Q1: eBay is one of the only major Internet "pure plays" to consistently make a profit from its inception. What is eBay's business model? Why has it been so successful?
eBay's business model is a broker. One of the major reasons for its success is eBay's diversity. Over the past decade it has branched out into all different facets of facilitating transactions. eBay now offers listings at a fixed price, it has become involved with payment processing with the acquisition of paypal, it facilitates person to person communication with the acquisition of Skye and is also moving into the classified market with a 25% share of Craigslist (Rapper, 2008). eBay has not allowed it's self to become stagnate and has moved and grown with the demand for its service.
Q2: Other major web sites, like Amazon.com and Yahoo!, have entered the auction marketplace with far less success than eBay. How has eBay been able to maintain its dominant position?
Q3: What method does eBay use to reduce the potential for fraud among traders on its site? What kinds of fraud, if any, are eBay users most susceptible?
Through their security center eBay offers tutorials on safety procedures such as, identity safety, computer safety and how to avoid fraud. This center has a reporting tab where users can report fraud it also has a link that security software developers can click on and inform eBay if they have identified a security vulnerability.
In July eBay changed the way it charges for listing books and music. From what I understand the fee system is now a fixed system that takes less from the seller and makes it more viable for a seller to sell items that are sold at a lower cost.
Additional (optional) task: If not already a member, join eBay and explore the functions of the site (optional). Consider making a purchase, or perhaps try your hand at selling. Auctions are impacting on all aspects of business so it is useful to understand how they work.