eBay 1998 Annual Report Download - page 6

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6
assistance from eBay personnel and other eBay users and by providing “About Me” user pages and community
features that are designed to encourage consumer loyalty and repeat usage.
Intuitive User Experience. The eBay service is a fully automated, topically arranged, intuitive and easy-to-use
online service that is available on a 24-hour-a-day, seven-day-a-week basis. Within minutes of completing a simple
online form, a seller can list items for sale on the service, and buyers can submit bids for items quickly and easily.
Buyers can easily search the hundreds of thousands of items listed by category or specific item. During the course of
the auction, bidders are notified by email of the status of their bids on a daily basis and are notified immediately if
they are outbid. Sellers and successful bidders are automatically notified when an auction is completed. To assist
users further, the Company offers customer support via email, staffed on a 24-hour-a-day, seven-day-a-week basis.
eBay Strategy
The Company’ s objective is to build upon its position as the world’ s leading online person-to-person trading
community. The key elements of eBay’ s strategy are:
Expand the eBay Community and Strengthen the eBay Brand. The Company believes that building greater
awareness of the eBay brand within and beyond the eBay community is critical to expanding its user base and to
maintaining the vitality of the eBay community. Although the Company’ s historical growth has been largely
attributable to word of mouth, the Company has introduced aggressive marketing efforts to build its user base and its
brand name. In October 1998, the Company launched a substantial ongoing national advertising campaign, both in
traditional media and online, that is designed to attract new eBay users. The campaign has included advertising in
targeted publications, strategic advertising and sponsorship placements on high traffic websites, a major radio
advertising campaign and active participation in other forums such as selected trade shows. The Company has
benefited from frequent and high visibility media exposure both nationally and locally. In August 1998, the
Company entered into a three-year marketing relationship with AOL whereby eBay will be prominently featured in
areas of AOL’ s proprietary service and on AOL.com. In March 1999, the Company expanded the scope of its
strategic relationship with AOL. Under this new four-year agreement, eBay will be given a prominent presence
featuring it as the preferred provider of person-to-person trading services on AOL’ s proprietary services, AOL.com,
Digital Cities, ICQ, CompuServe and Netscape. The Company is focusing on reinforcing its brand within the
existing eBay community through marketing programs on the eBay website and sales of eBay-branded merchandise.
See “Marketing.”
Broaden the eBay Trading Platform. The Company intends to pursue a multi-pronged strategy for growing
the eBay platform within existing product categories, across new product categories and regionally. The Company
will target key product categories in its user programs and marketing activities. The Company has expanded and
developed existing product categories by introducing category-specific bulletin boards and chat rooms, integrating
category-specific content, advertising its service in targeted publications and participating in targeted trade shows. In
addition, the Company intends to broaden the range of products offered on its trading platform by seeking to attract
new users from the general audience of Internet users and adding product categories, content and other services or
features to meet this new user demand.
Foster eBay Community Affinity. The Company believes that it has developed the largest and one of the most
loyal person-to-person trading communities on the Web and that enhancing the eBay community experience will
help the Company foster further growth and a greater sense of loyalty among eBay users. The Company seeks to
maintain a critical mass of frequent buyers and sellers with a vested interest in the eBay community so that sellers
will continue to be attracted to the service by the large number of potential buyers and buyers will be attracted to
eBay by the large number of items listed by these sellers. The Company’ s recent trust and safety initiatives,
including user verifications, insurance, integrated escrow and authentications and appraisal, are intended to bolster
eBay’ s reputation as a safe place to trade. Consistent with its desire to foster community, the Company has
organized a charitable fund, known as the eBay Foundation, and intends to involve the members of the eBay
community in determining to which charitable purposes the eBay Foundation’ s funds will be applied. See “—The
eBay Service—Community Services.”