CH11

p. 755

1.       The original business model for eBay concentrated on a “flea market” system where a fee for service was applied to sales auction transactions, mainly by individuals. Now, the model still includes private sellers of used goods, but now focuses also on including mainstream retailers selling out-of-date and especially new merchandise in a fixed-price system. Also, the site search engine has been optimized with analytical tools beyond simply matching search terms.

 

2.       The biggest problem eBay is currently facing is the perception of the company without PayPal. PayPal accounted for almost half of eBay’s revenue until it was spun-off, and was seen as keeping eBay afloat. The company must perform in the black in the future without PayPal or investor confidence will be shaken and the company will run into trouble. So far, the company has shown solid growth to counter this concern quarter over quarter. The firm faces stiff competition from giants like Amazon and Walmart (not mentioned in the article) that now offer used (most oftentimes referred to as “refurbished”) merchandise (especially electronics), in addition to their traditional new products listed. It is not obvious that eBay has a specific remedy to counter this other than their recent retooling to also include such vendors, in other words, to match their efforts at such offerings.

 

3.       One solution that eBay implemented that was a good one was optimizing their search engine with analytics. As of today, as compared to Amazon’s, Amazon’s search engine needs further optimizing. EBay’s will return a positive search result for a given item without excluding items, while Amazon’s can have some trouble retrieving some items in their inventory, even when the correct narrative description is used. This requires the savvy user to do multiple searches to find the same “hidden” item that is sought after. This is the case when you don’t get a direct “hit” for an item but you know it’s there somewhere; very annoying! This is problematic and it’s surprising that this is the case with Amazon; advantage eBay. This will probably be remedied by Amazon eventually. Another solution eBay should implement is getting their hit count percentage back up for search results in Google’s search engine. Adding the term “for sale” gets one similar results to what one used to find in Google before they changed their ranking structure. EBay would be wise to convince Google to include some “shopping” category results to also turn up higher in an “all” categories search than they would otherwise.

 

4.       EBay’s top competitors online are subjective. If you just want retailers, then the list will be skewed to not include a list that features sites where a regular Joe can sell something online. I will make one concession and include Amazon with reservations. The competition in order is Amazon, Etsy, Bonanza, and Craigslist. EBay’s strategy to help it compete is the reshaping of its pricing model, and a willingness to intervene with posting discrepancies (unlike Craigslist, for example); this means a higher revenue.

p. 757-758

1.       Two examples of an affinity portal are: The Veteran’s Information Portal at the Department of Veterans Affairs, and the VA Veterans Information Portal at the National Resource Directory. These should both be affinity portals because they both identify with people by their identity as veterans, their attitudes, and their values and beliefs.

 

Two examples of focused-content portals are the Statistics Portal on statista, and the University of Wisconsin, Superior (UWS) homepage. These are both focused portals because they can provide in-depth information on a particular topic to a broad range of viewers.

 

The Veteran’s Information Portal has a myriad of information and services. One can access announcements, featured items, specific categories of veteran benefits, special programs, and search via a search engine, or by selecting a form of frequently asked questions called “How Can I…”

 

The VA Veterans Information Portal has mainly information regarding housing, grants, VA guaranteed home loans, caregiver resources directory, and related resources. It also includes social network links.

 

These two portals are government sites and rely on a fixed budget revenue model, as do nearly all government entities. I did not see any way to determine how many members or visitors the site has attracted.

 

The Statistics Portal offers statistics database and report information regarding consumer markets, digital markets, global survey, and infographics for any number of topics; it features a prominent general site search engine to assist in navigation.

 

The UWS homepage (which we are all familiar with) offers information broadly on admissions, academics, campus life, and athletics, and features a search engine and an extensive site map.

 

The Statistics Portal operates on a freemium revenue model, while UWS is, again, a fixed-budget government revenue model.

 

I did not see any way to determine how many members or visitors these sites have attracted.

 

2.       I visited eBay. I did not see a way to view outlet auctions as a start point. I looked on Amazon as well. It wasn’t possible there either. In both cases, one must look up an item to buy with the search engine and then explore the results to determine which suppliers are C2C, and which are B2C. The stage of product life cycle these products are in is a mix. Some are new, while others are reconditioned/refurbished, and yet others are simply used. I saw some quantity requirements. This took multiple searches to produce such results. Some very small and/or inexpensive products come only in multiples (such as 10, 100, or even 1000). This was not exclusive; some reconditioned office equipment (mainly computers) came in some multiples of no particular pattern. Most low opening bids for computers (PCs) was around $90. Usual bid increments were in $1, $2, or $3. The duration of most offerings was up to about 10 days, with a large portion occurring over a five day duration.

Firms use this auction method mainly to divest themselves of obsolete or replaced equipment inventory. This method accomplishes two goals. It gets rid of the items in a relatively short period of time, and it achieves a market-driven value determined by supply and demand. Some results might not be optimum, but over the long run of repeated divestitures in such a manner a goodly amount of smoothing of value achieved is realized. Without this method firms may sit on equipment for an undetermined amount of time, thus incurring unnecessary holding costs. This saves money. Also, they do not have to research and/or guess at what the value of equipment is that they want to shed.