Digital Media Design

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Digital Media Design

Digital Media Design

A Brief History of the Growth of eBay

One of the world's most famous dot-coms was founded as AuctionWeb in San Jose, California, on September 3, 1995, by French-born Iranian computer programmer Pierre Omidyar. This was 1995 when the World Wide Web or 'information superhighway' as it was known, was just a few years old. On September 12, Pierre Omidyar posts a list of the non-computer related items that are available on his new Auctions Website to the newsgroup; just nineteen items which include a Marky Mark's signed underwear and a Yamaha motorcycle.

By the following February, the website had become a popular place with 10,000 registered users. “The site has become more popular than I ever expected”, Pierre posted on the website's forum, “and I began to realise this was indeed a grand experiment in Internet commerce”. (Peel, 2006)

Having been on an upward curve, 1997 was a rollercoaster year. The one-millionth item was sold, and AuctionWeb officially changed its name to eBay (short for Echo Bay Technology Group, Omidyar's consulting firm).

eBay went public on September 21, 1998, and Omidyar became an instant billionaire. Currently, eBay comprises for three main businesses, or as the previous CEO Whitman calls 'the power of three' strategy:

The eBay Marketplace: eBay describes this as “online platform for the sale of goods and services by a passionate community of individuals and small businesses” where “anyone can buy anything.”

PayPal: Acquired by eBay in 2002, PayPal aims to “create a new global standard for online Payments” and enable “any individual or business with an email address to securely, easily and quickly send and receive payments online.”

Skype: Skype, bought by eBay in 2005, is an internet communication company whose aim is to “people everywhere to make unlimited voice and video communication for free between the users of Skype software.”

Today, eBay is a phenomenon whose size and magnitude is almost difficult to comprehend. The number of registered users on eBay by the end of 2008 was approximately 406 million, rising from 276 million the previous year. eBay also generated net revenue worth $8.5 million in the year 2008, compared to $7.6 million the previous year, and just $3.3 million in 2004. However, over the years, the ecommerce company has been experiencing slowing growth, and now declining revenue, as illustrated by the graph below (Kelleher, 2009).

Figure 1

This is also represented in the financial reports, where the company posted fourth quarter revenue of $2.04 billion. This represents a $145 million year-over-year decrease which they relate primarily to the impact on eBay “of a stronger dollar and macroeconomic conditions globally” (eBay Inc. Fourth Quarter and Full Year 2008 Results, 2009).

Characteristics of the digital media and the Internet

E-commerce is the trade of products and services by means of the Internet or other computer networks.

To understand the growth and success of eBay as an ecommerce website, one must be aware of the characteristics and advantages of the digital media and the ...
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