Businessmodel Community

Ebay & Community

eBay is a community where we encourage open and honest communication between all of our members. We believe in the following five basic values.

• We believe people are basically good.
• We believe everyone has something to contribute.
• We believe that an honest, open environment can bring out the best in people.
• We recognize and respect everyone as a unique individual.
• We encourage you to treat others the way that you want to be treated
(Ebay, 2012)

eBay was founded on the principle that people are basically good. (eBay site) It’s community is fundamental to Internet commerce by the pure volume of knowledge that it’s members have. “Trading is based on trust among members of its community, and trust is supported by a multilateral reputation mechanism based on user feedback.” (Baron 2001) Feedback is important to how eBay is governed as it provides information to traders but is also used as a form of “punishment”. (Baron 2001) The major objective for eBay’s community is to achieve order amongst its members and in doing so “trust each other and realize the gains from trade”. (Baron 2001) As buyers and sellers are anonymous and transactions are often infrequent, feedback offers a sustainable way for traders and buyers to maintain reputations.


eBay began life as a site selling Pez Dispensers and it was the creators desire to discourage people wanting to sell other items that saw him start charging people to sell on his site. The early eBay years saw traders form “neighborhood watch groups to police their trading areas” (Baron 2001) One such group, made up of six members calling itself “the Posse” monitored activity and those that did not meet standards set by this group, found their reputations damaged. Communication was exchanged through “email and on bulletin boards.” (Baron 2001)

Community is fundamental to the economic success of eBay in that much of the day-to-day work necessary for everyday functioning is carried out voluntarily. (Lillie 2006) “eBay makes every effort to conceptualize its members as a community (as opposed to, say "customers" or "clients").” (Rappa 2008) eBay members are very knowledgeable (Howells 2000 cited in Flew 2008) and do much of the groundwork, answering questions about buying, selling and numerous other enquiries along with managing personalities to ensure eBay runs smoothly. This leaves eBay employees free to maintain the website and focus on auction software. (Lillie 2006)

Kevin Kelly states that the “new economy is often referred to as the information economy, because of information’s superior role (rather than material resources or capital) in creating wealth.” (1997) The knowledge accumulated by eBay’s community since it was founded in 1995, would be difficult to put a monetary value on, with eBay’s share price having risen as much as ten percent in the past few months. (Mukherjee, 2012)

EBay’s communities are varied and encompass different interests of the wider community with many of the boards encouraging users to build the communities that are fundamental to eBay’s economic success. There are communities based on trading, buying, hobbies and fun and games to name just a few. There is a social community that does not allow any business talk and discussions include parenting, religion and politics amongst other topics.

EBay communities play a unique role in the Internet networked communities as opposed to the pre-internet economy. Trust is based on member feedback encouraging a community of collaboration and communication amongst its users. Members are producers of knowledge and share this with the wider community and this knowledge base is an asset to eBay. Its community members have a sense of ownership as their volunteer labor benefits themselves as well as eBay.


Baron, David. (2001) Research Paper No. 1709. Private Ordering on the Internet: The eBay Community of Traders. Graduate School of Business, Stanford University

Ebay. (2012). Who We Are, 2012, from

Flow, T. (2008) Introduction to New Media. In New Media: An Introduction (3rd ed, pp. 1-37). New York: Oxford(2010) Community Overview. Retrieved July 6,2010, from

Kelly, Kevin. (1997, September). New Rules for the New Economy: Twelve Dependable Principles for Thriving in a Turbulent World. Wired. from:

Lillie, J. (2006) Immaterial Labour in the eBay Community. The Work of Consumption in the ‘Network Society’. In Everyday eBay: Culture, Collecting and Desire New York Routledge.

Mukherjee, Arpita. (2012, July 19) Analysts upbeat on eBay, shares soar. Reuters

Rappa, Michael. (2008) Managing the Digital Enterprise. Case Study: Ebay From:

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