ENSN201: eBay Business Model, Website, and Security Analysis

This report provides an in-depth analysis of eBay, an American multinational e-commerce company. It examines eBay's business model, tracing its evolution from AuctionWeb to its current form, including its revenue model and how it leverages the World Wide Web. The report delves into the specifics of the eBay website, exploring its content structure tailored for both buyers and sellers, and its hardware and software infrastructure. It also addresses crucial aspects such as security issues, including data breaches and the lack of encryption, and the payment/transaction processes, focusing on the role of PayPal. The report concludes with recommendations for improvement and offers insights into the company's operations and potential growth strategies.

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Name of the Student
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Author Note

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Executive Summary
In this report, the aim of the discussion will be to discuss the online business of eBay, am
American multinational company, along with the business model followed by the company.
The website details, along with the content of the website, the hardware and software model,
and the issues related to security as well as payment or transactional processes will be
discussed here.

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Table of Contents
Introduction................................................................................................................................3
Organization Overview..............................................................................................................3
Business Model..........................................................................................................................4
Website.......................................................................................................................................5
Website Content.....................................................................................................................5
Hardware Infrastructure.........................................................................................................5
Software.................................................................................................................................6
Security Issues........................................................................................................................7
Payments/Transactions Process.............................................................................................7
Recommendations......................................................................................................................7
Conclusions................................................................................................................................7

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Introduction
In this report, the aim of the discussion will be to discuss about eBay, the business
model of the company along with the business model that follows. The details of the website
of eBay will also be discussed, like the contents of the website, the hardware infrastructure,
software, security issues as well as the payments or transactions process. The entire
operations will be discussed in this report. This will help to learn more about the operations
of the e-commerce website and if something is needed to make the website more attractive to
the people globally, so that it will help the company to grow its business (Collis 2016).
Organization Overview
eBay is a multinational company based in America. It is a public limited company.
The company was founded in 3rd of September, 1995 and headquartered in San Jose,
California. Pierre Omidyar was the founder of the company. The company s specialized in
the online shopping globally. It involves both consumer-to-consumer and business-to-
consumer sales through the website of the company. The company has its business operations
in more than 30 countries, and the number of employees is more than 14,100. The website is
used as an online auction as well as shopping platform, where the buyers and sellers meet a
wide range of goods and services globally. Thomas J. Tierney is the Chairman of the
company and Devin Wenig is the is the Chief Executive Director (Ambrus, Ishii and Burns
2013). The buyers can use the website for free, whereas the sellers have to pay a certain buck
for listing their items on the website after a specified number of free listings, and also after
those items are sold. The revenue earned by the company is about US$11 billion. The website
has developed and broadened to include instant “Buy It Now”, apart from the auction-style
features of sales. The company was founded as The AuctionWeb. They changed their name
to eBay in September 1997. It is a visible marketplace which can be viewed by the public,

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and has attracted interest from the economists as well, who has used the website to evaluate
the buying and selling behavior of the people around the world (Kimble and Bourdon 2013).
Business Model
eBay can be termed as the creation of one computer programmer who was searching
for a way or two to make something huge on the internet platform. In the beginning, when the
company was known with the name of AuctionWeb, they only sold collectibles. When the
founder of the organization Pierre Omidyar met Jeff Skoll, an MBA graduate, the website
began to improve and started more people towards the website (Taran et al 2015). Jeff Skoll
became the first President of the company, and combined the business skills of his own and
the programming experience of Pierre Omidyar. They became business partners and the first
business plan was written by Jeff Skoll, which called eBay Inc. The organization began to
charge money for the sales which became successful, which did not include the listing
auction sales. The organization took the full advantage of the flourishing popularity of the
World Wide Web. The rules were set to provide a safe and clean to do business, where
people would meet and trade between themselves. The buyers and the sellers were allowed to
run the transactions by their own and the more active sellers would be provided the
opportunity to build permanent stores on the website. Moneylenders and the bas would
support the financial part. The organization was successful by providing a trading platform
where the buyers as well as sellers would perform the tasks by taking the help of World Wide
Web (Taran et al 2016). It helped to organize the items by topic and by category and built a
search system where the prospective bidders could view the entire catalogue in an automated
way. There was a system set to collect the fees. The sellers are charged insertion fees,
promotional fees and final value fee. After the system was ready where bids could be placed,
the items could be put up for sale, the completion of the transactions could be completed, the
fees for the seller would be charged, and feedback could be left. After it was launched, eBay

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quickly deviated out from primarily auctioning collectibles and slowly moved into a bunch of
upscale markets where the average sales price (ASP) is higher. ASP is a major metric which
helps to determine the transaction fees of the company. Thus, to increase the ASP has
become a major part of the organization to earn revenue (Boons et al 2013).
Figure 1: Business Model Diagram Model of eBay
Source: Created by the Author
Website
Website Content
The contents in the website of eBay are structured from the point of views from both
the buyers and sellers. It is built to provide people globally to conduct transactions. Since the
launch of the fresh personalized homepage, eBay is successful to fully specific to the

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particular one who is using the website, not only in terms of items, but also on the way these
items are displayed and the process of interaction between the users with the page. The latest
updates to the homepage has brought a range of accessibility improvements in terms of
designing, which actually helped it easier for the people with or without disabilities and helps
to create a more convenience for the users as a whole. Users are able to control or check the
content in the homepage carousel of the company by taking the help of the pause and play
control in place of using a carousel that moves on by own. This brand new characteristic will
help the people who are having cognitive disabilities, who could be distracted by using the
automatic movement of the carousel. With the implementation of this characteristic, those
people can have a better trading experience and will help to navigate the website more
efficiently and effectively (Mohapatra 2013).
Hardware Infrastructure
The hardware infrastructure is also structured in such a way that the people can have a
good user experience after using the overall system as well as the infrastructure. The new
homepage of eBay is accessible to keyboards, which will help the users to navigate without
taking the help of a mouse. The people, after the introduction of these feature will help the
users to have a limited or no use of their hands can take the help of the standard keyboard.
This will help to improve the convenience for the users with screen readers as most of these
users browse through the website of eBay with taking the help of the keyboard. The users
who just want to skip the switch between the mouse and the keyboard, this update will allow
them to personalize their browsing experience or selling or buying experience. There are
some updates to the structure of the homepage which will improve the browsing experience
with the help of a screen reader. This kind of setup will allow the users who are visually
impaired and relies in screen readers to bring up a list of headings quickly and find a section
of interest. Just like the sighted users who can scan through the content page quickly to find

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what they are looking for. This developed heading structure can be found throughout the
eBay.com site (Chircu and Kauffman 2013).
Software
eBay uses a range of Application Programming Interface or API, which is a set of
communication protocols, subroutine definitions and tools for building the software. The
organization uses buying application programming interfaces, selling application
programming interfaces, commerce application programming interfaces and developer
application programming interfaces. The APIs used for buying the items through the website
can either push the global traffic to the website by using the traditional affiliate model, or
referring the transactions without the customers who are continuously using the website
(Evans and Basole 2016). The experience should be created in such a manner that can
seamlessly mix and merge the eBay shopping into social sites like, DIY blogs, as well as
specialized digital magazines and forums, or by creating websites and applications that will
bring eBay inventory into fresh geographical markets or into other shopping experiences. The
latest APIs are designed in such a way that helps the social sites, merchants and marketplaces
to increase the virtual inventory which they offer to the customers. The eBay manager
software helps to update the stock list to Seller Dynamics and the different eBay
marketplaces will be changed to the updated versions with the eBay listings, which will
include the level of stocks and the information regarding the prices.
Security Issues
There was a problem involving the policy which required the usage of PayPal for the
payment part and concerns regarding fraud, forgeries and intellectual property violations in
case of auctioning the items. On May 21, 2014, the organization disclosed that the personal
database of the consumers, which included usernames, passwords, contact details, and the

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address details, had been breached, in between the time frame of late February and early
March. The company urged the users to change their passwords, and a “change password”
feature was added to the profile of the users, who had not changed their password till that
date (Haque, Wright and Scielzo 2013). This has caused in decreasing the share price of
eBay. Another exposure was discovered in the Japanese marketplace of eBay. There was also
lack of encryption over the database security of the company. The questions were raised from
all over the world about the lack of encryption of the data of the company. There was also
lack of concerns about hacking of the personal websites of the users. All these actually
hampered the brand image of the company, and also resulted in losing the user database of
the company as well failing to attract new people towards the website.
Payments/Transactions Process
The company eBay has a whole lot of items to sale globally. But there is only one
payment system and that is to pay through PayPal. This mode of payment system helps the
buyers to send their money to the sellers practically, without involving the method of
personal checking of the debit as well as credit card numbers. PayPal is safe as a payment
method, and is hugely accepted and also seamless when the option of payment comes in case
of online transactions. It is easy to transfer the money from the bank account of an individual
to the PayPal account of that person, and there are several options to recharge the account so
that online transactions can be done at ease. It is an easy and fast method to purchase things
on online portal of eBay. It is widely accepted as a payment method of many shopping
websites as well apart from eBay. It is also flexible for the sellers, as even a very small
volume of sellers can easily and swiftly accept the payments made by the buyers. It is also a
payment method with speed and affordability of it, as the fee for using the PayPal is 30 cents
per transaction, with an addition of 3% of the total amount of the transaction made between

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the buyers and sellers. PayPal helps to enable commerce on worldwide basis (Hasan, Rennie
and Hasan 2013).
Recommendations
The major and primary recommendation for eBay will be to maintain the account
privacy as well as safeguard the data and information related to personal information of the
users. Already there was a data breach which the company has faced on 21st May of 2014.
Same thing should not be faced by the company anymore. eBay must also be proactive on
responding to the concerns raised by the users as well as the buyers and sellers around the
world. Prompt customer service is a crucial aspect in terms of the reputation of the company,
and it can be an asset of the company which can be capitalized for years to come by the
company. The data should be encrypted properly and fully so that the process of hacking can
be avoided or minimized (Zott and Amit 2017).
Conclusions
From the above report, it can be concluded that the strategic planning of eBay has
made this company a safe trading place on the internet, and also to build relationships and
reputations between the sellers and the buyers. It helps to change the livelihood of the people.
If the recommendations can be met by the organization, it will help eBay to flourish more and
will also help the organization to have a competitive edge over the others in this highly
competitive market.

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Reference
Ambrus, A., Ishii, Y. and Burns, J., 2013. Gradual bidding in ebay-like auctions. Economic
Research Initiatives at Duke (ERID) Working Paper, (129).
Boons, F., Montalvo, C., Quist, J. and Wagner, M., 2013. Sustainable innovation, business
models and economic performance: an overview. Journal of Cleaner Production, 45, pp.1-8.
Chircu, A.N. and Kauffman, R.J., 2013. Digital intermediation in electronic commerce: The
eBay model. In E-commerce and V-Business (pp. 63-84). Routledge.
Collis, D., 2016. Lean strategy. Harvard Business Review, 94(3), pp.62-68.
Evans, P.C. and Basole, R.C., 2016. Revealing the API ecosystem and enterprise strategy via
visual analytics. Communications of the ACM, 59(2), pp.26-28.
Haque, S.M., Wright, M. and Scielzo, S., 2013, February. A study of user password strategy
for multiple accounts. In Proceedings of the third ACM conference on Data and application
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Hasan, S., Rennie, A. and Hasan, J., 2013. The business model for the functional rapid
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Kimble, C. and Bourdon, I., 2013. The link among information technology, business models,
and strategic breakthroughs: Examples from Amazon, Dell, and eBay. Global Business and
Organizational Excellence, 33(1), pp.58-68.
Mohapatra, S., 2013. E-commerce Strategy. In E-Commerce Strategy (pp. 155-171).
Springer, Boston, MA.

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Taran, Y., Nielsen, C., Montemari, M., Thomsen, P. and Paolone, F., 2016. Business model
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Zott, C. and Amit, R., 2017. Business model innovation: How to create value in a digital
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Appendix
Figure 1: Business Model Diagram of eBay