Online Product Markets: eBay and the Rest
RadicalBuy is seeking to challenge eBay by tapping into the large number of Facebook users to sell goods.
- market capitalization about $3.5 billion, Q4 2007 financials
- http://careerbuilder.com is owned by several newspapers
- http://hotjobs.com is owned by Yahoo!
Note that travel sites can operate a mix of retail and online market business models. When they buy flights or hotel rooms in bulk and re-sell they are retailing. When they simply provide a place for airlines and hotels to post prices they are acting as a marketplace.
Even Money (Lending) Markets
Zopa brings lenders and borrowers together (UK-based business)
Social networking sites are marketplaces for news about friends, family and acquaintances. They link providers of news to consumers of news.
Online business to business marketplaces were big news in the dotcom boom, but still exist today in different forms. Covisint was set up by major auto manufacturers to faciliate online purchasing. Ariba acquired FreeMarkets.com, a company that specialized in setting up online auctions for businesses so they can lower their procurement costs. The British government offers a guide to online marketplaces. otxi.com is an online marketplace for electronic components.
A business buying on an online marketplace needs to answer some questions:
- How do I know the supplier can deliver at the price, quantity, quality and timing they promise?
- Will competitors be able to see my purchasing information?
Online markets can generate revenue from commissions (eBay), charging for access (dating site subscriptions) and advertising (Facebook, Twitter).
Ellison and Ellison (2005)1 survey the impact of the internet on markets.