ECONOMICS - E-COMMERCE

Electronic Commerce and Applications

Electronic Commerce and Applications

Assignment 1

Amazon.com

In this study, we have analyzed two e-commerce companies that are Amazon and eBay. Amazon.com is the international electronic e-commerce company, and its headquarters are located in Seattle, Washington, U.S. Amazon is considered as the largest retailer in the world. Amazon business was started primarily as an online bookstore, but after some time, it was diversified into selling VHS, DVDs, video, CDs and MP3 streaming/downloads, video games, furniture, toys, jewelry, food, apparel, software and electronics. This company is also engaged in producing the consumer electronics i.e. Kindle Fire tablet computer and Amazon Kindle e-book reader. Amazon is the major provider regarding the services of cloud computing on the internet.

Amazon continues to be one of the leading online retailers in the world. In a recent survey of the US's top 40 online retailers which reviewed customer satisfaction levels, Amazon came top of the list. It seems that online specialists continue to perform better than their multichannel rivals, and US companies outshine their British counterparts (Lutz 2012).

eBay Inc.

eBay Inc. is the multinational corporation of internet consumer-to-consumer based on America. The headquarters of eBay is located in the California, United States. It was mainly founded in 1995. eBay brought a successful story related to dot-com bubble. Presently, eBay is considered as the multi-billion dollar business with the operations that are localized over 30 countries. The website of eBay is managed by the company and it reflects an online auction and shopping website where businesses and individuals are able to buy and sell a wide variety of commodities and services around the globe. It also introduced auction style selling, online classified advertisements, online money transfers, online event ticket trading and other services (Lucking-Reiley et al. 2007, p.228).

In 1998, the company went public. It had target share of $18 which jumped to $53.50 right on the first day of operation. In the beginning of 2008, the company had already developed globally. It had millions of registered customers, over fifteen thousand employees and revenue of approximately $7.7 billion. In the meanwhile, Whitman decided to leave the company due to his inclination towards politics. John Donahoe became the president and CEO. Whitman remained associated with e-Bay and continued to Donahoe as a part of Board of Directors till the end of 2008 (Cabral and Hortacsu 2010, p.65).

Revenue Model

Amazon.com has achieved the growth by tremendous rate along with revenues i.e. rising from 150 million dollars in 1997 to 3.9 billion dollar in 2002. Although, the rise in the total revenue led to a great increase in the operational losses, and the company had a deficit by the end of 2002 (i.e. cumulative losses and it exceeded of 3 billion dollar.

Source: http://www.businessinsider.com/dear-facebook-employees-heres-the-truth-about-your-stock-price-2012-8

On the other side, eBay had a slower growth path, but focused. The main and core business of the company has always been a single i.e. auctions. eBay company has achieved the growth in a very short time and it is still a smaller company ...