An Analysis of the E-bay E-commerce Platform

This report provides an analysis of the E-bay e-commerce platform, including its organization overview, business model, website features, and security issues. It discusses the history of E-bay, its business model, and the various features of its website. It also highlights the security concerns surrounding E-bay and suggests ways to improve its performance and security.

Running head: AN ASSESSMENT OF E-BAY WEBSITE
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An analysis of the E-bay E-commerce Platform
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Introduction
E-Bay, an American multinational e-commerce company, facilitates business-to-
consumer as well as consumer-to-consumer sales via its website. With operations in over 30
countries, e-bay is a multibillion-dollar business. E-bay is a shopping website and a platform that
allows users to run online auctions. Buyers freely use the website while sellers pay a fee for
listing items after a limited number of free listings and also after selling the items. Apart from e-
bay’s original auction-style sales, the e-commerce site has expanded and grown to include;
shopping by Universal Product code and other techniques of SKU number as well as instant “buy
it now” shopping. The following report covers an analysis of the e-commerce website e-bay,
including several contents on the Company, such as its organization overview, business model,
and a review of the e-bay website. It concludes by discussing recommendations on ways the
performance of the website can be improved.
E-bay’s Organization overview
Pierre Omidyar started e-bay in 1995, which turned out to be a success during the dot-
com bubble. The French-born Iranian-American founded the website which initially was called
Auctionweb, as a section of a more significant personal site. According to reports, the website
was only a side hobby for the programmer and only upgraded it to a business website after his
Internet service provider advised him to do so as the site was generating a high volume of traffic.
E-bay partnered with Electronic Travel Auction Company for its first third-party licensing deal
in 1996. The deal enabled the Company to use smart market technology in selling plane tickets
as well as other travel products.

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The name of the Company was officially changed from AuctionWeb to e-bay in 1997 and
had its initial public offer the next year. In the early 2000s, eBay grew its product categories
beyond collectibles into almost any saleable product, leading to the business rapidly growing.
By 2000, eBay had a cyber-inventory of over 4.5 million items for sale on any given day and 12
million registered users. In February 2002, e-bay bought iBazar, a European auction web
established in 1998 and then acquired PayPal on October 2002.The Company also acquired 25
percent of Craigslist, a classified listings website in 2004 and acquired Skype in 2005 but
completed its sale in 2009 for 2.75 billion US dollars remaining with only 30 percent equity in
the Company. E-bay also bought StubHub, an online ticket exchange company, in January 2007
for $310 million.
By 2008, e-bay had extended internationally to reach hundreds of millions of registered
users and was hiring 15,000 staff and reaching revenues of close to $7.7 billion. In 2015, E-bay
spin off PayPal into a different public trading company. EBay's common stock has been trading
on the Nasdaq Global Select Market since September 24, 1998. The Company's recent financial
records indicate there are close to 3, 661 holders in record of the Company's common stock. E-
bay has not been paying cash dividends on its stock and only began recently in January 2019
when the Company's board of directors initiated a quarterly cash dividend of $0.14 per share of
common stock to be paid out ( Frooition.com , 2016). EBay’s 2018 annual report indicates the
Company's repurchase activity during the three months ending December 31, 2018, as follows;
The Company's total number of shares bought closed at 22,930,017 and the Company's price per
share was $28.91.

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E-bay has a hierarchical organization structure due to the extensive size of the
organization. The Company underwent a major restructuring of its organizational structure after
the Paypal spinoff. E-bay's board of directors is made up of 11 members with Thomas J. Tierney
being its chairman, and David Wenig is the current CEO and president of the executive team.
E-bay’s business model
E-bay enables commerce over three reportable segments; enterprise, marketplaces, and
payments. The Company has outstanding marketplace features through its website, which is a
leading commerce platform for both merchants and users. E-bay provides different access points
for users to connect virtually anywhere and at any time. Besides, the Company's website
provides a wide selection of inventory worldwide. The Company strives to provide value to the
customers by offering different consumers choice as well as a variety of unique vertical shopping
experiences (eSellerHub, 2017). E-bay's payment features enable shoppers to pay both physically
and also through online transactions. The Company's global scalability and reach provide value
to its merchants and consumers. E-bay focuses on simplifying solutions for developers and
consumers by offering several funding mechanisms and applying leading fraud protection and
prevention payment solutions.
E-bay's enterprise segment drives three core lines of business including commerce
technologies, Omnichannel Operations Solutions, and commerce marketing solutions. The
Company's commerce technologies include an enterprise retail order management solution, an
enterprise payment infrastructure, an enterprise store fulfilment solution, and an enterprise retail
associate platform. The Company's omnichannel solutions include; enterprise freight and

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fulfilment solutions, providing operational efficiency, cost efficiencies as well as scalability that
retailers cannot achieve by themselves. E-bay provides scalable, top market direct to consumer
fulfilment with different campuses across the world.
The marketing solutions for e-bay focus on providing industry-leading, comprehensive
marketing technology solutions, and digital agency services. This includes a set of demand
generating capabilities such as; affiliate marketing, email and mobile marketing, attribution,
online advertising display targeting as well as CRM and database. The Company's enterprise
agency services provide full-service digital marketing unique in optimization and analytics,
search engine marketing, studio and media services, user experience design, usability research,
and creative services.
E-bay’s Website
Website content
The e-bay website involves three different users, including; shoppers, sellers, and admins.
Features of the website revolve around these three users. One of the vital content of the e-bay
website is an authorization field. Buyers are required to sign up by providing their names and
email addresses to be allowed to make any purchase. Sellers also require to register to be able to
list items for sale and set the prices. E-bay also has inventory management that enables sellers to
include, view, publish, and edit products on the marketplace and also monitor the status of the
products easily. The website also contains an admin panel that enables an admin to moderate
auctions as well as manage products on the marketplace, bids, users and website content.

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The website also contains an order management portfolio which allows merchants to
process orders received from the marketplace. Another feature of the e-bay website is its product
search, which gives the shoppers the chance to easily locate items by location, size, price, and
other criteria. The product view feature allows shoppers to ensure the product meets their unique
needs before purchasing it. Another important content on the website is the shopping cart. The
feature enables buyers to choose many items from various sellers and pay for all at once.
E-bay website hardware infrastructure
Just like most massive e-commerce activities, e-bay applies a microservices architecture
instead of a monolithic design. The website operates over 1000 services with front-end
experiences calling the API’s for the services and a back-end service for shipping. As part of its
effort to modernize and replatform the backend infrastructure, e-bay launched its custom-
designed servers. The servers built by e-bay for e-bay, are open source hence available to the
public. The servers cater to the website's needs resulting in greater efficiencies, better customer
experience, and minimizes the Company's dependence on third parties. E-bay applies a Point of
Presence strategy in its physical foundation, distributing the cluster of data centers the Company
has in the U.S. By implementing this edge computing technique, e-bay saves 600-800
milliseconds of load time.
A sequence of service disruptions in 1999 led e-bay to change its technological
architecture completely. For three days running, the Company's servers irregularly crashed due
to system overload, affecting the users as they could not check auctions, complete transactions,
or place bids during that period. E-bay switched from a common database server and a small

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number of independent systems operating a search function, and now has multiple database and
search servers. E-bay applies a grid computing type of architecture that enables both error
growth and correction (Papaioannou, 2013). Apart from the search function, everything about the
website can actually operate on around 50 servers, application servers, web servers as well as
data-storage systems. Each server has approximately six to twelve microprocessors. The over 50
servers run separately, but communicate with one another, allowing users to identify if a problem
arises anywhere.
E-bay is also creating customized models for its data layer. By applying open source
technologies, the Company developed NuData, a geo-distributed, fault-tolerant data store. The
unique models enable e-bay to decentralize data geographically, improving customers'
experience, improving the resiliency of the website services as well as providing data isolation
solutions for countries needing them. E-bay funnels massive data through its website and has
recently made several transformations on its hardware, forcing the Company to develop an in-
house AI engine highly shareable across its teams. This has lead in the teams increasing
productivity arising from the ease in training and collaboration.
E-bay Software features
E-bay uses the Frooition software as the listing tool for its sellers. The tool allows the
merchants to create a list quickly and is simple to use. Frooition software has several features
including; design management, which enables users to change the aspects of their design. Users
can choose which design elements will display for each listing, synchronize live categories into
listings, as well as automatically update all live listings with the latest categories (Go, 2018). The

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Frooition software also contains unique features such as; its easily compatible with 3rd party
listing tools, generates a compliance report confirming if products can integrate with the eBay
catalogue and creates pre-set business and shipping policies.
E-bay security Issues
Despite the success of e-bay in the e-commerce business, the website has been recently
hit with security flaws, hacks as well as data breaches. Among the most recent famous e-bay
breach happened in early 2014. The Syrian Electronic Army (SEA) was responsible for the
breach which stole over 100 million users’ physical and email addresses, encrypted passwords,
phone numbers as well as dates of birth (Prince, 2016). The e-bay system is to external hacks.
Several complaints have been raised by e-bay users on hacks launched through an automatic
mass password reset request attacks.
Payment/Transaction Process
E-bay uses a payment system known as PayPal. The PayPal transaction process enables
shoppers to send money to sellers virtually without involving credit or debit card numbers and
personal checking. PayPal is seamless and widely accepted as a genuine transacting platform
when trading online. PayPal works with e-bay in the following process; a buyer makes a
purchase from a merchant that accepts PayPal as a transaction method (Kirk, 2014). The winning
bidder then checks out through PayPal on the items list. The bidder who must own a PayPal
account then clicks on the “Pay Now” button. The money will then be transferred automatically.
The winning buyer checks out through PayPal automatically leading to a transaction of funds

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from their bank account into the PayPal account. The seller will then receive the funds which
they can send to their bank account.
Discussion
Despite the security concerns surrounding e-bay, the platform continues to lead in the e-
commerce market. With the growth of internet connectivity in most regions globally, eBay's
revenue looks to keep on growing. E-bay’s move to implementing custom made hardware
infrastructure will be a big boost to the website’s performance. The Company will now run its
own servers, minimizing their dependencies on external vendors. To improve the security of its
website, the Company needs to invite white party hackers to test its system. E-bay needs to
emulate other tech giants such as Google and Facebook and pay ethical hackers for vulnerability
testing.
Individual Contribution
This report was prepared through efforts of a four member group. To ensure it was thoroughly
and well prepared, the members had to collaborate synchronously every time. Each member was
assigned a specific task to accomplish, which was finally compiled. Member one’s role was to
conduct a research on the company e-bay including background information as well as financial
reports and develop the organization interview. Member two’s role on the other hand was to
research and write on the company’s business model. Member three went through the e-bay
website platform as well as other sources to find out about its content, hardware infrastructure,
security issues, and software as well as transaction process. Member four’s role was to compile

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the content from the other group members as well as create the discussion of the report. The
slides were created in the presence of all group members allowing each person to contribute on
the project.

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References
Frooition.com . (2016). eBay Listing Software. Retrieved from Frooition:
https://www.frooition.com/ebay-listing-tool.html
eSellerHub. (2017, October 14). Top features ebay inventory management software. Retrieved
from E-seller hub: https://www.esellerhub.com/blog/top-features-ebay-inventory-
management-software/
Go, R. (2018, September 10). The 8 best eBay listing software and tools. Retrieved from
Deliverr: https://deliverr.com/blog/ebay-listing-software/
Kirk, J. (2014, MAY , 27). New security problems keep eBay on edge. Retrieved from PCWorld:
https://www.pcworld.com/article/2198060/new-security-problems-keep-ebay-on-
edge.html
Papaioannou, E. A. (2013). Investigating customer satisfaction dimensions with the service
quality of online auctions: an empirical investigation of e-Bay. Information systems and
e-business Management, 313-330.
Prince, D. (2016, April 08). 7 Security reasons why you should avoid e-bay. Retrieved from
Make Use of: https://www.makeuseof.com/tag/x-security-reasons-avoid-ebay/

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Appendix
An image showing the webpage of the e-bay website