Ebay NetworkThe Ebay Network
iBay - Le magasin parfait d'effets de réseau - Digitale Innovation und Transformation
Network-related factors - and especially indirectly network-related factors - play a key part in eBay becoming the dominating actor in the new era of on-line auctioning in the 1990s. By setting up the site with the most vendors and the broadest range of products, eBay was able to draw the most shoppers, which in turn drew more vendors, and so on.
Of course, this is the next one - the growth of your network of players as quickly as possible at the beginning, as gambling catch-up may not be an optional activity, even with an equivalent product/service. Prior to eBay being founded, the eBay was operated as AuctionWeb. Omidyar's choice to provide the free trial for the first 5 month was an important step in gaining a first user basis.
"If you want to create the network effect, don't just do it by chance, do it yourself" - subsidising your own user base to get high and rapid acceptance was one way in which eBay reached a critically high level of user acceptance. eBay was keen to build the right communities and generate verbal propaganda by gatherers and amateurs.
In 1997, after eBay received $6.7 million from Benchmark Capital, eBay also began targeting it. At the beginning, however, the active promotion of eBay's communities was crucial for strengthening oral propaganda and not just making it inorganic. eBay's strategies are PayPal, eBay classified ads and StubHub. The development of these complimentary products will help to enhance the "stickiness" of the whole site and win new visitors who might come in as a result of one of the additions.
In March 2002, just after entry into China via EachNet, eBay had an 80%hare. Taobao's website went live in May 2003, questioning the then-popular eBay, and in 2006 eBay was totally erased when it was decided to close. An important factor that should be mentioned here is that eBay got into the scheme with the same charges it had previously introduced in the US, while Tao Bao made all service free.
A few thought-provoking ideas about the possibility of subsidising user.