eBay
Memo
From: Dmitri Repnikov
Date: 12/1/2007
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Introduction
The purpose of this memo is to provide an understandable analysis of eBay, Inc., from an investor's standpoint. It will include the business background and its analysis. Following eBay's industry examination, a recommendation on eBay's stock is provided along with several valuations.
The Company
Situated in a fairly complex internet industry, eBay has managed to move from a small community to a multi-billion organization with 13,200 employees in barely ten years of existence. It was founded and headquartered in San Jose, California in 1995 with a vision to connect people, rather then sell them goods. eBay "pioneers communities built on commerce, sustained by trust, and inspired by opportunity. It also brings together millions of people every day on a local, national and international basis through an array of websites that focus on commerce, payments and communications" (eBay.com). By providing such a powerful online marketplace trafficking millions of buyers and sellers each day, eBay operates in three key sectors: marketplace, payments and communications. The marketplace refers to not only the notorious eBay.com, which includes both auction and fixed price set-ups, but other sites, such as shopping.com, rent.com and half.com. This marketplace would have long been in the dust since the internet bubble if it wasn't for its key savior, the feedback forum, which contains ratings and comments on buyers' and sellers' every transaction. Communities are built around trust and that is exactly what eBay has attempt ...