Ebay Case Essay

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In February 2002, eBay paid 950 million to acquire Taiwan’s largest auction site Ubid and Bid, and then changing the name to Taiwan eBay in June 2002. However, a few months later, the company failed because the system of eBay did not fit in Taiwan and they could not compete the market share with Yahoo! Kimo Auction. In September 2006, Taiwan eBay decided to become joint venture with PChome and founded Ruten Auction website. The percentages of shareholders of the company are 65% and 35% for PChome and eBay respectively. Compared strengths and weaknesses of Joint Venture and Acquisition Joint Venture (Ruten(eBay)) | Strengths | 1 | Provide expertise to know the market in Taiwan | 2 | Share costs and risks with the partner | 3 | Access to the new market in Taiwan by working with local workers | Weaknesses | 1 | Take more time and efforts when they want to make a decision | 2 | Hard to share capital, expertise,investment, etc. | Acquisition (Yahoo!Kimo Auction) | Strengths | 1 | Take short time to make a decision | 2 | Increase market share | 3 | Overcome market entry barrier | Weaknesses | 1 | Hard to integrate between each organization | 2 | High cost | At the beginning of the period after joint venture, the company wanted to compete market share with Yahoo! by setting new strategies, no any charging fees for sellers for 3 years. That time, the company lost revenue around $2,144,000 per year. In December 2009, the company began to charge fee after sales, 1.5% of sale price and no higher than $5. After 3 months, the company could recover from loss and get the profit. Although eBay’s new CEO encourages entrepreneurship, we suggest eBay continue joint venture instead of acquisition in Taiwan because of two reasons. First, the e-commerce market in Taiwan is mature with many competitors. A joint venture can combine eBay’s

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