Adrian Leal

ITS 380


Chapter 11


Case Study


1.      Contrast eBay’s original business model with its current business model.

eBay’s original business model was focused on auctions, transactions fees, and advertising fees. Even though eBay’s strategy has changed, they revenue still coming from transactions fees, and advertising fees, but now their products are being sold at a fixed cost.


2.      What are the problems that eBay is currently facing? How is eBay trying to solve these problems?

eBay is facing numerous problems

·         Competitors. Many other sites provide a similar service, so their market share has been reduced

·         Fraud. Numerous cases of fraudulent buyers

·         Laws and regulations. Some countries have very explicit regulations that have caused some problems to eBay in the past.


In order to solve some of these problems, eBay has adopted some measures that make their transactions safer in order to reduce the number of fraudulent transactions.


3.      Are the solutions eBay is seeking to implement good solutions? Why or why not? Are there another solutions that eBay should consider?

Yes, they are. eBay has recognized that something was not working as expected, so they started to develop a new strategy. They have been trying to adapt to the new market needs and new technologies.


Other solutions that they should consider can include what other competitors are doing and works. For example: pickup delivery, membership/premium service, fast delivery, etc.


4.      Who are eBay’s top three competitors online, and how will eBay’s strategy help it compete? Will eBay be providing a differentiated service to customers?

eBay’s top three competitors are Amazon, Google, and Craiglist. eBay’s strategy can help it to compete if they know how to take profit of the brand name and its global reach. At the moment, eBay is not providing a differentiated service, but it will be crucial for the company’s future that they find a way to differentiate eBay from its competitors.





1.      What do social networks, auction, and portals have in common?

What these three things have in common is that they reach a great number of people that are connected online, and these individuals can, somehow, interact with each other.


5.      Why are mobile social networks growing so fast?

The mobile industry is increasing really fast. The main reason is because of its convenience, facility, and security that transmit to the customers. It is an easy way to interact with other individuals, clients, or businesses.


10. How does a Name Your Own Price auction, such as Priceline’s, work?

The buyer propose a price to the seller, if the seller accepts the price suggested by the buyer, the transaction will take place. It works completely different to the traditional way of selling things, in which the seller is the one that determines the price or the product.


15. Name and describe five types of possible abuses and frauds that may occur with auction.

·         Shill Feedback: Using fake accounts to rate products either positively or negatively.

·         Dead/Invalid e-mail addresses: Providing false contact information.

·         Sending spam: Sending unsolicited offers to bidders.

·         Transaction nonperformance: Accepting payment and failing to deliver.

·         Bid manipulation: Using the retraction option to make high bids, discovering the maximum bid of current high bidder, then retracting bid.


20. Why has Yahoo struggled in the last three years?

Yahoo’s competitors are too strong and that is why they have been struggling to compete in search, social media, and video. Its revenues and market share have been decreasing dramatically, and in 2015 Yahoo had a $4.4 billion loss.




1.      Visit one of the social networks listed in Table11.1 and compare it to Facebook. In what ways is it similar to Facebook, and in what ways is it different? Which do you prefer, and why?

Facebook and Instagram.



-          Both social networks have a feed

-          Both social networks have “friend options”

-          Both social networks have search, direct message, and “like” feature

-          Both social networks allow the user to share photos and videos

-          Both include private profile options



-          Instagram only allows you to post something if you are including a picture; it is not possible to post a text message

-          Instagram calls friends followers, and someone can follow you without the necessity of following them back

-          Instagram does not have the option “share”

-          Instagram is mostly used on mobile devices and it is limited when using it on computer devices.

-          Facebook has way more activity than Instagram.