eBay Focuses on a Strategy Shift
By Gerald Trites

For some years, eBay has recognized a need to change its strategy to accomodate the rapidly changing world of eCommerce. Initially, the stunning success of eBay could be attributed to the undeveloped state of eCommerce on the web at the time. Few people were buying on the web and even fewer companies offered their wares on the web. So eBay offered a unique means of buying and selling goods. In the early days, much of the ebay activity took place between individuals. In a quest for growth some years ago, eBay shifted its focus to bring in more commercial businesses, by establishing Marketplaces for different indistries and classes of goods. At the time, some observers recognized that such a move might turn off the more free spiritied, venturesome and generally younger users. However, they made an effort to prevent this from happening and moved ahead with a strong vendor oriented commercial strategy.

But eCommerce began to take hold among many companies, and the numbers of corporate websites that offered consumers the opportunity to buy over their websites grew dramatically. This meant competition for eBay's new commercial strategy, and indeed they have had some difficulty wth their strategy. In addition, Amazon got into the online auctioning business and sites like Kjijii and a variety of others offered real competition to eBay's traditional business. Moreover, eBay management over recent years has been subject to some criticism for alleged inaction on the key issues facing eBay.

Now, eBay is facing a new strategy change, with an intention to focus on Paypal for its growth. Interestingly, Paypa was originally acquired as an enhancement to eBay's core business by providing an easy method of mayment for the goods sold over the site. Now it could conceivably end up being the core business of eBay. See this article for an additional perpective.