COMPANY BACKGROUND:
Pierre Omidyar started eBay in 1995 as a place to trade novelty and collectible items. Ebay has since expanded to include a variety of items from electronics to Pez dispensers.
COMPETITION
Ebay competes against many small young Internet startup companies and several larger older ones. Some of them are Yahoo! Auctions, Amazon.com, ONSALE, ubid.com, and ECEC Auctions. Ebay's customer base is at 3.8 million as compared to Amazon's 8.4 million. In spite of the intense competition, eBay remains the largest online auction site.
COMPANY PRODUCTS
Ebay provides an online trading community for individuals to buy and sell goods through the use of auctions.
FUNCTIONALITY/VALUE
The primary value that eBay offers customers is that it provides them with a single online forum to bring together individual buyers and sellers. So if an individual wanted to sell an item, he or she can reach a collective market that is interested in purchasing that item without incurring significant advertising fees.
COMPANY'S VISION OF THE 21ST CENTURY ORGANIZATION:
Although eBay is primarily an online auction, eBay asserts they are an online community of users that enjoy much more than just buying and selling goods. Ebay believes they support a particular lifestyle where users can come together for a variety of needs.
HOW DO THE PRODUCTS AND SERVICES FIT INTO THIS VISION?
In addition to online auctions, eBay has chat rooms and cafes that support user interaction and communication.
The Extent to Which the Company has been a Success in the Marketplace (Relative to Its Major Competitors)
EBAY |
AMAZON |
INDUSTRY |
|
| PROFITABILITY (millions) | 2.4 |
-124.5 |
N/A |
| PRICE/EARNINGS | 2341.86 |
34.98 |
64.57 |
| CURRENT RATIO | 5.12 |
7.57 |
2.82 |
| DEBT TO EQUITY | N/A |
3.56 |
0.10 |
| GROSS MARGIN | N/A |
22.1 |
84.63 |
| OPERATING MARGIN | N/A |
9.87 |
35.46 |
| RETURN ON ASSETS | 2.60 |
-19.21 |
20.02 |
| RETURN ON EQUITY | N/A |
40.07 |
30.88 |
| REVENUE/EMPLOYEE | 623.026 |
290.476 |
499,383 |
| NET INCOME/EMPLOYEE | 31.579 |
-59 |
179,815 |
| STOCK QUOTE (6/04/99) | 168 1/2 |
108 7/16 |
N/A |
| 52 WEEK HIGH/LOW | 8 7/16 - 234 |
13 3/4 - 221 1/4 |
N/A |
Source: S&P Personal Wealth
BUY RECOMMENDATION
We would recommend a moderate buy on the stock for investors looking for growth stocks in their portfolio. Ebay has consistently beat investor expectations; however, in general the Internet sector is extremely volatile to fluctuations.