

 People are basically good

 Everyone has something to contribute
 An open environment brings out the best in people.

The success of eBay underscores the truth of these values, and is at the heart of eBay's
continuing success.
Founded in 1995, eBay Inc. connects hundreds of millions of people around the world
every day, empowering them to explore new opportunities and innovate together. eBay Inc.
does this by providing the Internet platforms of choice for global commerce, payments and
communications. Since its inception, eBay Inc. has expanded to include some of the strongest
brands in the world, including eBay, PayPal(acquired in October 2002), Skype(acquired in 2005),
StubHub, Shopping.com and others. eBay Inc. is headquartered in San Jose, California.

eBay was born over Labor Day weekend in 1995, when Pierre Omidyar, a computer
programmer, wrote the code for an auction website that he ran from his home computer.
Today, Omidyar's hobby is known as eBay, the world's largest online marketplace - where
practically anyone can sell practically anything at any time. It's an idea that the BusinessWeek
once called "nothing less than a virtual, self-regulating global economy."

With a presence in 39 markets, including the U.S., and approximately 84 million active
users worldwide, eBay has changed the face of Internet commerce. In 2007, the total value of
sold items on eBay's trading platforms was nearly $60 billion. This means that eBay users
worldwide trade more than $1,900 worth of goods on the site every second.

The benefit to consumers is clear. eBay provides an open trading platform where the
market determines the value of items that are sold. Over the years, the site has become a
cultural barometer of sorts, providing a view into what objects consumers want most at any
time.Since its initial public offering in 1998, the company has continued to innovate and
connect people - and not just through its marketplaces. Two critical acquisitions have made
eBay Inc. a global leader in online payments and communications as well.

PROFILE OF COMPANY

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 About eBay Inc.

Type Public (NASDAQ: EBAY)

Founded September 3, 1995

Headquarters San Jose, California, United States
Key people Pierre Omidyar, Founder and Chairman
John Donahoe, CEO
Lorrie Norrington, President of eBay Marketplaces

Industry Auctions
Products Online auction hosting, Electronic commerce,
Shopping mall, PayPal, Skype, Gumtree, Kijiji,

Revenue ▲$8.541 billion USD (2008)

Net income ▲$1.779 billion USD (2008)
Employees 15,500 (Q1 2008)
Slogan 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.
Website www.ebay.com
List of domain names

Type of site Online auction

Registration Required to buy and sell
Available in Multilingual

PayPal enables any individual or business with an email address to securely, easily and
quickly send and receive payments online. Acquired by eBay Inc. in October 2002, PayPal builds
on the existing financial infrastructure of bank accounts and credit cards and uses the world's
most advanced proprietary fraud prevention systems to create a safe payment solution. Today,
PayPal is a global leader in online payment solutions. It has 149 million registered users and is
accepted by millions of merchants worldwide - on and off eBay. PayPal's Q1 2008 global total
payment volume of $14.4 billion accounted for nearly 9 percent of worldwide eCommerce.

Acquired by eBay Inc. in October 2005, Skype is an Internet communication company

that has revolutionized the way people talk online. With more than 309 million registered users
as of early 2008, Skype allows people everywhere to make unlimited voice and video calls
online for free using its software. Skype is available in 28 languages and is used in almost every
country on Earth. This business unit generates revenue through its premium offerings, such as
calls (using its software) made to and from landline and mobile phones; voicemail; call

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forwarding; and personalization, including ringtones and avatars. In addition to its presence on
eBay, Skype has relationships with a growing network of hardware and software providers.

Other key acquisitions have strengthened eBay Inc.'s portfolio of ecommerce companies,
Includes:-
o Shopping.com, a pioneer in online comparison shopping
o Stubhub, a leading online marketplace for the resale of event tickets
o Rent.com, the most visited online apartment listing service in the U.S.
o StumbleUpon, an online solution that helps people discover and share content on the
web and
o market-eading online classifieds sites including LoQUo.com, Intoko, and Netherlands-
based Marktplaats.nl. The company has also grown its classifieds business through Kijiji,
which launched in the U.S. in 2007.

ADDRESS OF eBay, PayPal and Skype Headquarters

eBay Headquarters PayPal Headquarters Skype Headquarters

eBay Inc. eBay Park North Skype Technologies S.A

2211 North First Street 22/24 Bd. Royal, 6e etage
2145 Hamilton Avenue

GROWTH OF eBay

1995

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 The first item sold on eBay was a broken laser pointer, for $14.83 on AuctionWeb. Idea
developed.

1996
With revenue topping $10,000 in June, the company hires its first employee. Soon after, Jeff
Skoll is hired as the first president of the company and Pierre Omidyar leaves his day job to
work on eBay fulltime.
eBay launches the Feedback Forum and introduces Final Value Fees.
Gross Merchandise Volume (the value of all goods sold on eBay):-$7.2 million
Registered eBay Users:-41,000

1997
The AuctionWeb brand is officially retired.
eBay is now hosting more than 200,000 individual auctions per month, compared with
250,000 auctions in all of 1996.
The market for Beanie Babies surpasses $500,000 on eBay.com
Feedback Stars make their debut.
Gross Merchandise Volume:-$95 million
Registered eBay Users:-341,000
Employees: 41

1998
Meg Whitman joins the company as President and CEO.
eBay launches the eBay Foundation, which helps a wide variety of national charities. In a
trendsetting move, pre-IPO shares are used to endow the charity.
eBay goes public in September, listing shares on NASDAQ with the symbol EBAY.
Personalization tool, My eBay, makes its debut.
Gross Merchandise Volume:-$740 million
Registered eBay Users:-2.1 million
Employees:-138

1999
eBay expands internationally with sites in the UK, Germany and Australia.
Fixed priced trading is introduced with "Buy it Now" option.
eBay Motors is launched.
Gross Merchandise Volume:-$2.8 billion
Registered eBay Users:-10 million
Employees:- 640

2000
eBay starts the year as the #1 e-commerce site.
eBay makes the first of several APIs (Application Programming Interfaces) publicly
accessible. eBay's APIs are today at the heart of a thriving Developers Program and

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 technology
EMPLOYEE NUMBER ecosystem.
First eBay
18000
University is
16000
held.
14000
eBay
12000
continues
10000
8000
6000
4000
2000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

EMPLOYEE NUMBER
international expansion with marketplaces in Austria, Canada, France and Taiwan.
eBay acquires Half.com.
Gross Merchandise Volume:-$5.4 billion
Registered eBay Users:-22 million
Employees: 1,900

2001
eBay introduces Auction for America, a charitable trading platform, on September 17 to
offer assistance to victims of September 11 attacks
International expansion accelerates with eBay marketplaces in Ireland, Italy, Korea, New
Zealand, Singapore and Switzerland
eBay Stores is launched
Gross Merchandise Volume:-$9.3 billion
Registered eBay Users:-42 million
Employees:- 2,500

2002
First ever eBay Live! Conference takes place in Anaheim, California.
eBay acquires PayPal.
Gross Merchandise Volume:-$14.9 billion
Registered eBay Users:-62 million
Employees:- 4,000

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 GROSS MERCHANDISE SALES
2007
2005
2003
2001 2003
1999
eBay expands
1997 into Hong Kong.
1995 eBay Live! held
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 in Orlando.
PayPal Buyer
GROSS MERCHANDISE SALES Protection
services
introduced for eBay transactions.
Gross Merchandise Volume:-$23.8 billion
Registered eBay Users:-95 million
Total PayPal Accounts:-40 million
Total Payment Volume(sum of PayPal processed transactions): $11.6 billion
Employees: 5,700

2004
eBay Live! held in New Orleans.
PayPal Buyer Protection services increased to $1,000.

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 Classified advertising site Marketplaats.nl is acquired
eBay expands into Malaysia and the Phillipines.
eBay acquires the Bazee marketplace in India.
Rent.com is acquired.
eBay opens its China Development Center in Shanghai to accelerate technology innovation
Gross Merchandise Volume:-$34.2 billion
Registered eBay Users:-135 million
Total PayPal Accounts:-63.8 million
Total Payments Volume:-$18 billion
Employees: 8,100

2005
eBay launches Kijiji, a local classifieds site available in nearly a dozen countries.
eBay acquires leading international classified advertising sites LoQuo and Gumtree.
eBay acquires Shopping.com.
eBay acquires Skype.
PayPal acquires the Verisign Merchant Gateway.
eBay Live! held in San Jose, California.
eBay expands, into Poland, and Sweden.
eBay launches ProStores.
Gross Merchandise Volume:-$44.3 billion
Registered eBay Users:-181 million
Total PayPal Accounts:-96.2 million
Total Payments Volume:-27.5 billion
Employees: 10,200

2006
eBay Express is launched.
The two millionth passenger vehicle is sold on eBay Motors
eBay Live! held in Las Vegas.
Gross Merchandise Volume:-$52.5 billion
Registered eBay Users:-222 million
Total PayPal Accounts:-133 million
Total Payments Volume:-38 billion
Total Skype Users:-171 million
Employees: 13,200

2007
PayPal Buyer Protection services doubled to $2,000.

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 eBay acquires online ticketing site StubHub.com.
eBay acquires StumbleUpon.com.
eBay's India Development Center launches to further accelerate the pace of innovation.
eBay Live! held in Boston at which time CEO, Meg Whitman, declares that users will see
more changes to eBay.com in the next six months than have been made in the past 6 years.

The company has different sites for different country. This makes eBay more close to local
people, thus help customization. Anybody (registered users) can shop from any site using the
same profile. The user feel more comfortable shopping in their zone or country. The comfort
can be an illusion but it does exists.

List of domain names

NAME OF COUNTRY WEB SITE
Australia http://www.ebay.com.au/
Austria http://www.ebay.at/
Belgium http://www.ebay.be/
Canada http://www.ebay.ca/
China (now defunct) http://www.ebay.com.cn (site now redirects to
eachnet.com)
France http://www.ebay.fr/
Germany http://www.ebay.de/
Hong Kong http://www.ebay.com.hk/
India http://www.ebay.in/
Indonesia http://id.ebay.com/
Ireland http://www.ebay.ie/
Israel http://www.ebay.co.il/
Italy http://www.ebay.it/
Japan http://www.sekaimon.com/ (Joint venture with
Yahoo! Japan)
Malaysia http://www.ebay.com.my/
Netherlands http://www.ebay.nl/
New Zealand http://www.ebay.co.nz/
Philippines http://www.ebay.ph/

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 Poland http://www.ebay.pl/
Singapore http://www.ebay.com.sg/
South Africa http://www.ebay.co.za/
South Korea http://www.auction.co.kr/
Spain http://www.ebay.es/
Sweden http://www.tradera.com/
Switzerland http://www.ebay.ch/
Taiwan http://ruten.com.tw (joint venture with PCHome)
Thailand http://www.ebay.co.th/
Turkey http://www.gittigidiyor.com/
United Kingdom http://www.ebay.co.uk/
United States http://www.ebay.com/
Vietnam http://www.ebay.vn/
Mexico http://ebay.com.mx/

Here is comparison between eBay.com(which an American site) and the eBay.in(which is the
Indian site). One can see that registrar for the two site are different. The IP address of two
servers are different. The IP location of the server are different.

ebay.in
eBay.com
Registrar MARKMONITOR INC.
Registrant Organization eBay International AG
Created: 1995-08-04 Created 2005-02-16
Expires: 2018-08-03 Expires 2012-02-16
IP Address 96.17.8.11
Whois Server: whois.markmonitor.com
IP Location Massachusetts -
Server Type: Apache-Coyote/1.1 Cambridge - Akamai
IP Address: 66.135.200.27 Technologies
IP Location California - Campbell - Visitors by Country India 93.8%
Ebay Inc United States 1.9%
Visitors by United States 71% Visitors by City New Delhi 16.2%
Country: Great Britain(UK)2.8% Bombay 15.5%
China 2.2% Madras 10.8%
Canada 2.1% Bangalore 8.4%
Germany 1.8% Hyderabad 5.9%
India 1.7% Delhi 3.9%
Visitors by City: Los Angeles 6.2%
New York 5.5%
San Francisco 3.1%
Chicago 2.1%
Philadelphia 1.9%
Boston 1.6%
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Registrant:
        Domain Administrator
        eBay Inc.
        2145 Hamilton Avenue
         San Jose CA 95125
        US

          +1.4083767400 Fax: +1.4083767514

Expansion and acquisition

eBay has been heavily in evolved in expansion and acquisition. These acquisition were for two
reasons one expansion and other elimination competitor from the local market. Like in India it
bought the Baazee.com (then leading site). Here is the list of acquisitions:-

AcquisitionsAcquisition date Company Business

July 16, 1998 Up4Sale.com Online auction
April 27, 1999 Butterfield & Butterfield Auction house
May 18, 1999 Billpoint E-commerce payment systems
June 22, 1999 Alando Auction house
June 13, 2000 Half.com Online marketplace
December 12, 2000 Precision Buying Service E-commerce payment systems
January 8, 2001 Internet Auction Co. Online auction
March 5, 2001 iBazar Online auction
July 8, 2002 PayPal E-commerce payment systems
January 31, 2003 CARad.com Online auction
July 11, 2003 EachNet Electronic commerce
June 22, 2004 Baazee.com Online auction
August 14, 2004 Craigslist Classified advertising
November 10, 2004 Marktplaats.nl Classified advertising
December 16, 2004 Rent.com Classified advertising
May 18, 2005 Loquo Classified advertising
May 19, 2005 Gumtree Classified advertising
June 2, 2005 Shopping.com Online shopping
June 30, 2005 OpusForum.org Classified advertising
September 13, 2005 Skype Voice over Internet Protocol

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 March 9, 2006 Meetup.com Social network service
April 24, 2006 Tradera Online auction
January 10, 2007 StubHub Electronic commerce
May 3, 2007 GittiGidiyor Electronic commerce
May 30, 2007 StumbleUpon Browser plugin
October 6, 2008 Bill Me Later Electronic Commerce
October 6, 2008 dba.dk & bilbasen.dk Classified advertising

In April 2009, Ebay announced the plan of taking Skype IPO in 2010, and selling StumbleUpon to a group
of private investors including Sherpalo Ventures, Accel Partners, and August Capital.

Business model of eBay

The business model of eBay is consumer-to- consumer (C2C). The C2C ventures provide a way
for consumers to sell to each other, with the help of an online business. The eBay is the pioneer
site to provide C2C services. In fact it was the first innovative idea of such nature in web world.
Before eBay, individual consumers used garage sales, flea market and thrift shops to both
dispose of and acquire used merchandise. With the introduction of online auctions, consumers
no longer had to venture out of their homes or offices in order to bid on items of interest and
sellers could relinquish expensive retail space that was no longer needed in order to reach
buyers. In return for linking like-minded people the eBay money. In fact it is one of few Web
companies that has been profitable from day one and has stayed so for several years.

Online auction business model

The online auction business model is one in which participants bid for products and services
over the Internet. The functionality of buying and selling in an auction format is made possible
through auction software which regulates the various processes involved.

Several types of online auctions are possible. In an English auction the initial price starts low
and is bid up by successive bidders. In a Dutch auction, multiple identical items are offered in
one auction, with all winning bidders paying the same price -- the highest price at which all
items will be sold (treasury bills, for example, are auctioned this way). Almost all online auctions
use the English auction method.

Strengths of the business model

The strategic advantages of this business model include:

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 1. No time constraints. Bids can be placed at any time (24/7). Items are listed for a
number of days (usually between 1 and 10, at the discretion of the seller), giving
purchasers time to search, decide, and bid. This convenience increases the number of
bidders.
2. No geographical constraints. Sellers and bidders can participate from anywhere that
has internet access. This makes them more accessible and reduces the cost of
"attending" an auction. This increases the number of listed items (ie. number of sellers)
and the number of bids for each item (e.g. number of bidders). The items do not need to
be shipped to a central location, reducing costs, and reducing the seller's minimum
acceptable price.
3. Intensity of social interactions. The social interactions involved in the bidding process
are very similar to gambling. The bidders wait in anticipation hoping they will "win."
Much like gambling addiction, some bidders may bid primarily to "play the game" rather
than to obtain products or services. This creates a highly loyal customer segment. This
can also skew the prices of items/services/goods in the auction.
4. Large number of bidders. Because of the potential for a relatively low price, the broad
scope of products and services available, the ease of access, and the social benefits of
the auction process, there are a large numbers of bidders.
5. Large number of sellers. Because of the large number of bidders, the potential for a
relatively high price, reduced selling costs, and ease of access, there are a large number
of sellers.
6. Network economies. The large number of bidders will encourage more sellers, which, in
turn, will encourage more bidders, which will encourage more sellers, etc., in a virtuous
circle. The more the circle operates, the larger the system becomes, and the more
valuable the business model becomes for all participants.
7. Captures consumers' surplus. Auctions are a form of first degree price discrimination.
As such, they attempt to convert part of the consumers' surplus (defined as the area
above the market price line but below the firm's demand curve) into producers' surplus.

In 2007, eBay began using detailed seller ratings with four different categories. When leaving
feedback, buyers are asked to rate the seller in each of these categories with a score of one to
five stars, with five being the highest rating and one the lowest. Unlike the overall feedback
rating, these ratings are anonymous; neither sellers nor other users learn how individual buyers
rated the seller. The listings of sellers with a rating of 4.3 or below in any of the four rating
categories appear lower in search results. Power Sellers are required to have scores in each
category above 4.5.

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Criticism of online auction

Auction sites, like garage sales, flea markets, classified advertisements and other independent
sales venues, sometimes draw criminals wishing to sell stolen products, but for law
enforcement organizations, finding stolen goods offered online is sometimes easier than more
traditional detection methods.

Some criticism is leveled at online auction websites for uneven representation of items offered
for sale. Descriptions may omit important information, and photos may not be adequate.
Potential bidders can typically protect themselves by reading the text, studying photographs
and asking questions of the seller before bidding. Studies show that a large proportion of
unsatisfactory online purchase experiences are the result of careless consumerism.

In the U.S., large retailers have lobbied Congress to require online auction sites to share private
sales information about sellers, citing potential illegalities. Within the online auction community
this is commonly viewed as an attempt at unfair market protection and trade restraint.
Reduced overhead sometimes enables independent online sellers to offer goods at lower prices
than large retailers.

Online auction selling has attracted millions of laid-off workers, as well as the disabled, parents
of young children, retirees, pensioners and others that are unable to find employment in the
mainstream workforce. Online auction venue corporations are accused of engaging in
discriminatory trade practices that unfairly impact such customers. Presently, the trading
practices of online auction venue corporations is not regulated by state or federal agencies.

Process of Auction on eBay

eBay offers several types of auctions. These are as following:-

 Auction-style listings allow the seller to offer one or more items for sale for a specified
number of days. The seller can establish a reserve price.

 Fixed Price format allows the seller to offer one or more items for sale at a Buy It Now
price. Buyers who agree to pay that price win the auction immediately without
submitting a bid.

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  Fixed Price format with Best Offer allows the seller to accept best offers. If a buyer
submits a best offer, the seller either rejects or accepts the best offer. If the best offer is
not satisfactory, a seller may submit a counter offer to the buyer. Best offer is not
available for auction style listings. In addition, best offer is not available in every
category. Sellers also meet specific requirements in order to sell with best offer.

 Dutch Auctions allow the seller to offer two or more identical items in the same auction.
Bidders can bid for any number from one item up to the total number offered.

Auction-style bidding

Bidding on eBay's auction-style listings is called proxy bidding and is essentially equivalent to a
Vickrey auction, with the following exceptions.

The winning bidder pays the second-highest bid plus one bid increment amount (i.e. some small
predefined amount relative to the bid size), instead of simply the second-highest bid. However,
since the bid increment amounts are relatively insignificant compared to the bid size, they are
not considered from a strategic standpoint.

The current winning bid is not sealed, but instead is always displayed. However, at any given
moment, the highest bidder's bid is not necessarily displayed, since this amount may be higher
than the amount required to win the auction.

Example of bidding on an auction-style listing.

Suppose bidding for an item starts at $1.00 and that the bid increment amount in this price
range is $.25. Rakesh bids $3.00 for the item, and since no one else has bid yet, eBay displays
that the current winner is Rakesh, with a bid of $1.00, and that the minimum allowable bid is
$1.25, which is equal to one bidding increment above the winning bid. Suppose then that
Gunjan bids $2.00 for the item. Since Rakesh has already bid more than Gunjan, eBay will
display that the current winner is Rakesh, with a bid of $2.25, which equals the second-highest
bid ($2.00) plus the bid increment amount ($.25). Again, eBay will also display that the
minimum allowable bid is $2.50, one bid increment above the winning bid. Suppose that
Gunjan bids again, this time at $2.75. Again, since Rakesh's bid is higher than Gunjan's, eBay will
display that the current winning bidder is Rakesh, with a bid of $3.00, which is equal to the
second-highest bid ($2.75) plus the bid increment ($.25). eBay will also display that the
minimum allowable bid is $3.25, one bidding increment above the current winning bid. Suppose
Gunjan bids one more time, at $10.00. Since Gunjan's bid is now higher than Rakesh's, eBay will
display that the current winning bidder is Gunjan, with a bid of $3.25, which is equal to the
second-highest bid ($3.00) plus the bid increment ($.25). If Gunjan were to win the auction, she

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would have to pay the amount equal to the winning bid ($3.25), even though her previous bid
was much larger than that.

Dutch Auctions

For Dutch Auctions, which are auctions of two or more identical items sold in one auction, each
bidder enters both a bid and the number of items desired. Until the total number of items
desired by all bidders equals the total number of items offered, bidders can bid any amount
greater than or equal to the minimum bid. Once the total numbers of items desired by all
bidders is greater than or equal to the total number offered, each bidder is required to bid one
full bidding increment above the currently displayed winning bid. All winning bidders pay the
same lowest winning bid.

The Dutch Auction format is scheduled to be discontinued in May 2009; statistically, it is not
widely used, having been supplanted by other formats such as Fixed Price auctions.

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 register user
STOP

AUCTION PROCESS

N
Check user
authenticity/ balance

y
N
WIN- STOP
NER

Y
SERVER

Information
CREDIT /DEBIT

COMPANY
eBay

seller

1 2
SERVER
SERVER

Credit to sellers
A/C
PAYPAL
PALPAY

BUSINESS PROCESS AT eBay

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Competitors of eBay
Apex auctions -a Brighton-based auctioneer who specialize in auctioning CNC and manual
machines.

Bidorbuy -is South Africa's largest internet auction website.

Bidtopia -is an online auction site.

The Debt Exchange -one of the largest internet loan sellers, loan sale advisors, and brokers of
subprime loans in the world.

eBid -is an online auction website.

GunBroker-is an Atlanta based auction website specializing in the sale of firearms.

Heritage Auction Galleries -the world's largest collectibles auctioneer and the third largest
auction house.

Hobby Markets Online -a series of person-to-person marketplaces for high-end collectibles.

Lixtor -is an Internet-auction website operating in New Zealand since 2005.

MercadoLibre -in Portuguese (Brazil) is a website dedicated to online auctions.

Overstock -is an online retailer headquartered in Cottonwood Heights, Utah, near Salt Lake City.

Oztion -is an online auction site designed for Australians.

Prosper -an online auction website where individuals can buy loans and request to borrow
money.

SalvageSale - is an online auction marketplace built for the disposal of insurance and corporate surplus,
salvage and other goods.

TradeMe -Internet-auction website operating in New Zealand as of 2009.

Tradus (former QXL) -is an online auction company that operates in Europe.

uBid - deals in Excess inventory from the world's most trusted brands

Yahoo! (Yahoo! Auctions is active in other countries such as Japan, Taiwan and Hong Kong.)

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Profit and transactions
eBay generates revenue from a number of fees. The eBay fee system is quite complex; there
are fees to list a product (Insertion Fee) and fees when the product sells (Final Value Fee), plus
several optional adornment fees, all based on various factors and scales. The U.S.-based
eBay.com takes $0.10 to $4 (based on the opening price) for a basic listing without any
adornments and 8.75% or less of the final price (as of May 2009). The UK based ebay.co.uk
(ebay.co.uk offices) takes from GBP £0.15 to a maximum rate of GBP £3 per £100 for an
ordinary listing and from 0.75 percent to 10% (writing as of June 2009) percent of the final
price. Reduced FVF's are available to business registered customers. In addition, eBay now
owns the PayPal payment system which has fees of its own.

Under current U.S. law, a state cannot require sellers located outside the state to collect a sales
tax, making deals more attractive to buyers. Although some state laws require purchasers to
pay sales tax to their own states on out-of-state purchases, it is not a common practice.
However, most sellers that operate as a full time business do follow state tax regulations on
their eBay transactions. However for the tax called Value added tax (VAT), eBay requires sellers
to include the VAT fees in their listing price and not as an add-on and thus eBay profits by
collecting fees based on what governments tax for VAT.

The company's current business strategy includes increasing international trade. eBay has
already expanded to over two dozen countries including China and India. The only places where
expansion failed were Taiwan and Japan, where Yahoo! had a head start, and New Zealand
where TradeMe, owned by the Fairfax media group is the dominant online auction website.

A more recent strategy involves the company increasingly leveraging the relationship between
the eBay auction site and PayPal. The impact of driving buyers and sellers to use PayPal means
not only does eBay turn buyers into clients (as a pure auction venue its clients used to be
predominantly sellers) but for each new PayPal registration it achieves via the eBay auction site
it also earns offsite revenue when the resulting PayPal account is used in non-eBay transactions.
In its Q1 2008 results, total payment volume via PayPal increased 17 percent, but off the eBay
auction site it was up 61 percent.

For most listing categories, eBay sellers are permitted to offer a variety of payment systems
such as Paypal, Paymate, ProPay, and Moneybookers.

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eBay runs an affiliate program under the name eBay Partner Network. eBay affiliate marketers
Fees are paid a percentage of the eBay seller's transaction fees. The payout is 50% to 75% of
the fees paid for an item purchased.

Payment system
The eBay ensures full security to customers will up loading a product for bid, bidding, delivery
and payment. PayPal is an e-commerce business allowing payments and money transfers to be
made through the Internet. PayPal serves as an electronic alternative to traditional paper
methods such as checks and money orders.

A PayPal account can be funded with an electronic debit from a bank account or by a credit
card. The recipient of a PayPal transfer can either request a check from PayPal, establish their
own PayPal deposit account or request a transfer to their bank account. PayPal is an example of
a payment intermediary service that facilitates worldwide e-commerce.

PayPal performs payment processing for online vendors, auction sites, and other commercial
users, for which it charges a fee. It sometimes also charges a transaction fee for receiving
money (a percentage of the amount sent plus an additional fixed amount). The fees charged
depend on the currency used, the payment option used, the country of the sender, the country
of the recipient, the amount sent and the recipient's account type. In addition, eBay purchases
made by credit card through PayPal may incur a "foreign transaction fee" if the seller is located
in another country, as credit card issuers are automatically informed of the seller's country of
origin.

Safety and protection policies followed by PalPay

The PayPal Buyer Protection Policy states that customers may file a buyer complaint within 45
days if they did not receive an item or if the item they purchased was significantly not as
described. If the buyer used a credit card, they might get a refund via chargeback from their
credit card company. According to PayPal, it protects sellers in a limited fashion via the Seller
Protection Policy. In general the Seller Protection Policy is intended to protect the seller from
certain kinds of charge backs or complaints if seller meets certain conditions including proof of
delivery to the buyer. PayPal states the Seller Protection Policy is "designed to protect sellers
against claims by buyers of unauthorized payments and against claims of non-receipt of any
merchandise". Note that this contrasts with the consumer protection they offer. This policy
should be read carefully before assuming protection. In particular the Seller Protection Policy

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includes a list of "Exclusions" which itself includes "Intangible goods", "Claims for receipt of
goods 'not as described'" and "Total reversals over the annual limit". There are also other
restrictions in terms of the sale itself, the payment method and the destination country the
item is shipped to (simply having a tracking mechanism is not sufficient to guarantee the Seller
Protection Policy is in effect). A class-action lawsuit was filed against PayPal, days after the
company's successful initial public offering.

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Online security
E-commerce is booming with growth of internet and mobile services. Traditional business
process and model are switching “click model” of business. Some businesses are using internet
as medium of expansion of their marketing strategy or consolidation strategy and then
graduating to enterprise resource planning (ERP). While some business have developed on the
computer and internet itself with having any physical supply chain or marketing chain. Online
auction firms (eBay) or online books (Amazon.com) stores or online retail (e-retail) are such
virtual companies those are doing business of physical product with them self producing
anything, warehousing anything or marketing anything.

These e-commerce sites are dependent on network of network i.e internet. The internet has
its on problems which are inherited to these e-commerce operations. Like Trojan horse, hacking
etc. In addition to these the online auction sites also face some problems of peculiar types. The
online auction sites problems face these problems :-

 Hacking
 Viruses and Trojan horses
 Fraud online auction site
 Fraud on part of seller
 Fraud on part of buyer
 Stealing of credit card password
 Undeclared or hidden fees

The VeriSign provides certification to the eBay site. It ensures SSL framework protocol to the
users.

Process of sign up
The sign up process includes filling up of online form and then identification check. The
form requires an individual to fill in details of name, address, age telephone, nationality.
Once form filling process is over the company server makes a call on the landline number or
send SMS on the mobile. In both the cases a secret code is given to the person owning the
phone. He/she has to type in the secret code in the email that is generated by the system.
This confirms the identification to the user.

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 IDENTIFICATION PROCESS

ONLINE FORM

User fills form

CODE SEND BACK

eBay server

SMS OR
SECRET CODE
IS SEND

DATABASE

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SPECIMEN OF ONLINE FORM OF eBay

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 All the details of the person are stored into database, even the IP address at eBay International
AG and stored and processed by eBay Inc. located San Jose, CA, USA. When ever the person log
in he or she welcomed by the eBay by the “login name” of the user. Even if the login name is
correctly identified by the system, the person is to login through proper process.

An account holder need to be at least 18 years old to register on eBay, because when to buy
and sell on eBay he/she must be actually making a legally binding contract. If a user is under 18,
he/she can use eBay with a parent or guardian.

Any members find that they need two accounts if they sell two different types of items, or they
sell so many items that they need two accounts to keep things organized. They can have two
accounts with the following limitations :-

 The two accounts must have different user IDs and different email addresses.
 The two accounts can never bid on each other’s listings or be involved in the same
listing in any way, nor be involved with each other's Member Profiles.

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Ethics and social issues
Prohibited or restricted Items
In its earliest days, eBay was essentially unregulated. However, as the site grew, it became necessary to
restrict or forbid auctions for various items. Note that some of the restrictions relate to eBay.com (the
US site), while other restrictions apply to specific European sites (such as Nazi paraphernalia). Regional
laws and regulations may apply to the seller or the buyer. Generally, if the sale or ownership of an item
is regulated or prohibited by one or more states, eBay will not permit its listing. Among the hundred or
so banned or restricted categories.

Tobacco (tobacco-related items and collectibles are accepted.)

Alcohol (alcohol-related collectibles, including sealed containers, as well as some wine sales by licensed
sellers are allowed).

Drugs and drug paraphernalia.

Nazi paraphernalia.

Bootleg recordings.

Firearms and ammunition, including any parts that could be used to assemble a firearm as well as (as of
July 30, 2007) any firearm part that is required for the firing of a gun, including bullet tips, brass casings
and shells, barrels, slides, cylinders, magazines, firing pins, trigger assemblies, etc. Crossbows and
various types of knives are also forbidden.

Used underwear (see Panty fetishism) and dirty used clothing.

Teachers' editions of textbooks including home school teacher's editions.

Human parts and remains (with an exception for skeletons and skulls for scientific study, provided they
are not Native American in origin).

Live animals (with certain exceptions).

Certain copyrighted works or trademarked items.

Lock-picking tools, accessories, and practice locks fall into the category of burglar tools.

Lottery tickets, sweepstakes tickets, or any other gambling items.

Military hardware such as working weapons or explosives.

Any items of a sexual nature must be listed in the Adult Only category, which prohibits.

Child Pornography.

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Obscene Materials including bestiality, necrophilia, rape, scat, and incest.

Pre-owned sex toys.

Services including any sexual activity.

Links to sites that contain prohibited items.

Adult products that are delivered digitally.

Virtual items from massively multiplayer online games, restrictions which vary by country.

Non-physical items no longer can be sold through eBay. They can only be advertised through classified
ads on eBay and do not get feedback.

Ivory products.

Knives, other than cutlery, are prohibited in the UK following media pressure about the sale of items
assessed by police to be 'illegal'.

Many other items are either wholly prohibited or restricted in some manner.

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Some interesting products on eBay
In October 2008, amidst the 2008–2009 Icelandic financial crisis one seller had put up Iceland for sale.
Auction started with 99 pence but had reached 10 million pounds (US $17.28 million). However, singer
Björk was "not included" in the sale. The notice read Located in the mid-Atlantic ridge in the North
Atlantic Ocean, Iceland will provide the winning bidder with — a habitable environment, Icelandic
Horses and admittedly a somewhat sketchy financial situation. Bidders' questions included: "Do you
offer volcano/earthquake insurance?"

In November 2008, a Swedish man put a digitally hand-drawn picture of a 7-legged spider onto eBay.
The picture stemmed from an article on the site 27bslash6.com wherein David Thorne (writer) claims to
have attempted to pay a Chiropractor's bill with a picture of a 7-legged spider, which he valued at
$233.95. On eBay, the bidding price started at $233.95, with bidding ended at a sale price of US$10,000.
[109] Both the e-mail exchange and the picture have become internet hits.

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PIERRE OMIDYAR

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 BIBLIOGRAPHY

E-Commerce (business.technology.society) by Kenneth C Laudon and Carol

Gurercio Traver (Pearson education)

Stratigic Management (Formulation, Implementation and Control) 10th by Pearce,

Robinson and Amita Mital (Tata McGraw hill )

Web Based DNS Lookup (NSLookup) (ZoneEdit.com)

www.wikipedia.org

www.ebay.com

www.ebay.in

www.verisign.com

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