eBay - Staying Online - Always

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Case Details:

Case Code : ITSY015
Case Length : 08 Pages
Period : 1995-2001
Pub Date : 2002
Teaching Note : Available
Organization : eBay
Industry : Information Technology Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Background Note

eBay's founder Pierre Omidyar (Omidyar) felt that an Internet auction site could create a highly efficient market. The idea seemed to have originated out of the difficulty that his fiancee faced while trying to collect Pez dispensers from the San Francisco Bay area.

Omidyar launched Auction Web (the site's domain name was ebay.com) in September 1995 to enable people to trade.

eBay started as a free website and quickly attracted so much traffic that Omidyar needed additional infrastructure to keep pace with the growing business...

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Technology

eBay's infrastructure, built in 1995, was initially designed in-house to support buying and selling between small groups of collectors and hobbyists. The company used Pentium based Internet servers that ran on Windows NT operating system. For Internet connectivity, it had entered into a partnership with Exodus and AboveNet Communications located at Santa Clara in California...

Reaping the Benefits

The fact that auctions were relatively static events (until the final few minutes when lot of bids could often put a major hit on its servers and apps) was the biggest challenge for eBay.

According to industry experts, eBay's decision to opt for a more distributed application infrastructure had reduced the load on its infrastructure.

Besides, the software developers had more flexibility to change the codes without affecting the entire application.

Exhibits

Exhibit I: eBay's Auction Process
Exhibit II: Consolidated Statements of Income

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