A Profile of eBay's Corporate Structure
The Now-Venerable Site Has Pivoted From Auctions to Online Payments And More
eBay is one of the world's premier online properties and the corporate home of a number of successful Internet brands. With nearly 100 million active users, eBay's core marketplace site hosts millions of retail and wholesale transactions in some 27 countries every day.
Core Businesses and Numbers
Headquartered in San Jose, California, eBay corporation has two core businesses: a payments business of which PayPal is the flagship brand and platform as well as a marketplaces business, of which the eBay is the flagship brand.
The company formerly had a third core business in the communications space with Skype, which it acquired in 2005 and built into a 500-million-user juggernaut. Skype is now owned by Microsoft.
Founded in 1995 by 28-year-old Internet entrepreneur Pierre Omidyar, eBay is now headed by president and CEO Devin Wenig. The company employs about 14,000 workers around the world as of mid-2018, when it cut about 1,000 employees globally in what it termed a "routine refocusing of priorities."
eBay was taken public in 1998 and by August 2018 enjoyed a market capitalization of approximately $33.66 billion. In the second quarter of 2018 alone, eBay's marketplace took in an estimated $23.63 billion in transactions, an impressive number although it reflects a gradual slowing in growth of the online retailer.
Its separately-traded PayPal division, however, is ticking along nicely as consumer acceptance of online transactions increases. Forbes estimated in March 2018 that PayPal's market capitalization, at $96.4 billion, was closing in on that of Goldman Sachs.
According to SEC filings, eBay's full-year revenue in 2017 added up to more than $9.5 billion, a growth of 7 percent from the previous year.
History, Strategy, and Market Position
eBay's position in the e-commerce, retail and payments landscapes continues to change as each of these sectors evolves. Created as an online auction site, eBay's 1998 IPO occurred during the fabled "dot-com bubble" era and was influenced by many of the forces that made many other technology and Internet IPOs infamous. eBay's initial $18 target price began a steady climb, reaching a recent high of $42.90 per share in January 2018.
eBay's revenue growth was initially 30 percent or more year over year, making eBay one of the breakout winners of the dot-com race. In recent quarters, however, year-over-year growth has slowed, with an increasing proportion of overall growth coming from its payments business and an ongoing process of reorganization and strategic change coming to characterize the marketplace business. Some of the difficulties in this sector are due to increasing competition from competitors, notably Amazon.com and Google.
In the years after the 2008 economic debacle, eBay has pivoted to a turnaround mode on the strength of new strategic orientations both in core businesses and marketplace platform structure, pricing, and policy. Changes in rules and fee structures at eBay are inevitably controversial, given that they impact millions of small businesses, buyers and part-time entrepreneurs around the globe. The company focus has been on developing its high-volume, fixed-price retail channel selling. This has alienated some in eBay's traditional communities of small sellers, second-hand merchandisers, collectors and hobbyists.
eBay's 2011 acquisition of GSI Commerce Inc. for $2.4 billion was eBay's largest acquisition since its acquisition of Skype, and signaled its move into development and operation of online sites for brick-and-mortar businesses. GSI has since been renamed eBay Enterprise, Inc. It now has some 500 clients, including familiar retail names like Ace Hardware and Dick's Sporting Goods.
Sustainability and Giving
eBay's Giving Works program has become known for enabling socially-conscious development and philanthropy around the world. Key beneficiaries have included MicroPlace, the global micro-finance platform, sustainable and fair trade trading platform WorldofGood.com, and the eBay Foundation's own Opportunity Project, which seeks to support market-driven development and anti-poverty innovation.
eBay's holdings and partnerships continue to influence eBay's trajectory for better and for worse. In addition to PayPal they include BillMeLater, StubHub, Shopping.com, Half.com, ProStores, Rent.com, eBay Classifieds, Kijiji, brands4friends, Gumtree, Milo.com, and RedLaser. eBay also maintains partnerships with Skype, MercadoLibre, Craigslist, ChannelAdvisor, EachNet, mFoundry, Union Mobile Pay, and others.
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