Question

In: Economics

Two companies (Craigslist, Ebay, etc) who are vying for a piece of the online rental market....

Two companies (Craigslist, Ebay, etc) who are vying for a piece of the online rental market. For each of those companies, what are the prospects, and why?

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Expert Solution

Companies like Craigslist and Ebay are examples of online marketplace. It is a type of online marketing which connects buyers and sellers through website or mobile application These companies came into existence in 1995 when Internet was gaining popularity

Companies like Craigslist come under ad-based marketplaces. They charge suppliers for premium placements and suppliers are listed under these marketplaces suppose anyone wants to search the restaurants then he can go to yelp and search. Then the list of 10 restaurants are shown in the area. The major prospects can be the businessman. This is because they are able to pay premium and can purchase space at the top of the ad. In this way they will get more exposure.

Companies like Ebay come under transactional marketplaces. They can gain money only if a transaction occurs. Whenever suppliers make money, they have to pay in this case In some cases the transactional marketplaces process the transaction and pay money to the sellers after deducting fees and commissions. In order to increase its prospects, Ebay has introduced the system of seller Hub. Under this system, the seller may see analytical data to increase revenue. In order to beat Amazon prime service , it introduced eBay + so as to provide same day delivery It has also introduced feedback system to get reviews from customers  


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