Chapter 11 Ecommerce

Mainstream news vs fake news

Fake new increased heavily and surpassed mainstream (decreasing) in summer 2016 leading up to the election

EBay's market position in auction market

market leader

auction shortcomings

o Delayed consumption o Bid monitoring effort/time ♣ Possible solutions include fixed pricing o Equipment/web access costs o Fraud ♣ Possible solution—rating systems ♣ Risks on both side: merchants too. (non-payment, false bidding, bid rigging, etc.) o Fulfillment costs - pack, ship, insure o Merchants are often the victims!

The difference between English and traditional Dutch auctions

o English auctions: ♣ Single item up for sale to single seller ♣ Highest bidder wins o Traditional Dutch auction: ♣ Uses a clock that displays starting price ♣ Clock ticks down price until buyer stops it

What percent of Facebook users are 35 and over

50%

top social networks account for what percent of social network activity?

90%

Facebook storage

- 180,900 servers - Facebook stores 250 billion images

Be generally familiar with the amazingly fast establishment of Facebook and the general magnitudes of the increases and adoption.

o In 2003, Harvard had facebooks for residential houses: Zuckerberg notices o Zuckerberg finished original "thefacebook" Feb 4, 2004 (from "Facemash" from Oct 23, 2003) o By late February 2004, 10,000 users registered o Within 2 weeks 2/3 of Harvard was using it o March 2004: Zuckerberg launches facebook at Yale, Columbia, and Stanford o Stanford and Yale: Half to two-thirds of the schools adopted it in the first week or two o When launched at Dartmouth, half the school signed up in one night o By June 2004, spread to 30 colleges, 150k users o Oct 2005: 5 million users o July 2010: 500 million users o And now: o Facebook- 1.79 Billion Active Users in 3rd quarter of 2016

Auction benefits

o Liquidity o Price discovery o Price transparency o Market efficiency o Lower transaction costs o Consumer aggregation o Network effects

benefits to the market-maker

o No inventory o No fulfillment activities ♣ No warehouses, shipping, or logistical facilities o eBay makes money from every stage in auction cycle ♣ Transaction fees ♣ Listing fees ♣ Financial services fees ♣ Advertising or placement fees ♣ The only tech stock I've ever invested in

7 Facebook Statistics your book didn't know

o Photo posts get 39% more interaction o Shorter posts get 23% more interaction o Using emoticons increases comments by 33% o Engagement rates on Thursday and Friday are 18% higher o (part 1) Question posts get double the comments; fewer likes and shares o (part 2) Certain types of questions get more comments o 35% of Facebook fans "Like" a page to participate in contests ♣ "Caption this photo" contests bring in 5.5 times more comments than regular posts o 42% of Facebook fans "Like" a page to get a coupon or discount

Dutch auction

♣ Public ascending price, multiple units ♣ Final price is lowest successful bid, which sets price for all higher bidders

Who is unhappy in an auction and why

♣ Winner's regret ♣ Seller's lament ♣ Loser's lament