Pierre Omidyar: A Story of A Successful Entrepreneur and His Entreprise

PIERRE OMIDYAR & HIS
A STORY OF A SUCCESSFUL ENTREPRENEUR

AND HIS ENTREPRISE
An effort by:
Lovely Rani (15)
Prithu Kant Jha (21)

PIERRE OMIDYAR
 Omidyar born in Paris, on 21 June, 1967
In France to Iranian immigrant parent.
 Grown up in Washington, D.C
 Graduated with a degree in computer
science from Tufts University, in 1988.
PIERRE OMIDYAR
PIERRE OMIDYAR
 worked for Claris, an Apple Computer subsidiary
 In 1991, co-founded Ink Development, a pen-based computing startup that

was later rebranded as an e-commerce company and renamed eShop.
 156th richest person in the world with net worth of US$ 5.5 Billion.
HOW IT ALL STARTED?

 The online auction website was founded as “AuctionWeb” in San Jose,
California, on September 3, 1995, by Pierre Omidyar as part of a larger
personal site
 eBay began as an act of love, invented by Pierre Omidyar as a way for his
fiancee, Pam (now his wife), to trade Pez dispensers with other collectors.
 ChrisAgarpao was hired as eBay's first employee and Jeffrey Skoll was
hired as the first president of the company in early 1996.
ORIGIN OF EBAY.COM
 Originally,
the site belonged to Echo Bay Technology Group, Omidyar's
consulting firm.
 Omidyar tried to register the domain name echobay.com, but found it

already taken by the Echo Bay Mines, a gold mining company,
 So he shortened it to his second choice, eBay.com.

THOUGHT
 Beyond the technology, Omidyar envisioned the site as a community,
based on five main values:
 People are basically good.
 Everyone has something to contribute.
 An honest, open environment can bring out the best in people.
 Everyone deserves recognition and respect as a unique individual.
 You should treat others the way you want to be treated.
HISTORY
 Sept 3, 1995 – incorporated in San Jose
 Skoll, Omidyar’s partner joined him as first president.
 1997 – Meg Whitman, joins as CEO.
 Sept. 1998 – eBay first IPO. $18 per stock.

COMPANY OVERVIEW
 An online auction platform that facilitates transaction between buyers and
sellers of goods and services.
 With more than 534 million active users globally, eBay is the world's
largest online marketplace.
 Total Workforce – 15,500

MISSION & VISION
eBay’s Vision is to provide a global online trading

platform where practically anyone can trade
practically anything
INDUSTRY INFORMATION
 Total value of global e-commerce transactions - $657 billion
 B2B auction transaction growth from 98 to 2OOO was $8

billion to $52 billion
 Increased awareness among users towards the potential of
internet as a trading platform
BUSINESS MODEL
 Seller uploads the picture and description of the item to be sold.
 Sale ends at predetermined time.
 Highbidder and seller contact each other and make arrangements of

shipment.
 Buyer sends funds to seller {money order, check, PayPal}, seller sends
goods.
 Buyer and seller then grade each other through feedback forums.
REVENUE MODEL AND PROFIT

 Fees
for the seller to post the item, any promotion activities and final sale
commission.
 Advertising revenue 2% of Total Revenue
 Selling profit is approx 9% of Total Revenue
 Majormoney comes from listing and trading services -89% of Total

Revenue
VALUE PROPOSITION
 Buyer
 Massive Selection
 More convenient
 Saves time and money
 Value added
 Seller
 Broadens market
 Lower Distribution Cost
 Maximize selling price
 Repeat business and clientele

SLOGANS
 Connecting buyers and sellers globally
 Come to think of it, eBay.
 What ever it is, you can get it on eBay.
 Shop victoriously!
 From collectibles to cars, buy and sell all kinds of items on eBay
 Buy it, sell it, love it

THE GROWTH
 1997 –
 the revenue hit $5.7m
 1998 –
 Acquires Jump, Inc., the developer and operator of Up4Sale, an online trading
service
 Special strategic alliance with AOL. Revenue grows 724%
 1999 –
 acquiresKruse, Inc., a company that conducts auctions
 Acquires Billpoint, Inc., a firm that develops centralized payment solutions
 eBay goes online in the United Kingdom and Canada.
GROWTH CONT.
 2000 –
 acquires Half.com Inc.
 2003 –
 Transactions for the year near the $20 billion mark. Sales exceed $2 billion.
 2004 –
 International expansion in India-bazee.com and Germany.
 2005 –
 buys shopping.com and places a bid for skype.com
FINANCIALS
 Apresence in over 20 countries internationally contributes to 40% of total
revenue.
 Maincompetitors, Yahoo! and Amazon have seen 65% and 61% revenue
growth respectively over 6 year period from ‘98 to ‘03
 eBay’s ’98 revenue was 47.4 million; ’03 jumped to $2.1 billion,
 134% average increase over previous year.

EBAY’S REVENUE
ANNUAL REVENUE (IN BILLION USD)
10
8
6
4 ANNUAL REVENUE (IN
2 BILLION USD)
0
1998 2006
2007 2008 2009
ACQUISITION OF PAYPAL
 PayPal uses existing electronic infrastructure of bank accounts and
credit cards to allow “small” monetary exchanges online.
 Itsconvenient for small businesses and individuals, because they can

collect online payments without difficult set-up.
 eBay acquired PayPal in 2002 and has integrated it throughout its website
as a payment option for auctions.
VELOCITY OF TRADING
 Processes a Pocket PC in UK very six minutes.
 Mobile phone every 3O seconds in Germany.
 A Volkswagen is sold every 25 minutes in Germany.

THREATS OR ISSUES
 Bargaining power of suppliers.
 Substitutes product or services such as business-to-business, business-to-

customer service providers.
 Increasing competition from Amazon and yahoo.
 No barrier to entry in the industry.
 Buyer-seller frauds
 Technology failure or/and change

ISSUE OF PRIVACY AND TRUST

 EBay’s view and approach
 Trust is facilitated by fair information and principles
 Users should be provided with notice and communication, choice and
control, security, authentication and enforcement
 eBay has earned this trust in time by consistent service.
EBAY’S FOLLOW UP
 Target key product categories for special users.
 Continue developing community tools.
 Enhance the community for women and senior citizens.
 Stress on adding services and features to make trading easier.
 Expand value added services.
 Major focus on trust and safety programs
 Maximum transparency.
EBAY'S TACKLE OF SECURITY

 Feedback forum- check the business practices or reputation of any buyer or
seller on eBay.
 Escrow- inspection of the product purchased before payment is being sent.
 Fraud protection program- coverage of users up to $2OO.
 Verified rights owner program- make sure that items do not violate
intellectual property rights.
 Neutral dispute resolution options.

POPULAR SUBSIDIARIES
 Half.com- offers an organized online market place to buy and sell high
quality previously owned mass market goods.
 EBaystores- expands the market place for sellers by allowing them to

customize shopping destination to merchandise their products.
 EBay motors - Internet’s largest auction place to buy anything automotive.

SUBSIDIARIES SERVICES
 EBay professional services- serving fast growing marketplace by providing
a destination on eBay to find professionals.
 Ebaylocal trading- allow users to browse items near them and browse
through local interests.
 Ebay premier- showcases fine art, antiques, fine wines and rare
collectibles from leading auctions and dealers.
 Ebay live auctions- real time bidding on items being sold on sale floor.
COMPETITION
 Online Competitors-
 Amazon
 Yahoo
 Traditional stores
 Wal-Mart
 Macy’s
 Home Depot
EBAY VS COMPETITION- FACTS

 eBay had great first mover advantage and brand name establishment in
the U.S.
 In the International markets though, Yahoo moved in first and EBay is

suffering from that still.( Japan and other south Asian markets)
 Amazon and yahoo stole most of the market share during three ebay
crashes during 99.
 EBay does have its supremacy in the U.S. with yahoo, Amazon and Google
following leaders.
WHY PEOPLE GO TO EBAY.COM?

 Network effects
 Sellers want to sell their item on the auction service with the most buyers,
so they put their items up for sale on eBay.
 Buyers want to find the best prices with many sellers, so they go to eBay.
 Economies of scale
 Cost allocation over broader range of transaction being processed.
 Customer Retention
 Why would a customer would want to leave the biggest trading platform?
 Excellent opportunity to find similar interest sellers and buyers.
REASON FOR SUCCESS

 Mature and diverse board of directors –
 7 outsiders, 1 insider, 1 related insider
 Strong management team lead by John Donahoe, President & CEO.
 Senior staff consists of experienced managers from companies such as

PepsiCo and Disney with an average of 20 yrs. of business experience and a
strong vision for the company.
 Brand name development – eBay has carefully developed a brand name based
on ease and trust. They have created the defacto online trading
platform.
PEOPLE WHO LED IT TO SUCCESS
PIERRE OMIDYAR JOHN DONAHOE

FOUNDER & CHAIRMAN CEO & PRESIDENT
(2008-PRESENT)
MEG WHITTMAN JEFFREY SKOLL

CEO & PRESIDENT FIRST PRESIDENT
(1998-2008)

Pierre Omidyar: A Story of A Successful Entrepreneur and His Entreprise

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Pierre Omidyar: A Story of A Successful Entrepreneur and His Entreprise

Uploaded by

Copyright:

Available Formats

PIERRE OMIDYAR & HIS

A STORY OF A SUCCESSFUL ENTREPRENEUR

Lovely Rani (15)

Prithu Kant Jha (21)

In France to Iranian immigrant parent.

 Grown up in Washington, D.C

 Graduated with a degree in computer

science from Tufts University, in 1988.

 In 1991, co-founded Ink Development, a pen-based computing startup that

HOW IT ALL STARTED?

 Omidyar tried to register the domain name echobay.com, but found it

 So he shortened it to his second choice, eBay.com.

 Skoll, Omidyar’s partner joined him as first president.

 1997 – Meg Whitman, joins as CEO.

 Sept. 1998 – eBay first IPO. $18 per stock.

 Total Workforce – 15,500

MISSION & VISION

eBay’s Vision is to provide a global online trading

 B2B auction transaction growth from 98 to 2OOO was $8

 Sale ends at predetermined time.

 Highbidder and seller contact each other and make arrangements of

REVENUE MODEL AND PROFIT

 Advertising revenue 2% of Total Revenue

 Selling profit is approx 9% of Total Revenue

 Majormoney comes from listing and trading services -89% of Total

 Repeat business and clientele

 Come to think of it, eBay.

 What ever it is, you can get it on eBay.

 Buy it, sell it, love it

 134% average increase over previous year.

 Itsconvenient for small businesses and individuals, because they can

 Mobile phone every 3O seconds in Germany.

 A Volkswagen is sold every 25 minutes in Germany.

 Substitutes product or services such as business-to-business, business-to-

 Increasing competition from Amazon and yahoo.

 No barrier to entry in the industry.

 Technology failure or/and change

ISSUE OF PRIVACY AND TRUST

 Continue developing community tools.

 Enhance the community for women and senior citizens.

 Stress on adding services and features to make trading easier.

 Expand value added services.

 Major focus on trust and safety programs

EBAY'S TACKLE OF SECURITY

 Escrow- inspection of the product purchased before payment is being sent.

 Fraud protection program- coverage of users up to $2OO.

 Neutral dispute resolution options.

 EBaystores- expands the market place for sellers by allowing them to

 EBay motors - Internet’s largest auction place to buy anything automotive.

EBAY VS COMPETITION- FACTS

 In the International markets though, Yahoo moved in first and EBay is

WHY PEOPLE GO TO EBAY.COM?

REASON FOR SUCCESS

 Strong management team lead by John Donahoe, President & CEO.

 Senior staff consists of experienced managers from companies such as

PEOPLE WHO LED IT TO SUCCESS

PIERRE OMIDYAR JOHN DONAHOE

MEG WHITTMAN JEFFREY SKOLL

You might also like