Social Networks, Auctions, And Portals

Case Study

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

eBay’s business model was originally just an online auction Web site.  It was where small sellers could sell unwanted goods.  It later involved more professional type of sellers who bought goods to sell on eBay.

Their current model is on an “easier and simpler methods of buying fixed-priced goods from retailers such as Amazon.”


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

The main problem ebay is currently facing is failing to increase their business revenue model. They moved eBay “away from its origins as an online flea market” and stared “partnering with retail chains to simply serve as another channel for current merchandise.” It still remains a trusted online brand and they are still working to improve its market offerings.


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

EBay is attempting to keep up with competitors like Amazon.  It’s a solution that better fits the habits of online shoppers who do not want to wait or bid on goods and would rather buy the item immediately.   The other solutions is that eBay could present both auction and retail for their customers to choose.


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 has more than their fair share of competitors online.  The competitors could be in either auction or general retail market like is Amazon, Walmart, uBid and Costco. EBay does not seem to provide a differentiated service but they provide both auction and non-action service to customers.  Ebay does dominate the online auction market.


Chapter Questions

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

Social networks, auctions, and portals all involve a group of people who share an area for interaction or interest.  These services are all responsible for attracting a large audience.


5.  Why are mobile social networks growing so fast?

The reason mobile social networks are growing fast because of their “focuses on messaging, either sending of text or photos.”  These sites let users send text, photos, and videos using cellphones and sometimes to other cellphones using the Internet.  “About 82% of Facebook’s users are mobile users although not exclusively.  Several of the largest newer social networks like Instagram, Snapchat, and Vine are almost entirely mobile.”


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

The customers of Priceline are able to state what they are willing to pay for the goods or services they want and are also able to multiple providers bid for their business.  Prices do not descend and are fixed: the initial consumer offer is a commitment to purchase at that price.


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

1.    Bid rigging:  Agreeing offline to limit bids or using shills to submit false bids that drive prices up.

2.    Price matching:  Agreeing informally or formally to set floor prices on action items below which sellers will not sell in open markets.

3.    Shill feedback, defensive:  Using secondary IDs or other auction members to inflate seller ratings.

4.    Shill feedback, offensive:  Using secondary IDs or other auction members to delate ratings for another user (feedback bombs).

5.    Feedback extortion:  Threatening negative feedback in return for a benefit.


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

“One part of the problem is falling price of display ads, which are the mainstay of Yahoo’s ad platform.  Another key issue is declining user engagement with materials on the site and the amount time spent on the site . . . The key to display ad revenue is content and engagement: the more you can show users, the longer they stay on your site, the more ad revenue can be generated.  So far, Yahoo and the other general portal sites have not been able to compete with social network sites on these dimensions of engagement and time on site.”


Project Question

1.     Imagine you are the owner of an e-commerce Web site. What are some of the signs that your site has been hacked? Discuss the major types of attacks you could expect to experience and the resulting damage to your site.

a.     Some of the signs that your e-commerce site is being hacked, attacked, or compromised are distributed denial of service attacks, fraudulent orders and transactions, and orders placed with stolen user information. The damages could include but not limited to loss of business, customers losing faith in your organization, and going out of business as a result of the attacks.