Category: Ebay

Introduction

E-bay can be defined as a worldwide online market place where both sellers and buyers trade almost all types of goods and services. It is an auction website, started by Pierre Omidya in the year 1995. Recent statistics show that eBay holds ninety-six million users and two hundred and thirty-three customers. A seller lists his available items on eBay at a specified price. He only accepts bids for the items the same way auction takes place. He can also choose to offer the item on the Buy It Now option. This is where buyers buy the item at the stated, fixed price. When it comes to auction, bidding opens at a specified price by the seller. This price remains for a few days. At this time, buyers are allowed to place bids. Finally, the listing ends, and the buyer with the highest bid buys the item. Intermediaries include organizations such as banks. Banks process payments, electronic receipts, and payment of bills possible. Banks also provide electronic money services such as electronic banking. Other involved parties are guarantors who guarantee transactions. eBay comprises several components, which include the government, investors, suppliers, intermediaries, employees, and customers (Cohen, 2003).

E-Bay internal organization

Several organization functions take place in the eBay system. Sales and marketing is a significant activity that takes place within eBay. This happens online because everything regarding buying and selling takes place online. The seller will advertise his product on the internet, at a cost, which is relatively low. This enables the buyers to reach several people, potential buyers, who use the internet. Other internal organization functions include engineering, operations, among others. Several firms sell their products on eBay. One can get almost everything at eBay. It is the largest online market place across the world. The organization applies supply chain management. In this case, it uses Information Technology development. It must, therefore, work hand in hand with IT firms. This helps reduce transportation costs and freight charges. The other supply chain is that of manufacturers, distributors, dealers, service providers, among others, who facilitate e-business. The internet helps save on telephone, transport, and warehousing costs (Miller, 2008).

Customers at eBay get a chance to customize their shopping in that they can purchase products of different attributes, going up to fifteen categories. The system contains trust providers. These are third parties who verify the sellers on eBay. This helps meet the required standards, both environmental and ethical. eBay also has a labeling system responsible for putting nutritional labels on the products. Customers can, therefore, identify the product easily, and can also know the products environmental effects. They can assess whether the item meets their expectations. This market place helps bring people, products, and organizations together. In addition to that, dialogue on the products becomes facilitated between people, trust providers, and organizations through blogs, articles, and forums (Adams, 2006).

Possible technologies

The software helps facilitate e-commerce. These include software for interactive TV, multimedia content, video on demand, internet information retrieval, webcasting development, among others. Operating system software and Administrative Support Software include also necessary software in eBay. eBay also maintains an intranet to facilitate communication with employees. This leads to greater productivity in eBay. Important tools to agents, buyers, and consumers also are maintained. Intranets use the Web based interface; hence, they are different from internal emails.

Extranets exist as well in eBay. These help people outside the organization to access the organizations information by use of systems protocol called TCP/ IP. The information is, however, protected because only legitimate users can access it by use of passwords. Selected customers only can access the organizations specialized data. These customers can also access the organizations intranet to obtain product specifications. The internet plays a crucial role to facilitate information transmission. Security systems must be provided to ensure that only legitimate users access the organizations information (Schepp & Schepp, 2004).

Recently, eBay started using web 2.0 applications by announcing eBay Wiki by Jot Spot as the host. It is intended to enable members to offer expert information on eBay topics. This also intended to help people, the public, to get answers to questions they frequently ask about eBay. Members also create eBay Blogs, which help business people promote their businesses. The organization also uses leased lines. These are business internet connections, which are reliable due to their high speed, and have different speeds ranging from 256kbps to 1Gbps (Spencer, 2006).

Payment and privacy systems

People use PayPal to shop online at eBay. PayPal can be found almost everywhere, and this method of payment grows steadily. This payment method does not require an individual to have a computer next to him to make the payment. Mobile phones can also be used at eBay and this method is fast in making and receiving payment. PayPal is secure since an individuals financial details are not shared through the internet. It safeguards details regarding a clients bank, debit, or credit card. Detailed references can be found online to help one manage his PayPal account. One can as well change the password if he wishes to change (Botha, 2004).

According to Shipman, eBay follows privacy by Design principles. These principles advocate for openness, privacy, user-centric, and avoiding risk to prevent a breach from occurring. Pal Pay provides more privacy than credit cards. PayPal merchants do not receive buyers full details. Instead, they receive the username only, which solely cannot be used fraudulently. eBay auction site monitors browsing history, user behavior, sales, failed bids, and purchases. It, however, promises that it will not share personal information with other parties. This information helps eBay to advise merchants on products demand and their prices across the world to assist them in making informed decisions. It also helps to make customized advertisements. Information regarding peoples behavior helps in detecting illegal activities that could be going on at eBay. Such activities could include, among others, fraud and money laundering. This happens the same way banks monitor clients bank accounts. eBay ensures trust between buyers and sellers by obtaining this information (Kalakota & Robinson, 2001).

Benefits of the e-business system

E-business helps individuals to sell and purchase items without facing time or distance barriers. People do not travel long distances to sell or acquire an item. A person needs to log in to the internet at whichever time, whether during the day or at night. This is a significant benefit because it enables people to save time, which could be spent traveling to other countries to acquire something or to sell something. In todays modern world, we all know that a person cannot recover a wasted second. Time-saving is, therefore, an important benefit, which cannot be overlooked. Another benefit includes the lowered cost of sale because there is no human interaction. Again buying on the internet eliminates errors and is faster. The method is also convenient for the buyer. E-business becomes beneficial when dealing with niche products, which have few customers (Papazoglou & Ribbers, 2006).

When such products are traded over the internet, the market widens, and more volumes could be sold rather than if e-commerce did not exist. E-business is a cheap means of transacting business activities. Several costs get eliminated such as transport costs to reach a product. By the end of it all, an individual spends less money than transacting using other means. E-business offers an opportunity to purchase alternative products. E-commerce is also beneficial in that it helps reduce the time for delivery of products, costs regarding documentation, error correction, mail preparation, reconciliation, data entry, telephone calls, overtime, and supervision expenses. E-business also helps reduce personnel required to perform the transactions. It also reduces the strain on other resources. All the above benefits show us the power of e-business (Prince, 2003).

Possible e-business issues

Security and privacy issues

Doing business on the internet gives some privacy and security issues, different from carrying business elsewhere. It is, therefore, necessary to institute privacy and security measures in e-businesses. This would help ensure that customers have confidence in the business while shopping online. A businessperson, operating online, need to understand the intruders who may affect his business. Viruses are a key threat to e-commerce. They can come to somebodys computer, and they come from a variety of sources. Downloading information from the internet and opening affected emails can bring viruses into a computer. A business computer, affected by viruses, could send spam emails to customers. It can as well shut down the computer completely. Antivirus needs to be installed into a business computer so that the computer is prevented from virus attack. Antiviruses such as MacAfee and Nod32 exist, which offer protection to the computer? The antivirus must also be updated (Pugh, 2009).

Hackers and unauthorized users may end up accessing the personal information of customers. This information may include financial information, which can create problems including theft. Accessing personal information can be dangerous because a person can end up losing all his money to hackers and other thieves. Firewalls should be installed so that they do not access information on a business computer to block unauthorized users. Failing to install a firewall means anyone can access information on your computer, which could be risky. The firewall also needs to be updated regularly as it would further protect your computer. It would also be necessary to install an automatic firewall, which updates itself regularly. This ensures the protection of the computer throughout (Kidd, 2000).

Loss of business data may also occur as a result of virus attacks and another computer malfunctioning. Important data may end up getting lost, which could lead to losses in the business. To prevent data loss, the business owner should ensure that his computer has a backup protocol. The backup ensures that recent data and programs in the computer have a copy, which can be used, in case the original data gets lost. The backup, therefore, ensures that the computer does not suffer a loss due to virus infection. The back also helps to retrieve data in case theft or fire affects the business website (Turban, King, Lee & Liang, 2010).

E-business marketing issues

Research conducted by eBay revealed that consumer behavior could be determined by consumer demographics. Old people, who grew up in an era when computers did not exist, rarely use eBay. Younger people, who are familiar with computers, use eBay services since they have the opportunity to use computers. Familiarity with computers determines whether a person will use eBay services. Gender also affects consumer behavior in that females utilize e-business than males. Women believe that business is a social activity. Internet being a social site, they do online purchasing. Most eBay consumers are, therefore, women. Income also affects consumer behavior. Consumers with high income have chances of coming across the internet, and can, therefore, purchase and sell items online. Other factors affecting consumer behavior include family size and consumer attitude (Weber, 2008).

eBay practices market segmentation, targeting, and positioning. The organization first determines the customers who exist and their needs. The organization then decides the customers who are the best fit for a product, and finally, the segmentation strategy gets implemented. Channel conflict occurs at eBay when manufacturers disintermediate retailers, distributors, sales representatives, and dealers. In this case, they sell products directly to consumers. Channel conflict also occurs whenever there is overproduction, resulting in a product surplus. It becomes, therefore, necessary for the business organization to have a clearance strategy to avoid this problem. eBay operates in an environment where there are fewer barriers to entry because anyone can join the market provided he has the relevant requirements, usually a computer and the internet. This leads to perfect competition at eBay (Li, 2007).

Conclusion

A seller lists his available items on eBay at a specified price. He only accepts bids for the items the same way auction takes place. He can also choose to offer the item on the Buy It Now option. This is where buyers buy the item at the stated, fixed price. When it comes to auction, bidding opens at a specified price by the seller. This price remains for a few days. At this time, buyers are allowed to place bids. Finally, the listing ends, and the buyer with the highest bid buys the item.

References

Adams, A. C. (2006). The eBay Success Chronicles: Secrets and Techniques Ebay Powersellers Use Every Day to Make Millions. New York: Atlantic Publishing Company.

Botha, J. (2004). E-Commerce. New York: Juta and Company Ltd.

Cohen, A. (2003). The Perfect Store: Inside EBay. New York: Little, Brown and Company. Kalakota, R., & Robinson, M. (2001). E-business 2.0: roadmap for success. New York: Addison-Wesley Professional.

Kidd, P. T. (2000). E-business: key issues, applications and technologies. New York: IOS Press.

Li, F. (2007). What is e-business? How the Internet transforms organizations. New York: Wiley-Blackwell.

Miller, M. (2008). Absolute Beginners Guide to EBay. New York: Que Publishing, 2008.

Papazoglou, M., & Ribbers, P. (2006). E-business: organizational and technical foundations. New York: John Wiley.

Prince, D. L. (2003). How to sell anything on eBay and make a fortune. New York: McGraw-Hill Professional.

Pugh, R. (2009). The EBay Business Handbook: How Anyone Can Build a Business and Make Money on EBay. New York: Harriman House Limited.

Schepp, D., & Schepp, B. (2004). EBay Powerseller Secrets. New York: McGraw-Hill Professional.

Spencer, C. (2006). The Ebay Entrepreneur: The Definitive Guide to Starting Your Own Ebay Trading Assistant Business. London: Christopher Matthew Spencer..

Turban, E., King, D., Lee, J., & Liang, T.P. (2010). Electronic Commerce: A Managerial Perspective. New York: Pearson.

Weber, S. (2008). Selling on Ebay for Part-Time rr Full-Time Income, Beginner to Powerseller in 90 Days. New York: Stephen Weber.

Introduction

Meg Whitman exploited Kotters Eight Step Process for Creating Major Change to turn eBay into the company it is now. First, the new CEO created a sense of urgency. Whitman ran numerous meetings with the companys employees. She ensured the staff that the company was doing fine, but it was steadily evolving into something new. She explained that they were to help the company evolve into a huge and successful enterprise. Thus, she used the first step of Kotters process of change, i.e. she made employees understand that the change was vital.

Main Body

One of the examples of the use of Step 2 (i.e. forming the guiding coalition) is Whitmans desire to work with Omidyar. Whitman claimed that Omidyar knew the companies employees better than anyone else. She understood that Omidyar would be the leader who would lead the employees effectively. One more example of the use of this step is Whitmans decision to divide the employees into groups of professionals responsible for exact processes. They also hired high-profile marketing and legal professionals. Initially, the company consisted of engineers who shared responsibility, though the growth of the company made it impossible for this structure to be effective.

Whitman came up with a vision. She created it on the basis of the companys values, i.e. community and fairness. The CEO understood that the companys values were the reason why it had become successful. Whitman knew it was impossible to change that, but she also created the vision to fit a big company that could be successful in the global market. Therefore, this can be an example of step 3, i.e. creating a vision.

An example of the fourth step is Whitmans way to make her vision and strategy work. She effectively communicated her vision to the head of the company as well as every employee. The CEO managed to convince employees that the company was evolving and it needed to change the strategy. However, the major values were still taken into account and the idea of community and fairness was at the core of the new strategy.

One of the examples of the use of Step 5, i.e. empowering action, was the way decisions were made. Thus, Whitman notes that the company was characterized by a very particular feature as there was no wrong side. Employees were encouraged to question decisions and come up with ideas and options. This was effective as they could get more data to make the right decision.

The sixth step is generating short-term wins. Whitman claimed that the company was growing. Thus, one of the short-term wins was the growth of the company. In fact, the company was growing really fast so employees could see how effective the new strategy was.

One of the examples of Step 7 (Consolidating Gains) is the way the company acquired other auctions. Thus, the acquisition of Butterfield & Butterfield enabled the company to enter the new market, i.e. the market of higher-end products. Admittedly, this was a very successful step as it led to an increase in revenue. Another example of the implementation of Step 7 is the decision to hire more employees. Thus, Whitman and Omidyar made a decision to have 300 employees and about 300 employees in the companies which eBay had acquired.

Conclusion

An example of Step 8 is Whitmans consistency in HR management. They hire people and make sure these people have the same values and are ready to share the companys vision.

Introduction

eBay has been around for almost three decades and is now a global giant. In less than 30 years, it has transformed from a garage startup into a global giant (Baker et al., 2022). Therefore, it would be interesting to take a closer look at how eBay has turned into one of the most profitable e-commerce enterprises in the world today. A platform is an excellent tool for small and medium-sized businesses. Its goal is to empower people and create economic opportunities. A closedloop economy in which resources are sold so they can be used for as long as possible, extracting maximum value from them and redirecting waste to landfills while reducing the need to produce new goods is a modern trend (Kaya et al., 2019). However, eBay supports it from the very beginning. The most intriguing element, in this case, is how they innovated and experimented with new products and services. Furthermore, the way they target new customers from all over the world. Moreover, how they improve the quality of customer service and expand their presence worldwide.

Product Life Cycle

The product lifecycle describes all products paths from development to final decline. eBay is now at the maturity stage. eBay was one of the first online markets, and they were able to capitalize on the early growth of the Internet to achieve global business success. eBay passed the development stage in 1995 when it was still called AuctionWeb (Baker et al., 2022). It was a special software to help young mothers sell their childrens used clothes. This is how the original eBay business model was born, ensuring its success. This became the stage of introduction. eBay has developed at the growth stage thanks to various strategic partnerships. For example, the founder of eBay convinced the CEO of PayPal to join eBay immediately by offering him 50% of the company (Simakov, 2020). Now that the company is mature, eBay recorded the highest quarterly revenue in the first quarter of 2021 (Baker et al., 2022). Most likely, soon, the company will not more quickly enter the decline stage, as it introduces many innovations and continues to develop.

Porters National Advantage

Michael Porters Diamond Model, also known as the National Theory of Industry Competitive Advantages, is a strategic tool companies use to identify and develop the basis of competitive advantages necessary for international growth and development. The most competitive factors for eBay are capital resources, technological innovation, and sponsorship.

The main advantages of eBay are capital resources and technological innovations. Capital resources include financial resources available on eBay (Kaya et al., 2019). Technological innovations  scientific knowledge leads to frequent innovations. The company has broad access to technological innovations that help achieve economies of scale and reduce overhead and other operating costs (Simakov, 2020). This also allows them to enter other markets with maximum profit.

Sponsorship and related industries have also significantly helped the brand reach new heights yearly. The presence of associated industries in the domestic and international markets has also been a source of eBays growth and development in the field of products and internationalization (Kaya et al., 2019). This is because related industries have helped eBay do business by providing the necessary supporting materials to succeed. The presence of auxiliary enterprises helps eBay to grow and develop its business. In domestic markets, support sectors have helped to create an industry, enabling companies like eBay to grow and develop their business operations, attract consumers, and increase product awareness and recognition in consumer markets.

Conclusion

eBays organizational structure and development, as well as vision and strategic decisions, have played an essential role in promoting the companys international growth and development (Kaya et al., 2019). eBays policies and government structures have been particularly favorable in different countries. Government policy has supported eBays plans and expansion and growth opportunities (Kaya et al., 2019).

References

Baker El-Ebiary, Y. A., Ghanem, W. A. H., Saany, S. I. A., Rose, A. N. M., Jusoh, J. A., & Hassan, H. (2022). A Comparative Study of eBay and Amazon Electronic Commerce Platforms. Springer, Cham. 371-380. Web.

Kaya, S., Khan, M. D., & Habib, R. I. (2019). Advanced technologies for supporting dispute resolution: an analysis. Review of Applied Management and Social Sciences, 2(1), 47-57. Web.

Simakov, V. (2020). History of formation of e-commerce enterprises as subjects of innovative entrepreneurship. Three Seas Economic Journal, 1(1), 84-90. Web.

This article will provide various topics regarding eBay as an information system. eBay is a very large corporation and has various levels in it that will be analyzed to the best knowledge. Topics covered will include approaches of the company on a Server-Side. This will include both hardware and software requirements for which eBay uses to operate. The next topic of analysis will include the software and hardware requirements that are necessary from the viewpoint of a client (or user) of the information system being discussed for this article. Overall, eBay is a very vast organization which keeps a lot of their operational information away from the public so some educational assumptions will be made. Regarding the lack of server-side information, some may also be slightly dated since it is the only available source to be looked at.

Server-Side Hardware Requirements

First and foremost, from researching eBay has a vast network of various technologies it utilizes hardware-wise. There was very little public information regarding the actual hardware requirements that eBay utilizes to operate. That being stated it can be assumed that this giant is currently using cloud-based systems and physical servers. eBay is taking large steps in changing its infrastructure with hardware and it ranges from building data centers, and server design. (Knorr, 2016) Of course, the most important hardware eBay is using is its physical servers since they are necessary backbones to any information system on the scale of this company. As stated above since eBay actually is creating it’s own server design it is hard to say specifically what type of servers they are utilizing hardware-wise. It can be assumed that the company is using rack-servers due to cost-effectiveness and size. Again, based on speculation these said rack-servers are most likely in server farms throughout the country and maybe even supported by third party companies in data centers. It is assumed that the company utilizes file servers, web servers, cloud-based servers, and various other servers to support all the operating systems of users and employees. It can also be assumed that the company has various backup servers for both files and web in case an emergency happens. On eBay’s scale, there are probably data centers that are solely responsible for backup if something were to occur.

Server-Side Software Requirements

eBay is currently utilizing OpenStack and Apache Kylin as software. (Knorr, 2016) From the readings it appears that Kylin is in-house software system created by eBay itself. Kylin provides SQL interfaces and OLAP. The company is also using Hadoop infrastructure utilizing things like Storm, Kafka, Spark, and even JavaScript tools RaptorJS. (Knorr,2016) The company appears to use a large amount of in-house software server-side. This is also probably required so the information system can perform some more complex tasks and take into consideration the almost insurmountable combinations of data needed daily. It should be noted that all the programs mentioned above are open source based. Based on the articles read one can surmise that a lot of this software is custom-tailored for eBay itself. It should also be noted that eBay is one of the largest users of OpenStack in the world. (Knorr, 2016) OpenStack is a cloud operating system software. Storm is most likely used to store data input of the system. Additionally, Kafka is probably used for the actual data traffic. Spark on the other hand appears to be used for data processing itself and to work synonymously with Kylin and SQL. It can be deduced that there are probably even more required and necessary software being used by eBay to support its information system.

Client-Side Hardware Requirements

On the client-side, there are several ways to access the information system provided for eBay. Some examples of hardware devices that can access eBay are tablets, desktops, laptops, and smartphones. There are no websites that could be found that specify the minimum requirements hardware-wise to access eBay. Based on this it can be assumed that in order to access the eBay website, one must have the minimum hardware requirements for a web browser. For this example, Google Chrome will be used as a benchmark for minimum software required. For Windows to run Google Chrome it must be equipped with a Pentium 4 processor or higher post 2001, have 100 mb of hard drive space, 128 MB RAM. (Decker, 2016). The Hardware requirements for Macintosh and Linux are very similar. For Macintosh chrome will only run on post 2006 intel powered macs with 100 MB of hard disk space and 128 MB of RAM as well. (Decker, 2016) The same RAM and hard disk space requirements are for Linux as well, however, Linux can run as old as a Pentium 3 processor. Overall, most people with technology can access the eBay website. In terms of required tablet and smartphone software, it was much harder to find minimum requirements for the eBay app. It can be assumed that the devices must have the hardware required to keep up with the most recent updates to the stores they are accessed by. And the hardware if accessing the website browser-wise meets or exceeds that of the minimum computer hardware requirements. Other than mentioned above there are no other extra hardware requirements outside to access the information system.

Client-Side Software Requirements

There are several required minimal software requirements client-wise to access eBay’s information system by website. This will be based on using a Google Chrome browser. It can be assumed that other web browsers will also have requirements close to this benchmark browser. For Windows, the oldest supported software is Windows XP with Service Pack 2. (Decker, 2016). For a computer running Macintosh, the minimum required operating system is X version 10.5.6 which dates from 2009. (Decker, 2016) And finally, for Linux, the minimum requirements are most distributions from 2010 and onwards. (Decker, 2016) In terms of access the information system via smartphone or tablet the required operating system will be whatever is the bare minimum to be able to access the companies app store and have the most usable up-to-date form of the application. In terms of web browsers, almost all current web browsers can access eBay’s website. No other special software is required to run the website outside of having a web browser. The two ways to access this information system on a client-side are from said website or application via smartphone or tablet.

Competitive Analysis of the System

This information system both gives a competitive advantage to those who use it and as well to the parent company that utilizes it. The overall purpose of eBay is to provide a seamless way to buy and sell goods via online. This information system as mentioned above is very tech driven and utilizes this technology to stay in competition with other companies. A good example is eBay using OpenStack technologies. Other large companies such as Facebook and Amazon also utilize such technologies within their own infrastructures. One thing that eBay does to also stay competitive is to make sure its interfaces on a client side are easy to use for buying and selling items. The one factor that keeps eBay ahead of its competition is continuing to have a simple seamless system. The easier it is for the client to be able to buy or sell items the more people that will continue to grow the company. Another small while necessary part of this information system to keep it competitive is having a smartphone and tablet app. This allows users to access their eBay accounts anywhere via cloud technology. Keeping the app up to date and easy to use adds into the part of helping maintain an edge over competition. From personal observations it seems two large competitors to eBay is Craigslist and Facebook Marketplace. However, both competitors are focusing more on a local market versus the much larger scale eBay provides for clientele. eBay overall must stay with a competitive edge because if it doesn’t then it will cease to exist. Overall, this information system is important to eBay because without it there would not be an eBay. This company also ahs to compete with Amazon and internationally with websites like Ali-Express. Luckily since vendors can set their own price via this information system it also creates a competitive edge to others since eBay will always get a cut from sellers no matter how the market runs versus competitors who work with more set values. This is also another reason eBay must stay competitive with it’s software so vendors and buyers will continue to use them.

Recommendations for Improving the System

The first recommendation for improving the system would be coding a more practical and straightforward way to sign into your account. While the log in section is available on the home page it is in a very inconvenient location. The company should probably create a prompt to log in or create an account via Java etc. for the user when they initially access the website. This may also be to help “lure new users into looking and not being forced to provide information to access content. Overall, the log in interface seems much more clunky than the rest of the website and updating the code and “login interface” could help with those who have issues seeing smaller text and to help prevent frustration in hunting down a small sign in button.

The next recommendation is that eBay program in an instant messenger-based client to their interface. A large complaint with the overall system is that communication can become significantly slower between buyer and seller with the current message system utilized by the company. The system right now works more like an email system with inboxes. An instant messenger program within the user interface would significantly speed up communication time and potentially speed buying processes for items between buyers and sellers. It will also give a competitive edge against things like Facebook marketplace since Facebook is already taking full advantage of the ability to utilize its instant messaging system. Overall there is almost no negative impact of adding this to the information system since communication becomes easier between buy and seller.

The last recommendation is a revamp to the home page design. Right now, the overall homepage is disorganized and layered with large amounts of recommended and recently viewed items. The overall home page interface is taking a shotgun approach and dropping as many categories for items to buy than necessary. Compared to amazon the interface is much more forced with items. Another addition to upgrading the home page layout and coding is potentially upgrading the AI technology for said search histories and items recommended to look at/buy. Right now, the technology seems inferior to that which Amazon is using. It appears if you search for something one time eBay will continue to bombard you with recommendations based on one search versus using algorithms to potentially order searches based on what is most likely searched versus what appears to be an easier approach of basing recommendations on most recent search. Overall these last two combined software aspects would significantly improve eBay’s traffic and create an even happier clientele base. eBay has strengths like having a “garage” for your vehicles to search for compatible parts but it needs to be laid out in a better manner or even have coding for each user that allows them to make a profile to customize their own home page for recommendations potentially.

Conclusion

At the end of the day like all things eBay has its shortcomings. However, the company continues to upgrade its information system to keep it actively competitive. It continues to leverage advantages of having very low hardware and software requirements to work. eBay places large amounts of time and money into continuing to upgrade its information system because the heart and soul of this company is the information system. Without this eBay would be added to the annals of time like companies like Blockbuster. With the amount of time and money eBay puts into its information system this is something not likely to be seen for quite some time.

References

1. Decker, F. (2016, October 26). Google Chrome Software Requirements. Retrieved October 13, 2019, from https://smallbusiness.chron.com/google-chrome-software-requirements-48820.html.
2. Knorr, E. (2016, March 7). What eBay looks like under the hood. Retrieved October 13, 2019, from https://www.infoworld.com/article/3041064/what-ebay-looks-like-under-the-hood.html.
3. Sverdlik, Y. (2018, September 7). eBay Designs Own Servers, Decentralizes Data Center Strategy. Retrieved October 13, 2019, from https://www.datacenterknowledge.com/ebay/ebay-designs-own-servers-decentralizes-data-center-strategy.

Abstract

This report will identify the issues that eBay had to face when they encounter China market. The author will point out the main reasons which made eBay failed. Finally, the author will give recommendations in order to help eBay go through the difficulties when they entering China.

I. Introduction

eBay Inc. is an American multinational e-commerce company with headquarters in San Jose, California (eBay, 2019). eBay Inc. also owns another famous brand, Paypal – one of eBay’s main payments. By early 2008, eBay expanded worldwide and succeeded in many countries with millions of users. The company is an online auction and sales website where buyers and sellers can buy and sell their goods around the world. eBay has revolutionized the marketplace, bringing together buyers and sellers across the globe into a huge marketplace where the auction never ends. Millions of tools, equipment, computers, furniture, and millions of other items are posted, purchased, and sold every day. EBay’s revenue comes from many aspects. The first is the auction posting fee collected of the seller whether or not the product is sold. EBay then charges a fee when the product is successfully traded, plus a number of additional fees. In addition, eBay benefits from the Paypal payment system whenever a payment is made through the service. In 2002, eBay acquires EachNet, the leading trading company in China, in cash for approximately $ 180 million. Then eBay entered in China through EachNet with the hope that they will success as they did in other countries. However, eBay had to withdraw from China after operating in this market for a few years. What are the main reasons for this failure? This report will highlight the problems then give some recommendations.

II. Main Body

2.1 Lack of cultural understanding

China is a big market and requires a lot of patience. It is also a big and fierce market with loads of competitors. In order to have a chance in China, American companies must empower their affiliates so they can be responsive, autonomous, localize their businesses, and ready to fight. However, because of subjectivity, eBay has adopted their global strategy in the Chinese market and eBay has failed despite their support from EachNet. Chinese users want to talk to sellers, develop relationships, and bargain – similar to the direct shopping experience. eBay did not meet this need. Probably because they want their products to be consistent with products in the US. Soon realizing the danger, Alibaba’s founder Jack Ma created a direct competitor to eBay in China, using market understanding to compete with eBay’s international standard model. Alibaba, meanwhile, understands the minds of Chinese consumers and offers the ability to talk on its e-commerce website Taobao. Unlike eBay, Taobao is not a place for customers to compete to bid for a desired product, Taobao is a place where countless sellers can compete with each other with countless products with different service levels. As for Taobao, because Jack Ma deliberately built a free ‘online market,’ they were completely indifferent if their customers interacted with each other or used any kind of purchase method. In fact, Taobao also allows buyers and sellers to call each other, get acquainted, and even meet face-to-face to complete large orders. In addition, Taobao knows that customers tend to use their phones rather than the internet. Therefore, Taobao provided a free voicemail and messaging service between sellers and customers. This is a huge plus for Taobao when expressing its interest in customers. Although there is a competitor who understands the ‘home field’, eBay is confident that its successful model in the world will surely continue to succeed in China. eBay sellers will be charged a fee for every purchase. Customers who want to use eBay must constantly pay many large and small fees, from account registration fees to the sale of products, transaction fees… After Taobao received a lot of investment, eBay still did not believe the Taobao model was a real competitor. Part of its that confidence comes from a nearly 70% market share in the first year eBay appears in China (compared to 7% of Taobao). Taobao is still 100% free of charge, causing a series of sellers to come here to sell products because it does not cost a penny. Step by step, Taobao has become a ‘everything’ paradise in China, and that strength gradually leads to customers wishing to search and shop. Another advantage of Taobao is that they replace PayPal with AliPay and link with most domestic banks in the country to help customers with more payment options. Meanwhile, eBay’s main payment methods are PayPal, credit cards, debit cards, and checks. Small businesses do not use credit cards and debit cards, and for PayPal, they will have to pay a fee, so eBay customers and businesses have many difficulties and inconveniences to make purchase and sale transactions.

Another mistake of eBay was that eBay did not consider local talent for key positions, instead, eBay paid a huge sum of money to senior managers from Germany, Korea, and Taiwan. Loan and the US, who do not even know a Chinese word in half and do not have the full knowledge and experience of the Chinese market, will operate a market halfway around the world. On the other hand, Taobao is managed and run by Chinese managers and employees who understand the Chinese market best and the needs of their customers. One of the factors that helped Taobao score with customers is its name. Taobao – which means ‘Digging for treasures’ in Mandarin language – employs local manpower and focuses on the characteristics of Chinese culture. The company’s operators also use virtual names to simulate the characters of popular Chinese martial arts novels. EBay has spent a considerable amount of more than 100 million US dollars to sign exclusive contracts with the three largest Chinese portals Sina, Soho and Netease with the purpose of banning Taobao ads on these sites. EBay is also heavily advertised in China, from train platforms, subway stations to buses. Recognizing the needs of small and medium-sized businesses that tend to watch TV rather than access the internet, Jack Ma ran Taobao ads on all TV channels across the country.

EBay also forced EachNet to transfer the interface that was so familiar to customers to become a Chinese copy of eBay USA. Not only did it cause a lot of frustration, a significant amount of customer data could not be synchronized, causing them to decide to create new for free at Taobao, instead of re-providing the information they have filled and must Additional new charges on eBay. Another mistaken decision was to install EachNet servers in the US. The image loading speed is slow and the ‘overload’ error appears often, causing many customers to lose patience. Slow and unstable services make users frustrated and they will be left eBay EachNet. Not only that, the eBay server is always maintained at midnight on Thursday in the US time frame, but it is … 9 am in China, making this website often ‘shut down’ in the middle of the day. After moving, the Chinese eBay EachNet team lost much of its control over the page and could not make changes to existing characters or release any new characters. At that time, Taobao became a better alternative to eBay with a friendly interface, easy access, faster access speed, and completely free of charge.

Within 2 years, Taobao quickly took over eBay. By the end of 2005, eBay stopped charging users, but they could not regain the market share. And as of 2007, just 4 years after its launch, Taobao has completely outstripped eBay with more than 83% market share (compared to just 7% of eBay). Shortly thereafter, eBay decided to withdraw from China after investing nearly $ 300 million in Chinese operations.

III. Conclusion

Overall, China is a different and new market compared to other markets around the world. eBay needs to learn more about the business environment, the rules, the culture before entering the Chinese market. Not only that but also the reference to experience of American companies that have been operating in China before is also a very important factor that helps eBay know what to avoid when it wants to enter the Chinese market. In addition, eBay should not be too confident in its global success format to succeed in China because China is unlike any other market. In addition, eBay should be more open to choose management for foreign branches, eBay should choose local managers because it is they who understand everything about the market.

IV. Recommendations

According to Andrew H. – managing director of ChinaSolved (Susie, 2014), the most important step for succeeding in China is planning and researching into small print of distribution and employment contract. To be able to do that, eBay needs to investigate the Chinese market carefully from the top to the roots including regulations, rules, environments, customers, how to do business and define its market niche (Helen, H.W., 2012). The next step is to adapt and change reasonably according to the environment and to be able to attract potential customers. After entering China, eBay needs to keep up with latest news about local and government and changes in daily life.

V. Reference

1. Helen, H.W., (2017) How EBay Failed in China. Forbes. [Online] Available at https://www.forbes.com/sites/china/2010/09/12/how-ebay-failed-in-china/ [Accessed 15 Sep 2019]
2. Susie, G., (2014) What it takes to succeed in China. BBC Worklife. [Online] Available at https://www.bbc.com/worklife/article/20140204-succeeding-in-china [Accessed 15 Sep 2019]
3. eBay (2019) Our History. [Online] Available at https://www.ebayinc.com/company/our-history/#timeline-year-2019 [Accessed 14 Sep 2019]
4. Helen, H.W., (2012) The Secret of Succeeding in China. Forbes. [Online] Available at https://www.forbes.com/sites/helenwang/2012/09/28/the-secret-of-succeeding-in-china/#47c635be2bfd [Accessed 17 Sep 2019]

Most are familiar with the massive online shopping website eBay, which connects buys and sellers in a massive online marketplace. eBay hosts more than 11 million product searches per hour and has more than 1 billion products listed at any time (Smith, 2019). Like many others I have used eBay for anything from collectible books to new car parts, you can even by a new car on eBay if you wanted. The way the website works is simple; you create an account and link your payment information and address, agree to their terms of service, and then begin your search for whatever it is you are looking for. Once you have found a product that interests you, you have the option of placing a bid and competing with other buyers or simply clicking the “buy it now” button which is normally more expensive but guarantees you the item. The question posed is whether or not placing a bid on an item enters the buyer and seller into a legally binding contract; one that legally requires the buyer to complete the purchase and the seller to be legally required to accept the payment and deliver the product to the buyer.

The textbook lists four elements to a contract; Agreement, Consideration, Contractual Capacity, and Legal Object (Kubasek, Browne, Herron, Dhooge, & Barkacs, 2019, p 174). when biding on most commonplace items on eBay you are essentially entering into a contract with the seller because you are meeting all four of the contractual elements.

Agreement: During a purchase on eBay it is clear that both the seller “offeree” and the buyer “offeror” meet the agreement element of a contract. The seller takes great consideration when placing their item onto the website, they must take and post pictures, write a description, and set a minimum bid price. The buyer then battles with other buyers in an auctioned themed website where each member places their desired bid on the item, when another buyer outbids you, the website notifies you, allowing you to place another bid if you would like. Therefore, it is clear that each party is accepting the terms and neither party is entering into this contract without being forewarned and agreeing to the terms of the agreement and price set.

Consideration: The book describes consideration as “the bargained-for exchange” (Kubasek et al 2019, p 174). Meaning each party is getting something out of the deal. The seller is being paid for goods sold and the buyer is receiving that slightly used iPhone 6S as described. Should the seller fail to ship the iPhone or if the iPhone was actually a 5C then this would be a breach of contract because the buyer is not getting what he or she thought they were purchasing. Furthermore, the buyer would be in breach of contract if they had a case of buyer’s remorse, and suddenly decided they didn’t need a new iPhone and decided not to complete the purchase once they received the winning bid.

Contractual Capacity: Minors cannot enter into a legally binding contract, because they have not reached the age of consent which 18. eBay requires all of its users to create a unique account and accept their terms of use, which dictate you must be 18 years old in order to use their website. Ergo, the contractual capacity element has been met between the offeree and the offeror.

Legal Object: The final element of a legally binding contract simply dictates that the item or act in question must be legal in nature. eBay specifies in their terms of use that you cannot sell or attempt to purchase any illegal objects on their online marketplace, there is even a report button should you think an item for sale may violate the law.

As you can see a purchase on eBay clearly meets all the requirement for a valid contractual agreement between the buyer and seller. There are a few exceptions to this which eBay clearly states on their website. Such exceptions include the sale of land, automobiles and large purchases such as mobile homes or boats. So, keep that in mind next time you buy a new computer or slightly used toolset on the massive online auction site eBay.

References

1. Kubasek, N. K., Browne, M. N., Herron, D. J., Dhooge, L. J., & Barkacs, L. L. (2019). Dynamic business law: The essentials (3rd ed.). New York, NY: McGraw-Hill Education.
2. Smith, C. (2019, January 21). 85 Amazing eBay Stats. Retrieved from https://expandedramblings.com/index.php/ebay-stats/2/

Ebay is an American multinational e-commerce corporation. It promotes sales through its website. The eBay website involves an online auction and shopping website in which people and businesses buy and sell extensive variety of merchandise. Basically, this is a digital disruption event, which not only changes the traditional shopping trends, but also the online selling business of eBay itself. In this report, the work centred analysis (WCA) have been performed on the retail business of eBay prior and post implementation of the digital disruption events, challenges faced by the company, recommendations based on the analysis and implementation plan of the way to overcome the challenge.

Assumptions

For the newer sellers shipping on eBay can seems like a bit frighten. Well it is assumed that if I sell a lot, I’ll be spending all my time at the post office but actually it is just opposite. Then some people find out that it is hard to find out shipping costs. Well it is hard, if you are not prepared. People often complain about the lack of time but actually the lack of direction is the real problem.

Introduction

Digital disruption is the change that comes when new technologies and business models affects the value proposition of existing goods and services. It characterizes more disruptive changes in business history (Christensen, 1997). Digital disruption deals with the changes that occurs after the entry of new technologies in companies. Digital disruption is important for organizations because it is important for the competitive advantage. By understanding the digital disruption companies can keep existing customers happy as well as create opportunities for new customers. When digital disruption also signals that consumer needs are moving. This report will monologue the impacts of digital disruption introduced by eBay on the company itself and its Work Centred Analysis (WCA) prior and post to the implementation of the digital disruption events.

Introduction to the case study eBay was s first global auction platform. Millions of appliances, furnishing items, equipment, vehicles and other necessary items are listed, bought, or sold daily on eBay. Basically, anything can be auctioned on the site. Although the company has faced a lot of challenges in expanding to new markets, which indicates its eventual decrease domestically. Ultimately eBay can survive as a used good sellers because it threats from better positioned competitors. At the end of 2017 eBay has 168 million active buyers, an increase from 90 million active in 2010. Near about two-third of transactions are now international. eBay allows sellers to list items for sale on an auction and also fixed-price method giving buyers the opportunity to offer and purchase items of interest. Digitization is not anymore just an emerging trend, and it is changing the economics of globalization in several ways (Thibaut Wautelet). It is concerned with business-model innovation that enables entrants to entre markets with easy to use, but low-performing products (Christensen 2006; Christensen et al. 2015).

Work Centred Analysis (WCA) prior to the disruption event

In the digital innovation discourse, multiple related terms with various nuances, are sometimes used interchangeably (Lenger et al. 2017; Nambisan 2018). Work Centred Analysis (WCA) involves six main segments and these segments are customers, products, business process, participants, information and technology. Customers are the inward and outward buyers of the business activity. Products are the merchandise and facilities produced by the business. The business process mentions the steps involved in business. Participants are those who elaborate the business. Information refers the understanding or awareness that the business creates for the customers. At last technology is used by the business to manage the needed activities.

Problems identified

Since eBay is the one of the best marketplace for new business. However, there are some issues that many sellers can face and these issues can stop their success on the platform. Some people are selling same kind of products while the competition may work in favour of the buyer. Because some sellers are selling duplicate quality stuff which gets sold quickly while the other seller have to wait for the wise buyer to see the difference between the quality of the products. Then there are some negative or bad reviews which can hurt sellers a lot. Also when buyer does not like the quality of product then he or she has all rights to cancel the purchase and ask for refund. Then in that case seller suffer a double loss. eBay has seen more frauds done by the buyers than the sellers. These frauds include fake payments from fake PayPal account, fake reviews, negative feedback etc.

Work Centred Analysis (WCA) post implementation of the disruption event

Digital innovation has been defined narrowly, focusing on the design process (Yoo et al. 2010). eBay provides infrastructure to settle online commerce in a variety of formats. The innovation labs in eBay will give consumers the chance to explore the emerging technologies. Emerging technologies basically opens a new word of inspiration and experience. eBay is working with emerging digital trends. Due to addition of new technologies numerous customers have been satisfied. The first transformation is from Auction to “Fixed-Price” and “Buy-It-Now”. Auction worked very well in the initial stages but this format lost its propulsion easily. The second transformation is from “listing-based” to “Product-based” Structured data. Then eBay has transformed the shopping experience to be more product-based. eBay have better services for buyers. As a process, digital innovation is therefore inherently combinatorial and societal digital transformation continuously expands the available design space for digital innovation (Lyytinen and Rose 2003).

Recommendations

These following are some recommendations that helps to handle the issues faced by the company:

1. When any seller sell an item on eBay but sometimes a customer has second thoughts and does not pay for the item then in that case the seller will able to refunded by eBay for the fee.
2. Offer a fair return policy, it becomes easy when buyers feels confident while purchasing items on the site. So it is necessary to describe that the buyer will get refund.
3. One of the largest barrier for new sellers is packaging. Packaging is a skill that anyone can learn with practice and patience. So learn to package and shipping items properly is also required.
4. One of the most powerful technique is working in bulk. The sellers who can use the bulk listing technique will gain a significant benefit by saving large amount of time.
5. Buyers on eBay are looking for separate things, some wants lowest price items and the others wants the new product But at the end of day, every clients wants to be sure they are making a purchase from a trustworthy merchant who will always supply a good quality product.

Implementation plan for the recommendations:

1. Get more eyes on your listings, use advanced listings to create effective ad placement in well known locations across eBay and pay nothing unless the ad leads to a sale.
2. Make customized discounts and coupons to motivate buyers to spend more in your store. Use promotions manager to improve your items.
3. Go worldwide, to get buyers around the world. The global shipping program is a better way to expand your sales and market. Selling items globally is as easy as selling across the towns.
4. Also an easy way to encourage eBay buyers to return to your store is to include a package insert such as business card. This plan can easily help to promote the eBay store.

Conclusion

EBay is well aware that in order to the company to maintain its competitive benefit and make it sustainable in the long term run, the company must take benefit of the changes at the corporate, organization and business level. eBay accept the five building blocks which are applied randomly throughout eBay’s history. These five building blocks are improvisation, co-adaption, regeneration, experimentation and time pacing. The company also accepts the principles of competing on the edge about strategy, organization and leadership.

References

1. Christensen CM (1997) The innovation dilemma: when new technologies cause great firms to fail. Harvard Business School Press, Boston Christensen CM (2006) The ongoing process of building a theory of disruption. J Prod InnovManag 23(1):39–55.
2. Christensen CM, Raynor M, McDonald R (2015) What Is disruptive innovation? In: Harvard business review. https://hbr.org/2015/12/what-is-disruptive-innovation Accessed 26 June 2018 eBay continues shift to Amazon-esque business, https://techcrunch.com/2016/10/19/ebay-continues-shift-to-amazon-esque-business/.
3. Legner C, Eymann T, Hess T et al (2017) Digitalization: opportunity and challenge for the business and information systems engineering community. Bus Inf Syst Eng 59(4):301–308.
4. Lyytinen K, Rose GM (2003) The disruptive nature of information technology innovations: the case of internet computing in systems development organizations. MIS Q 27(4):557–596.
5. Nambisan S (2018) Architecture vs. ecosystem perspectives: reflections on digital innovation. Inf Organ Inf Organ 28(2):104–106.
6. Planet Money podcast “Antitrust 3: Big Tech”https://www.ecommercebytes.com/2018/10/25/amazon-launches-auction-marketplace-to-liquidate-returns/.
7. https://hbr.org/2015/12/what-is-disruptive-innovation
8. https://techcrunch.com/2016/10/19/ebay-continues-shift-to-amazon-esque-business/
9. https://techcrunch.com/2016/10/19/ebay-continues-shift-to-amazon-esque-business/
10. https://www.ecommercebytes.com/2018/10/25/amazon-launches-auction-marketplace-to-liquidate-returns/
11. https://www.ecommercebytes.com/2018/10/25/amazon-launches-auction-marketplace-to-liquidate-returns/

eBay is a multinational online consumer-to-consumer company based in California, USA. It was started in 1995 by Pierre Omidyar (Collier, 2013). The firm has now been transformed into a multi-billion dollar enterprise with operations spread to more than thirty nations. Its core business is composed of an online shopping and auction website; businesses and individuals purchase and sell a wide range of commodities and services globally. The website has grown to incorporate standard shopping, classified advertisement, event ticket exchange, and money transfers among others. eBay is one of the world’s markets and the largest recycling center. The firm deals in merchandise sales and auctions on the internet. The provision of a global market and timely collection of taxes are at the heart of eBay’s business model. eBay neither runs stores nor has warehouses. Its revenues originate from advertising and listing charges, the banking system for internet clients, and PayPal (Collier, 2013).

In 1995 Pierre founded AuctionWeb as part of his site. One of Pierre’s initial sales on the site was a damaged laser point. eBay was run as a hobby until early 1996 when Pierre started charging persons who used his site. Towards the close of 1996, eBay secured a third-party licensing agreement with Electronic Travel Auction. Through the arrangement, the firm obtained the right to transact plane tickets via the Smart market Technology. In January 1997, eBay recorded phenomenal growth; the site registered two million auctions, a shoot from 25000 during the previous year. Towards the close of 1997, AuctionWeb was renamed eBay. On 21^st September 1998, eBay was listed and recorded a tripling effect on its price on the first trading day (Collier, 2013).

The company continued to expand through horizontal and vertical acquisitions. Nevertheless, at the onset of 2006 internet auctions registered a disturbing movement. Owing to the maturation of the internet business, clients grew less willing to wait for days trailing their bids to achieve a good deal. In addition, online buyers were uncomfortable with the toppling of bids at the last minute. With automated software programs, last moment bidding became common. Search engines enabled clients to swiftly locate any commodity at the least price. The convenience of purchasing goods swiftly at a predetermined price gave clients room to save on time. The new development created a performance gap in the company’s operations; the future performance of eBay was at stake.

Data analysis at eBay indicated that the firm’s traditional ploy, online auctions, was getting obsolete. About half of eBay’s transactions were attributable to fixed prices sales while auction sales constituted less than thirty-three percent compared to seventy-five percent in the previous two years. eBay instituted performance gap analysis to bridge the performance gap. The performance gap analysis process involves the definition of a change program’s objectives and system parameters, recognition of problems, symptoms, and the roots of ineffectiveness, identification data collection methods, description of diagnostic models and methods used in online data programs, and application of ordered diagnosis to a firm’s situations. On identifying the areas in need of improvement, the present performance is assessed and the envied levels of output and quality are set (Brown, 2011, p. 117).

Performance gap analysis provides the information needed for a swift response to changes in the business environment. When data analysis was concluded at eBay, the management resolved to alter its strategy by shifting to fixed-price commodities. eBay resolved to concentrate on easing the process of finding goods for consumers (Brown, 2011, p. 120).

Advantages and Disadvantages of Large Quantities of Data

Gathering large quantities of data is essential in maximizing the performance of eBay. Through large quantities of data, selling prices can be optimized, and improved customer satisfaction is achieved. Large volumes of data empower the seller to identify what customers are looking for, what they like, and what they want to buy. Large-scale data accumulation has facilitated the improvement of customer relationship management. Indeed, big data creates customer intimacy and places the customer at the center of the corporate strategy. The availability of large amounts of data eases the acquisition of more customers. Demand signaling becomes easier; this leads to maximization of profit. Through large data, it is easier to targeted customers through adverts (Russ and Preskill, 2001, p. 180)

Large quantities of data are transformative as they take businesses to places. It is easier to perform analysis when you have big data. Big data enhances opportunity creation in businesses. It also enhances service offering as they are offered in real-time. Products renovation and expansion are realized. Through large data old segments can improve including their functions. New businesses models are developed through the availability of large data quantities and especially financial businesses. Big data enhance strategic decision-making. Mass production is realized and this leads to growth and cost reduction opportunities.

The government is not left behind when it comes to benefiting from large data quantities. Big data has enhanced service improvement, taxpayer funds optimization, improved market governance, and better protection through improved weaponry. Fraud detection and prevention are possible through large quantities of data. It is also possible to conduct risk and portfolio analysis when large quantities of data are gathered.

Though the accumulation of large quantities of data provides leverage to identify patterns, trends, correlations, and relationships, it also presents serious challenges to the clients, users, and their systems. The collection of large amounts of data makes it more challenging to analyze and make meaning out of it. Bulk data collection also inhibits the efficiency of the available infrastructure (Russ and Preskill, 2001, p. 181).

The collection of large amounts of data raises privacy and security issues. Many corporations have acquired a lot of confidential and personal information relating to their clients. Unfortunately, most of them have inadequate security resources to safeguard such information (Russ and Preskill, 2001, p. 193). This exposes their clients to infringement of privacy by fraudsters and dishonest employees and misuse of their personal information.

Indeed, the issue of personal privacy has increasingly become a cause of concern particularly with the boom in internet consumption through e-commerce, blogs, social networking, forums among others aspects (Russ and Preskill, 2001, p. 213). Clients are worried that their data is gathered and put into unethical use likely to cause many troubles. Furthermore, businesses or corporations do not last for eternity; they may merge with others, be taken over, or get out of business. In case of such eventualities, the data collected to provide an understanding of customer trends may leak or be sold to other organizations.

Although the accumulation of large amounts of data is essential to understanding consumer behavior, it cannot be useful by itself. Online data analysis needs a specialist to draw objective inferences out of the computerized output. If the specialist inputs an incorrect or inadequate amount of data, the result will be adversely affected (Russ and Preskill, 2001, p. 181).

References

Brown, R. D., (2011). An Experiential Approach to organizational Development.London: Pearson Education, Limited.

Collier, M., (2013). eBay Business All-in-One For Dummies. New Jersey: Hoboken.

Russ, D., and Preskill, H. (2001). Evaluation in Organizations. New York: Basic Books.

Attack Analysis

The possibilities of the Internet today can be considered almost limitless because, with the help of the global network, a large number of operations are performed daily, and people around the world enjoy these benefits. However, the Internet is not always used for peaceful purposes. With the development of technologies and the improvement of programming systems, there have become more frequent cases of so-called hacker attacks, which are a real problem for many large companies. The scenario of such attacks is often similar: cybercriminals hack into secret databases and other private information that is usually not publicly displayed and place stolen data on the network. Over time, it has become more difficult to fight such criminals as new ways of circumventing defense systems and antivirus databases were invented. Thus, one of the most famous cases in the world, which related to the hacking of important information, was the attack on the database of the world-famous online store eBay. According to some sources, it was included in the list of the most severe attacks in the history of the Internet. Therefore, it is necessary to find out what the perpetrators were guided by, what result this attack entailed, and what measures could have been taken to prevent the leakage of important data.

Summary of the Attack

The case under investigation occurred in the summer of 2014 when one of the most popular trading platforms on the Internet was attacked by virtual intruders (Meyer, 2017). According to Meyer (2017), “the company had 145 million user accounts compromised” (p. 11). Such a large number of affected people could not go unnoticed, and the eBay case received a significant public response. Despite the fact that the attack did not touch on important financial information, for example, essential data about payment cards of clients, personal data of many users were stolen. In this regard, users of the online store had to urgently change their private information including passwords and logins, and delete old accounts in order to avoid hacking. The fact is that clients’ personal pages do not contain vital payment information. However, such personal data as volume and history of purchases, as well as some other information, were contained in their accounts. Therefore, the attack was primarily related to the theft of not financial but private user data.

The damage to the reputation of eBay was significant. The company representatives tried to do everything possible to compensate for the damage done to their customers. However, the authority of the online store as the largest site for the sale of goods was significantly spoiled, and its management had to experience much criticism in its address, which came from angry shop users. Because of the fact that this hacking attack has become one of the most public in the history of the Internet, it is still an example for many other large online trading corporations. Therefore, the events of 2014 were discussed very actively, and today, eBay is putting much more effort than before to protect its data.

Analysis of Hackers’ Activities

The activities of people who hacked user information and abducted passwords and access codes were organized professionally enough. It is worth noting that the protection of eBay was not absolutely useless, and for some time, the firewall was protected. Nevertheless, cybercriminals managed to circumvent this protection and successfully commit their crime. The following Figure 1 will show what exactly happened to the Internet store, and what threat its customers had to experience:

According to Figure 1, it can be concluded that customers could have been a rather serious risk if the target of the hackers had been to attack for the purpose of stealing and using certain information. It is hard to suppose what the motives of cybercriminals were and what they wanted to achieve. Perhaps, their actions were aimed at undermining the authority of the company. Thus, according to El-Kenawy, El-Desoky, and Sarhan (2014), eBay has always been one of the world’s largest online platforms, and the activities of competitors have always been aimed at reducing the popularity of this store. Also, a possible version of the reason for the attack may be an ordinary database hacking for entertainment purposes, thereby showing the creators of the security system that their product is unsafe and can easily be damaged. Regardless of the intent of the criminals, they managed to achieve what they aspired to: the eBay system was hacked, and the information of millions of user accounts was made available to strangers.

Hackers did not use the scheme of well-known DDoS-attacks when many requests are made to one site with the purpose of its collapse. They used a more sophisticated method. Having hacked an information field of the online-store, they gained access to essential information. Due to the fact that critical financial data were not stored in an attacked base, money was not stolen by the attackers. However, the reputational damage to eBay was enormous. According to Aggarwal, Arora, and Ghai (2014), millions of buyers on the Internet lost their password-protected data. This hacking attack was one of the most famous in the history of the Internet and has become a reason for discussion for a long time. Perhaps, if the criminals had managed to steal the company’s money and buyers’ personal funds, eBay would have entirely ceased to exist and have received many lawsuits from dissatisfied customers. However, the theft was only informational, which, nevertheless, cannot be regarded as something positive. If specific measures had been taken timely, it would not have been so easy to hack the system and steal valuable information.

Approaches for Mitigating the Attack Vectors

One of the main reasons why hackers did not succeed in stealing valuable financial and other private data was that the information was stored in an encrypted form. Thus, in order to prevent unauthorized access to information, listening, and intercepting traffic, encryption is used. It is a method of converting data to maintain confidentiality. The encryption process involves negotiating a particular key among users and using it on a particular website or another platform. The technical peculiarity of this method is that the attacker will not be able to access data without having a unique key that was used by users. Encryption can be symmetrical and asymmetric. In the course of symmetric encryption, one key is used that was previously known to two users. In asymmetric encryption, two keys are used: public and private. A public key is used to encrypt a message, and a secret key is necessary for decryption. Most online platforms, including eBay, use an asymmetric version of encryption. The simplest and most well-known option for such protection is as follows:

According to Figure 2, it is possible to note that a similar type of encryption is used on many online platforms. Also, it is possible to define a few more methods of how eBay IT-employees could prevent the attack of 2014. In order to protect the system from a possible recurrence of such attacks, it is essential to adhere to appropriate preventive rules.

Restricted Access to the System

The ways to combat unauthorized access can be quite simple if they are properly implemented. The fundamental thing here is the reduction or complete elimination of hackers’ ability to gain access to the system through an unauthorized protocol. As an example, it is possible to consider avoiding hacker access to the server, which provides Web services to external users. Without access to this port, a hacker will not be able to attack it. As for the firewall, its main task is to prevent the simplest attempts of unauthorized access.

If the specialists of eBay’s IT department had been able to provide complete protection of its content in time to prevent unwanted access to the system, the 2014 case would not have happened. One person or group of people successfully took advantage of the fact that the online store did not have a sufficiently secure network, and it was not difficult to steal unprotected data. After the incident, it was decided to strengthen the protection of the network and check its protective protocols in order to exclude possible repetition of the attack. Nevertheless, the damage suffered by the corporation can hardly be forgotten.

Centralized Key Management

The method that in many ways resembles standard encryption is centralized key management. Several important points are taken into account here, and the order of work should be in accordance with a certain algorithm and observance of a special chain. This order is displayed in the following scheme:

According to Figure 3, it is possible to see that all the objects in the database chain are managed by one key element. It is significant for the management of such a scheme to conform to all the standards of modern information protection. The more reliable and professional the central control apparatus will be organized, the more chances that this or that system will be entirely protected from hacker attacks. Accordingly, an insufficiently qualitative scheme can lead to the threat of data theft.

Design to Identify the Attack

There are many ways to take advantage of the vulnerability of a particular network. Hackers can use one or several exploits at the same time, incorrect settings for software components, or even a backdoor program installed in the operating system during the previous attack. Because of these measures, detecting a hacker attack is not the easiest task, especially for an inexperienced user. The data center infrastructure that was used in the eBay of 2014 was characterized by rather standard principles; all the software, server hardware, and monitoring systems were quite ordinary. The control of security levels was carried out in accordance with a traditional scheme, and no special procedures were used. Therefore, it is necessary to formulate some outline and tips that could have helped an operator to identify whether the computers of eBay’s network could have been protected from the attack. Surely, it is impossible to claim that all these methods will give a full guarantee that a hacker attack would have been detected. However, if a specific system is about to be damaged, some of the following indicators can probably be seen.

High Outgoing Network Traffic

When using a common type of connection, it is possible to notice an unusually large amount of outgoing network traffic. In particular, it can be observed when computers from a certain group are connected to the Internet, but no activities are done. In this case, the risk that the network may have been hacked is high enough. Such a computer can be used for hidden spamming or the propagation of viruses. Those who participated in hacking the eBay company were not likely to take advantage of this type of vulnerability. Nevertheless, it is significant to remember about such a danger and timely prevent any potential breaking.

Increased Hard Drive Activity

If increased hard drive activity or suspicious files in root directories are noticed, it is a good reason to pay close attention to a protection system. Many hackers scan the information stored on the network in search of valuable documents or files that contain logins and passwords to bank payment centers or electronic payment systems like PayPal (How hackers hack PayPal account in 2017 – Hack PayPal, 2017). Some viruses similarly search for disk files with email addresses, which are then used to send infected messages. Having noticed a significant activity of hard disks even when the computer is out of work and the emergence of suspicious names in public folders, it is possible to assume that the network is hacked, and the threat of theft is high.

A Number of Packets Stopped by a Personal Firewall

After determining the target (for example, the range of IP addresses of a company or home network), hackers usually start automatic scanners trying to use a set of various exploits to penetrate the system. When launching an installed firewall that is an indispensable tool in protecting against hacker attacks and noticing an unusually high number of stopped packets from the same address, it is possible to conclude that the network has been attacked. Thus, if such a firewall reports the shutdown of these packages, the network is most likely safe. However, much depends on which running services are open for access from the Internet. For example, a firewall might not be able to cope with an attack aimed at an FTP service. In this case, the solution to the problem is the complete temporary blocking of dangerous packets until the connection attempts are terminated. Most corporate firewalls have a similar function and are used to protect companies’ networks from various threats including data thefts.

Thus, the plan to protect the personal data of eBay’s users could have been developed in advance, and if all the appropriate measures were taken timely, unpleasant consequences probably could have been avoided. The system was not sufficiently protected, which caused considerable damage. After the case of 2014, the company’s management has undoubtedly revised the approach to protecting both valuable financial information and user data. Nevertheless, if the entire algorithm is not carefully considered and some sectors of the network remain vulnerable, it is impossible to speak of full protection. Only comprehensive control will help to achieve maximum security and prevent a repetition of the attack. Therefore, there is a need to discuss additional concepts related to the attack.

Comparison of the eBay Attack with Another Case

Certainly, the attack of 2014 on the eBay database was not the only major online crime. In the same year, network users learned about such a term as the Heartbleed bug. It was a virus similar in its purpose to eBay, but it affected not only local databases but also the security systems of other well-known platforms: Google, Facebook, etc. (Gujrathi, 2014). However, these two attacks had similarities in common since hackers who developed the Heartbleed bug could access the contents of the server’s memory, which at that time could contain private user data (Gujrathi, 2014). Therefore, the principle of their operation was similar. The bug was so famous that it even had its own logo. The activities that it performed when attacking various databases can be displayed in the following scheme:

The Heartbleed bug is a serious vulnerability that allows hackers to access the contents of the server memory, which can contain private data from users of various web services (Gujrathi, 2014). In addition, cybercriminals can also obtain digital keys used, for example, to encrypt correspondence and internal documents in a variety of companies. This vulnerability allows an attacker to gain access to sixty-four kilobytes of server RAM and perform attacks many times until the data is completely lost. It means that not only logins and passwords are subject to leakage but also the cookie data that web servers and sites use to track user actions and simplify authorization. According to Gujrathi (2014), periodic attacks can give access to more serious information, such as private encryption keys used by the site to block traffic. When using this key, an attacker can replace the original site and steal a variety of types of personal data, such as credit card numbers or private correspondence.

Accordingly, this vulnerability also carries a certain danger for personal data, and its mechanism of action has something in common with the case of eBay in 2014. In particular, the Heartbleed bug is dangerous when it comes to passwords; in 2014, many customers of the online shop also were theft. Therefore, in both cases, the problem is associated with the need to ensure full protection of access to passwords and other important information that can be used by cybercriminals.

Measures to Prevent Attack Repetition

Despite the fact that after the events of 2014 the management of eBay took appropriate measures to protect the data of its customers and ensure more efficient security, there is always a risk of attack. Technologies never stand still, and new viruses and other malicious software appear regularly. Hackers can create some other threats that will be able to circumvent existing firewalls and harm content.

In order for this case not to happen again, IT professionals of the eBay company should pay specific attention to the protection of customers’ personal data and, in particular, to password encryption. There is a high probability that attackers will want to repeat the attack since this online store is one of the largest and most famous on the Internet, and access to information about its customers can bring cybercriminals a considerable profit. Thus, system administrators should regularly monitor the amount of outgoing traffic and in case of any violations or unusual situations, it is necessary to immediately take measures and block any suspicious activity. Also, it is essential not to allow third parties to the database where all important information is stored. It can happen that even a person working inside the organization can turn out to be a criminal and steal passwords and other information about clients. In order to avoid it, it is necessary to allow only those professionals who are directly involved in the IT department and do everything possible to ensure that unauthorized persons do not have unrestricted access to network information.

The management of eBay probably has taken all necessary measures since the attack of 2014. Nevertheless, it is always significant to ensure control as the hacker threat can be in any form: stealing passwords, blocking information, breaking the site, etc. Therefore, the higher the security of the system is, the less likely that cybercriminals will be able to crack it.

Conclusion

Thus, according to the information studied, it is possible to claim that eBay has undergone one of the most famous hacker attacks in the history of the Internet. The reason for the leakage of customer personal data is not enough high level of system protection. The threat could have been prevented if appropriate measures had been taken timely. Cybercriminals acted on a rather famous pattern. Despite the fact that customers did not lose their money, the reputation of the online store was broken. In order to avoid such an attack in the future, it is essential to provide enhanced database protection and monitor any suspicious activity.

References

Aggarwal, P., Arora, P., & Ghai, R. (2014). Review on cyber crime and security. International Journal of Research in Engineering and Applied Sciences, 2(1), 48-51.

The case of eBay data theft and potential threat to customers [Image]. (2014). Web.

The damage that the Heartbleed bug caused [Image]. (2014). Web.

Gujrathi, S. (2014). Heartbleed bug: AnOpenSSL heartbeat vulnerability. International Journal of Computer Science and Engineering, 2(5), 61-64.

El-Kenawy, E. S. M. T., El-Desoky, A. I., & Sarhan, A. M. (2014). Bidder strategy system for online auctions trust measurement. International Journal of Computer Science Issues (IJCSI), 11(5), 76-82.

How hackers hack PayPal account in 2017 – Hack PayPal. (2017). Web.

The login page of eBay [Image]. (2017). Web.

Meyer, C. (2017). Submitted to the Department of technology systems. Web.

The system of centralized cryptographic key management [Image]. Web.

eBay: Some History

Ebay is an online auction service, uniting buying and sellers across the world. It was initially founded in 1995, then known as AuctionWeb; the company’s current name, eBay, came about in 1997. Since its first sale, a broken laser pointer (estimated value under a dollar), it quickly grew into a corporation grossing over 10 million in revenue, according to 2018 materials.

eBay: Choosing a cloud computing model

When choosing a cloud computing model that would work best for a service such as eBay, one needs to consider the user base. For eBay, the most important factor is that its users, both buyers and sellers, are likely to use the service intermittently. For many of them, once they have bought or sold the item they wanted, they no longer need the service. Furthermore, as long as the items and payments are being delivered, the users do not know or care who the other person is. Finally, regular users are not likely to possess the computer literacy needed to install, maintain, or run complex software.

The Software-as-a-service (SAAS) model

Software-as-a-Service is a cloud computing model that suits eBay’s needs outlined in the previous slide. The vendor hosts the proprietary service, which can be accessed by users, often through a web browser. This means it requires no dedicated hardware, installation or additional steps to maintain or update on the user’s part beyond accessing the service from their existing device — from his or her perspective, it just works. This is the crucial advantage of SaaS compared to other cloud computing models: Grandma can use it to sell her vintage desk lamp with only basic computer knowledge required to operate an email and an accessible web site.

Advantages of SAAS

Deploying the SAAS model brings several advantages to the vendor. As outlined previously, it is accessible and easy to make available to a broad audience. As anyone can access the service without specialized hardware, software, or knowledge, it can be brought to a large audience with little to no limitations. Furthermore, the ease of access is further improved by the fact that since the service works entirely in a web browser, the user does not need to spend any time on installing, updating, or managing it. He or she can stop and resume using it as necessary, even with years in between.

More advantages of SAAS

For the vendor, developing a SAAS model allows to reduce costs, as well. Since the critical part of the software is hosted on the vendor’s hardware, there is no need to develop separate software for Windows, MacOS, Linux, Android, or maintain implementations for legacy systems. Although a web client still needs to be adapted to the different display configurations like smartphones, tablets, and desktops, this requires less work. Finally, using the SAAS model saves time and money on its support and maintenance for the same reason. Once implemented, updates can be pushed to the service and all of its users simultaneously, preventing edge-case issues affecting only a minority of them.

Disadvantages of SAAS

SAAS is not a perfect model; like any system, it has its disadvantages. However, these disadvantages are either shared by all cloud models, or negligible for eBay. Although connecting to a web service and using a web browser for all interactions with the system can be slow, compared to dedicated software, especially in areas with limited connectivity, an online auction is generally not a service where time is critical. Most importantly, eBay’s service needs to handle its users’ personal and financial information, such as addresses and payment details. This makes security breaches especially dangerous as they can cause significant damage. However, this disadvantage is true for any cloud model.

References

eBay. (2020). Our history. Web.

U.S. Securities and Exchange Commission. (2019). eBay, Inc. 2018 Annual Report (Form 10-K). Web.

NIBusiness. (n. d.). Advantages and disadvantages of Software as a Service (SaaS). Web.