Louis Gouge

ITS 380

Chapter 11

Case Study Questions

1. Originally eBay was only an online auction web site where people could sell their unwanted items. The item would be available for a specified amount of time and whomever placed the highest bid before time expired purchased the item. Ebay charged a fee to the seller of the item and that was its primary source of revenue.

Now eBay has become more of an online retailer like other online stores and customers can purchase just about anything.

2. eBay is facing the same problems all other online retail shopping sites and that is to get as many customers and returning customers to use eBay exclusively. eBay is competing against stores like Amazon which is very large and has a very low markup of their items because they sell such a large volume. Some people still view eBay as just an online swap meet instead of a player in the online marketplace.

3. Since eBay started off as an online marketplace mainly focused on C2C it is difficult to change people's perception of eBay. eBay is attempting to stay with their roots as an auction service but they must evolve to keep up with other online businesses if they are to survive. Ensuring the online auction service is functioning is a way to keep their overhead low. This is done by not having to be physically involved in the selling and buying process.

4. eBay has many online competitors in the retail business, but there are not too many for the auction service. Some of their competitors are: Amazon, Walmart.com, Costco. It is very difficult to determine which are the top three competitors due to eBay attempting to change their business strategy by becoming an online retail store as well as an auction service.


1. All are accessed by utilizing the internet and these are all used by people who share common interests and have a need to stay informed.

5. They are growing fast because people possess an electronic device such as a cellular phone or tablet and can gain access practically anywhere if they have an online signal. People can send texts, photos, videos, and post anything to their online social media sites.

10. If the customer wants to name their own price for a service such as a hotel or airline ticket all they must do is send a price and it will either get accepted or rejected. Most times such as a hotel, the business would rather make a little profit for a room that was otherwise empty instead of receiving nothing at all. I have used it this service and I have been granted some pretty great deals on an expensive hotel.

15. Bid rigging; making a deal offline by contacting the buyer directly instead of using the online auction service, or having a false account that bids on the item every time a normal bid is made.

Feedback extortion; threats made when a customer leaves bad feedback until a certain agreement is made by the seller.

Proxy bidding; using a software program to automatically make a bid whenever a legitimate bid is made by another buyer.

Watching or (watch lists); waiting until the very last moment to bid on an item just enough to ensure the buyer wins the auction.

20. Yahoo like other sites generate revenue from selling advertising on their website. Since social media sites are being used more and more by people the time spent on other sites such as Yahoo has declined. When this happens, Yahoo is unable to charge the same rates as before and advertisers have started to look other places to spend their advertising dollars.


4. I chose LinkedIn to compare to Facebook because I have used both in the past.

LinkedIn is similar because:

1)     Let's you stay connected to other users, friends, and colleagues

2)     Can put photos on your site

3)     Can locate old friends or businesses you have used or met with in the past

4)     Can approve or agree with other people's pages

5)     Connect to other groups with similar interests or jobs

LinkedIn is different:

1)     Most of the people on this site are professionals or acquaintances met at business meetings or conferences

2)     Jobs can be posted within these groups

3)     Can post your resume on your page

4)     Can search for jobs on the site

5)     If you know the person you can approve of the accomplishments or abilities of what that person has done or is capable of doing