Lei Shi

ITS 380

Chapter 11

Case Study


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

Advertising Revenue Model: Incur fees on investments

Transaction Revenue Model: High listing cost, Low sales commission


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

The largest threat to eBay is the honesty and integrity of its auctions, over which it has some – but not total – control. As eBay ventured into the realm of higher-priced antiques and collectibles, it opened itself up to lawsuits from buyers claiming to have been defrauded by online sellers. Some buyers have alleged that eBay does not do enough to prevent unscrupulous sellers from collecting inflated fees for goods that are not legitimate, or worse, do not exist.


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’s market strategies are adapting in order to accommodate the frequent changes in the evolving technologies and internet users.

The company has created an identity crisis and had a new focus on the secondary attracted the interest of bulk seller.

Tweaked search ordering algorithm favours power sellers


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

Top three competitors:



Ebid and/or craigslist

eBay’s strategy gives the company as advantage to compete because of the following:

The variety of products/services offered

eBay Community

eBay website

eBay’s brand name




1. What is an online social network?


            Social networking is the practice of expanding the number of one's business and/or social contacts by making connections through individuals, often through social media sites such as Facebook, Twitter, LinkedIn and Google+.


5.      What is “network fatigue” and what impact may it have on social networks?

      “Network fatigue” is caused by spending too much time keeping up with their close and distant friends on many social networks. Fatigue grows as users increase the number of social networks to which they belong. One result is avoiding Facebook (and other sites) or spending less and less time on the sites. A Pew survey found 42% of young users are spending less time on Facebook, in large part because they are bored. Over 60% of users said they had dropped using Facebook at one time or another; 20% of online adults used the site once, but no longer use it.


10. Why is assessing the number of active users of social networks so difficult?

            Social network user numbers are notoriously inaccurate when assessing what exactly is an “active user.” Both Facebook and Google+ have integrated their various services, forcing users to be “active” even if they did not intend to be active. Both networks routinely cause people to share personal information even if they did not intend to.


15. Why are mobile social networks growing so fast?

Mobile social networks are growing so fast due to the rapid adoption and intense use of mobile devices.



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

            Yahoo has struggled in the last three years to grow revenues and earnings despite the fact that its unique visitor count has held steady with Google’s. One part of the problem is the 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 of time spent on the site.




3.         Visit one for-profit and one non-profit sponsored social network. Create a presentation to describe and demonstrate the offering at each site. What organizational objectives is each pursuing? How is the for-profit company using community building technologies as a customer relations management tool?

The Campbell Soup Company has a sponsored community site at Campbellsoup.com that offers links to the Campbell’s Kitchen recipes site. The Campbellsnutrition.com site offers articles on nutrition basics, fitness and exercise, simple steps to eating smart, lifestyle changes, and making them work. Its objective is to promote the inclusion of Campbell’s soups in a healthy diet. Visitors can participate in a searchable recipes exchange, create their own personal recipe box, and sign up for Campbell’s meal mail so that Campbell’s recipes or offers can be sent to them via e-mail. Visitors are also invited to build a user profile that will help the company to tailor information for customers needs and of course, help them to build a customer database. A daily menu plan index has been set up to give users recipes for all three meals of the day including snacks that meet the daily recommended guidelines for fat, saturated fat, protein, carbohydrates, and sodium. The obvious goals are to extend brand influence and loyalty and to increase offline product sales. In addition to the recipes exchange, other community building technologies that are being used as customer relations management tools on the site are relating company news and product information including a complete listing and product information on all Campbell’s brands (Pepperidge Farms, V8, Pace, Prego, etc.).