Origins and early history

Founded in San Jose on September 4, 1995 by Pierre Omidyar and Jeff Skoll as Auctionweb, part of a larger personal site that included, among other things, Omidyar's own tongue-in-cheek tribute to the Ebola virus.

The first item sold was Omidyar's broken laser pointer for $14.83. Astonished, he contacted the winning bidder and asked, "did he not understand the laser pointer was broken?" Omidyar received the following email in reply: "I'm a collector of broken laser pointers." (The frequently repeated story that eBay was founded to help Omidyar's fiancee trade PEZ Candy dispensers was fabricated by a public relations manager in 1997 to interest the media. This was revealed in Adam Cohen's 2002 book and confirmed by eBay.)

It officially changed its name to eBay in September 1997. Originally, the site belonged to Echo Bay Technology Group, Omidyar's consulting firm. Omidyar had tried to register the domain name EchoBay.com but found it already taken by the Echo Bay Mines, a gold mining company, so he shortened it to his second choice, eBay.com.

Items and services

Millions of collectibles, appliances, computers, furniture, equipment, vehicles, and other miscellaneous items are listed, bought, and sold daily. Some items are rare and valuable, while many others are dusty gizmos that would have been discarded if not for the thousands of eager bidders worldwide, proving that if one has a big enough market, one will find someone willing to buy anything. Anything can be sold as long as it is not illegal or on the eBay banned list. Services and intangibles can be sold too. It is fair to say that eBay has revolutionized the collectibles market by bringing together buyers and sellers internationally in a huge, never-ending yard sale and auction. Large international companies, such as IBM, sell their newest products and offer services on eBay using competitive auctions and fixed-priced storefronts. Regional searches of the database make shipping slightly more rapid or cheaper. Software developers can create applications that integrate with eBay through the eBay API by joining the eBay Developers Program. As of June 2005, there were over 15,000 members in the eBay Developers Program, comprising a broad range of companies creating software applications to support eBay buyers and sellers as well as eBay Affiliates.

In June 2004, eBay prohibited the sale and auction of both alcohol and tobacco products on the British site ebay.co.uk. Some exceptions to this rule are made for rare aged liquors, where a bottle may sell for many times higher than its actual value in alcohol.

There has also been controversy regarding items put up for bid that violate ethical standards. In late 1999 a man offered one of his kidneys for auction on eBay, attempting to profit from the potentially lucrative (and, in the United States, illegal) market for transplantable human organs. On other occasions, people and even entire towns have been listed, often as a joke. In general, the company removes auctions that violate its terms of service agreement within a short time after hearing of the auction from an outsider; the company's policy is to not pre-approve transactions. eBay is also an easy place for unscrupulous sellers to market counterfeit merchandise, which can be difficult for novice buyers to distinguish without careful study of the auction description.

eBay's Latin American partner is MercadoLibre.

eBay's main rivals are Amazon.com Marketplace and Yahoo.com Auction.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Profit and transactions

A screenshot of eBay's front page.

eBay generates revenue from a number of fees. There are fees to list a product and fees when the product sells. The eBay fee system is quite complex and takes $0.20 to $80 per listing and 3-5% of the final price. In addition, eBay now owns the PayPal payment system which has fees of its own.

The company's current business strategy includes increasing revenue by increasing international trade within the eBay system. eBay has already expanded to almost two dozen countries including China and India. The only place where expansion failed was Japan where Yahoo had a head start.

Acquisitions

• In May, 1999, eBay acquired the online payment service Billpoint, which it shut down after acquiring Paypal.
• In 1999, eBay acquired the auction house Butterfield & Butterfield, which it sold in 2002 to Bonhams.
• In 1999, eBay acquired the auction house Alando for $43 million, which changed then to eBay Germany.
• In June, 2000, eBay acquired Half.com, which was later integrated with the eBay Marketplace.
• In August, 2001, eBay acquired Mercado Libre, Lokau and iBazar, Latin Americas auction sites.
• In July, 2002, eBay acquired PayPal, for $1.5 billion in stock.
• On July 11, 2003 eBay Inc. acquired EachNet, a leading ecommerce company in China, paying approximately $150 million in cash.
• On June 22, 2004, eBay acquired all outstanding shares of Baazee.com, an Indian auction site for approximately US $50 million in cash, plus acquisition costs.
• On August 13, 2004, eBay took a 25% stake in craigslist.org by buying out an existing shareholder who was once a craigslist employee.
• In September 2004, eBay moved forward on its acquisition of Korean rival Internet Auction Co. (IAC), buying nearly 3 million shares of the Korean online trading company for 125,000 Korean won (about US$109) per share.
• In November 2004, eBay acquired Marktplaats.nl for €225 million. This was a Dutch competitor which had a 80% market share in the Netherlands, by concentrating more on small ads than actual auctions.
• On December 16, 2004, eBay acquired rent.com for $30 million in cash and $385 million in ebay stock.
• In May 2005, eBay acquired Gumtree, a network of UK local city classifieds sites.
• In June 2005, eBay acquired Shopping.com, a online comparison site for $635 Million USD.
• In August 2005, eBay bought Skype, a VoIP company, for $2.6 billion in stock and cash.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

eBay has its share of controversy, ranging from its privacy policy (eBay typically turns over user information to law enforcement without a subpoena) to well-publicized seller fraud. eBay data shows that less than .01% of all transactions result in a confirmed case of fraud.

Fraud

There is one major fraud prevention mechanism: the eBay feedback system. After every transaction both the buyer and seller rate each other. They can give "positive", "negative", or a "neutral" score and leave a very short comment. So if a buyer has problems, he can leave a negative and a comment like "never received product".

Just as in normal retail, mistakes are made on both sides, so even legitimate sellers or buyers may have some negative feedback. Depending on the industry, a legitimate seller or buyer will have roughly 99% positive feedback rate unless they have a small total number of feedback, when only one negative feeback could cause their percentage to go drastically down.

The system can protect buyers. However, buyers must spend a little time learning the system and evaluating each seller.

Many new buyers seem to think they are buying directly from eBay--they are not. Other new buyers seem convinced they will be taken advantage of in any transaction. The latter will often become happy and content eBay users, while the former are often taken advantage of.

When fraud happens a buyer can file a dispute. Of course, all laws still apply and legal action may be possible. However, these methods are somewhat redundant with the feedback system.

One distinct advantage of the feedback system over traditional fraud prevention--i.e. enforcement of the law--is that trivial transactions can be conducted safely. A person in the US can buy a $5 collectable from someone in Russia. If there were a problem, the buyer would not have any practical recourse--she is probably not going to file a complaint in a Russian court for $5. But leaving a negative rating may help warn others that a seller is disreputable.

Another strength of the feedback system is that small, reputable sellers can quickly establish credibility. While in traditional retail credibility is linked to name recognition or with store locations, on eBay people will buy from a no-name business with no-assets or inventory as long as they have decent feedback.

One weakness of the feedback system is that small and large transactions carry the same weight in the summary. This can sometimes lead new buyers to be fooled. Experienced buyers know how to guard against this.

Other such weakness in the feedback system include: people are reluctant to leave feedback first for fear that the other party may leave negative without caring, new accounts that leave negative feedback and then create more new feedback, and people not leaving honest feedback for fear of negative retalitory feedback (including negative in retaliation for neutral).

The following are frauds committed by sellers:

• Receiving payment and not shipping merchandise
• Shipping items other than those described
• Shipping faulty merchandise
• Counterfeit merchandise
• Selling stolen goods
• Inflating total bid amounts by bidding against their own auction with a "shill" account

The following are frauds committed by buyers:

• PayPal fraud (e.g. Filing a shipping claim for damaged merchandise and collecting the money from the shipping company, then filing a chargeback on paypal for damaged merchandise, then refusing to return goods. Buyer than has free goods and has income equal to the amount he spent on the item.)
• Credit card fraud
• Receiving merchandise and claiming otherwise
• Returning items other than received
• Preventing competitive bids with "bid shielding"

Other controversies

Other notable controversies involving eBay include:

• On 28 May 2003 a US District Court federal jury found eBay guilty of patent infringement and ordered the company to pay US$35 million in damages. The jury found for plaintiff MercExchange, which had accused eBay in 2001 of infringing on three patents (two of which are used in eBay's "Buy It Now" feature for fixed-price sales) held by MercExchange founder Tom Woolston. The decision was appealed to the US Federal Court of Appeals and was upheld in part and rejected on others. As of Nov 2005, eBay has appealed to the US Supreme Court to effectively block injunctive relief to patent holder MercExchange. The Supreme Court has agreed to hear the case in 2006.

• On 28 July 2003 eBay and its subsidiary PayPal agreed to pay a $10 million fine to settle allegations that they aided illegal offshore and online gambling. According to the settlement, PayPal between mid-2000 and November 2002 transmitted money in violation of various US federal and state online gambling laws. PayPal was also forced out of this market, which accounted for some 6% of its volume. These offenses occurred prior to eBay's purchase of PayPal.

• On 17 December 2004 Avnish Bajaj, CEO of eBay's Indian subsidiary Baazee.com, was arrested after a video clip showing oral sex between two Indian students was sold online. The company denied knowing the content of what they were selling (because it is a venue, not a retailer) and removed the offensive material as soon as they became aware of it. The Indian government attempted to make the case that Bajaj broke a law under India's IT Act, that forbids "publishing, transmitting or causing to publish" obscene material, even though the actual material was never published on Baazee's servers. eBay strongly supported Baazee.

• On 14 June 2005 eBay removed auction listings for originally free tickets to the Live 8 charity auction amid hundreds of complaints about such auctions. Following a statement from Bob Geldof that declared eBay a "cyber pimp", many of these auctions were bombarded with fake bids. Normally, selling of charity tickets is legal under UK law.

• In 2005, the Australian NRL tried unsuccessfully to persuade eBay to prevent scalpers from selling grand final tickets online.

Controversial practices of users

• Bid sniping is placing a high bid during the last few seconds of an auction such that no time remains for other users to counterbid. This practice is allowed on eBay. Many other auction sites, such as Yahoo! Auctions, offer an option which extends the auction by some minutes when a last-minute bid is placed, in order to prevent sniping. eBay's "proxy bidding" feature allows the buyer to specify the maximum they are willing to pay for an item regardless of "snipes". [18]

• Shill bidding is the deliberate use of secondary registrations, aliases, family members, friends, or associates to artificially drive up the bid price of an item. (This is also known as "bid padding".) Shill bidding is not allowed on eBay. [19] Furthermore, shill bidding is a crime in many jurisdictions, and can be prosecuted under United States wire fraud laws. [20]

• Some users try to sell something which, on first glance, appears to be an expensive item for cheap (game console boxes are quite popular), and state clearly in the description that they are paying for an item which is not the one implied. This is not allowed by eBay.

• Conversely, sometimes very cheap items, like envelopes, are sold for high prices because they come with free airline vouchers or concert tickets, in order not to violate the terms on these items.

• Some users sell items for extremely low prices (usually using the Buy It Now feature) and then make up for it by overcharging on shipping. Since eBay charges their fees based on final sales price and not shipping, this allows sellers to reduce the amount they pay eBay in fees and for buyers to avoid importing fees and taxes into their country. This is called "fee avoidance" and is not allowed by eBay; such auctions are cancelled when they are reported. Another concern with "fee avoidance" is that most sellers will not refund shipping so if a $1 item with a $50 shipping fee turns up faulty, the buyer is only eligible to a refund for the $1.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Some expensive items sold on eBay

1. A 340-year-old copy of Shakespeare's Pericles, Prince of Tyre, which survived the Great Fire of London in 1666 (£5million)
2. Grumman Gulfstream II jet ($4.9 million)
3. 1909 Honus Wagner baseball card ($1.65 million)
4. Diamond Lake Resort, western Kentucky ($1.2 million)
5. Enzo Ferrari ($975,000, October 2004)[1]
6. Shoeless Joe Jackson's "Black Betsy" baseball bat ($577,610)
7. Round of golf with Tiger Woods ($425,000)
8. Actual portions of the 1996-2001 Jeopardy! set, including the 9-foot-high Jeopardy! logo that was etched in glass as the backdrop. That sold for approximately $100,000 and one of the contestant podiums sold for nearly $10,000 (proceeds of the set's sale went to charity)

Largest item

One of the largest items ever sold was a World War II submarine, sold by a small town in New England that decided it did not need the historical relic anymore.

Largest failed auction

One of the largest items ever to be put up to auction and not sold was a decommissioned aircraft carrier. The auction was placed by an anonymous seller from Brazil on eBay Motors.

Unusual sale items

• In June 2005, Karolyne Smith sold the right to permanently tattoo an ad on her forehead to GoldenPalace.com for $10,000.
• In May 2005, a Volkswagen Golf that had previously been registered to Cardinal Josef Ratzinger (who had been elected Pope Benedict XVI the previous month) was sold on eBay's German site for €188,938.88. The winning bid was made by the GoldenPalace.com online casino, known for their outrageous eBay purchases. [2]
• In 2004, a Seattle man posted pictures of himself wearing his ex-wife's wedding dress. In more than one way, the seller received much more than he expected. While he initially admitted he was selling the dress to earn some money for Mariners tickets, the bidding got into the thousands of dollars, and the seller actually had received a number of marriage proposals from viewers.
• In September 2004, the owner of MagicGoat.com sold the contents of his trash can to a middle school language arts teacher, who had her students write essays about the trash. [3]
• There was at one point an auction for the first ride on Kingda Ka, the tallest roller coaster on Earth. The winning bid was $1691.66, and the winner rode in the front seat. [4]
• On November 23, 2004, a grilled cheese sandwich with a likeness of the Virgin Mary on it sold for $28,000 to the online casino GoldenPalace.com. The seller claimed to see the Virgin Mary toasted into the bread when she made the sandwitch in 1994. She promptly sealed it in a plastic bag where it remained, free of mold, for over 10 years until it's sale on eBay.
• A Sydney man pocketed AUS$1,035 after auctioning a piece of Nutri-Grain resembling ET, in Dec 2004.
• A 50,000-year-old mammoth. With a minimum bid set at US $250,000. Max was put up for sale in 2004 by his Dutch owner due to lack of space and sold for £61,000. A bargain considering he was one of the five best and most complete mammoth skeletons in the world, consisting of 90% of his original bone material.
• The owner of Cockeyed.com sold advertising space comprising a single pixel on its homepage for 21 days for $100 [5].
• An incomplete package of diapers, bought and opened in the 1980s, raised more than $700US for the Children and Families Ministry at a United Church in Victoria, British Columbia (Canada).
• Water that was said to have been left in a cup Elvis Presley once drank from was sold for $455. The few tablespoons came from a plastic cup Presley sipped at a concert in North Carolina in 1977. [6]
• A Coventry University student got £1.20p for a single cornflake. [7]
• For $100, a man said that he would take a pair of jean his girlfriend made, and shoot them, and drag them behing his tractor, with a fee per shot/starting up the tractor. The item failed to sell. [8]
• an European buyer sold an Vauxhall VX220 that was said to be baptized. [9]

Prohibited items

eBay in its earliest days was essentially unregulated. But as eBay grew, it found it necessary to restrict or forbid auctions for various items. Among the hundred or so banned categories (note that these relate to ebay.com (the US site), other regions may vary in their rules) :

• Tobacco (tobacco-related items and collectibles are allowed) [10]
• Alcohol (alcohol-related collectibles, including sealed containers, as well as wine sales by licensed sellers are allowed) [11]
• Nazi paraphernalia [12]
• Bootleg recordings [13]
• Firearms and ammunition [14]
• Dirty used clothing [15] This policy arose because a thriving market in used jock-straps and underwear had emerged on ebay. Sellers would post descriptions specifically emphasising that they had worn these undergarments for days, a week or more, especially during exercise. There was a demand for this kind of garment amongst sexual fetishists, and these garments would often fetch hundreds of dollars.
• Human parts and remains [16]

As well as a long list of other items that are either wholly prohibited or restricted in some manner. [17]

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Billpoint was the name of a credit card processing service purchased by online auctioneer eBay in 1998. Billpoint's website was taken offline while eBay integrated Billpoint into their auction service, and it did not debut again until Spring 2000 when it was relaunched as a joint-venture with Wells Fargo bank. In the meantime, online payment service PayPal debuted and became very popular with eBay's customers. eBay and Billpoint spent the majority of the next two years trying to overtake the upstart PayPal but with little success. In July 2002, eBay CEO Meg Whitman struck a deal with PayPal CEO Peter Thiel to acquire PayPal, and when the acquisition was finalized that October eBay began the process of phasing out Billpoint.

Links

• www.paypalwars.com

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

The Bogus Escrow scam is a straightforward confidence trick in which a scammer operates a bogus escrow service.

Escrow services are intended to ensure security by acting as a middle-man in transactions where the two parties do not trust each other. Rather than sending money or goods directly to the other party (which is insecure, as one or other party must send their item first, at the risk that the other party may not then send theirs), both parties send their items to the escrow service, which holds them until both items are received, then sends both items on to the recipient party. If either party fails to deliver their part of the deal, the other party's item will be held at the escrow service and eventually returned to them.

In the bogus escrow scam, a scammer sets themselves up as the recipent of money or goods and then requests the use of an escrow service which is, in fact, operated by themselves. This bogus escrow service can then reassure the victim that the scammer has sent his/her item and that they should send theirs to the escrow service. In fact, this is identical to sending the item to the scammer, who them immediately closes down the escrow service and does not send their item to the victim. The scammer can then pass blame to the escrow service, claiming that his/her item was with them at the time they closed down and he/she has also lost it; if the victim did not investigate the escrow service before using it, they may well believe this.

The bogus escrow scam is popular on eBay, where escrow services are often used for high value transactions. A famous instance of the escrow scam is referred to as P-P-P-Powerbook, in which the USA-based seller of an Apple Powerbook determined that a UK buyer was attempting a bogus escrow scam and took revenge by sending them a cardboard box, the same shape and size as a Powerbook, and overdeclaring its customs value so that the scammer was charged a large amount of duty.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

 

PayPal is an Internet business which allows the transfer of money between email users and merchants, avoiding traditional paper methods such as checks/cheques and money orders. PayPal also performs payment processing for e-commerce vendors, auction sites, and other corporate users, for which they charge a fee. Corporate headquarters are in San Jose, California; it is now an eBay company.

Books

• [[|Shannon Sofield, Dave Nielsen & Dave Burchell, ]],  () ( 2004). ""  [ PayPal Hacks: 100 Industrial-Strength Tips and Tools], , , , : O'Reilly. ISBN 0-596-00751-5.. (Paperback, 368 pages) PayPal Hacks
• [[|Eric M. Jackson, ]],  () ( 2004). ""  [ The PayPal Wars: Battles with eBay, the Media, the Mafia, and the Rest of Planet Earth], , , , : World Ahead Publishing. ISBN 0-974-67010-3.. (Hardcover, 360 pages) The PayPal Wars: Battles with eBay, the Media, the Mafia, and the Rest of Planet Earth
• [[|Victoria Rosenborg, ]],  () ( 2005). ""  [ PayPal for Dummies], , , , : Wiley. ISBN 0-7645-8392-1.. (Paperback, 410 pages) PayPal for Dummies

Links

• Company Websites
  • PayPal Home Page
  • PayPal Payments, PayPal's standard products. PayPal Button Factory
  • PayPal Website Payments Pro, PayPal's new Direct Payment product
  • PayPal Instant Payment Notification (IPN), PayPal's ability to communicate back to the shopping site in real-time
  • PayPal Solutions Directory
  • PayPal Developer Network (PDN), PDN Blog

• Other Resources
  • PayPal History, history of PayPal from Internet-Story.com
  • PayPal Fee Calculator
  • Additional PayPal information
  • PayPal User Reviews at "Epinions.com"
  • The Problem With PayPal

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Need an webmaster? Click HERE

Video: HOW TO SET UP PAYPAL ACCOUNT

Maintainer:	SightSpeed Inc.
Stable release:	Template:Latest stable release/SightSpeed [+/-]
Preview release:	Template:Latest preview release/SightSpeed [+/-]
OS:	Cross-platform
Genre:	videotelephony/P2P/VoIP/Instant messenger
License:	Freeware
Website:	www.sightspeed.com

SightSpeed is a free Internet video conference software that uses a proprietary artificial intelligence algorithm to remove unimportant information from images. It claims to be able to transmit 30 frame/s live video over a typical ADSL connection with little time lag.

Using a unique codec based on pixelwise compression, instead of mpeg-type, frame-based compression, SightSpeed essentially only transfers the pixels that experience a change of state on screen. If the background does not change much, it will not be updated very frequently, except for where change does occur.

This means that the moving objects experience fluid, 30 fps video. The efficicent codec also reduces the amount of lag to a level that is imperceptible to the human brain.

SightSpeed's video codec was originally developed at Cornell University's Discover Lab.

Links

• The Official SightSpeed website

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Developer(s) Skype Limited
Initial release August 2003 (2003-08)
Stable release 5.3.0.111 (Windows)
5.1.0.922 (Mac OS X)
2.2.0.25 (Linux) (April 20, 2011; 4 days ago (2011-04-20) (Windows)
April 14, 2011; 10 days ago (2011-04-14) (Mac OS X)
April 6, 2011; 18 days ago (2011-04-06) (Linux)) [+/−]
Preview release [+/−]
Written in Embarcadero Delphi / Objective-C (Mac OS X/iPhone) / C++ with Qt4 (Linux)
Operating system Cross-platform
Available in Multilingual
Type Voice over Internet Protocol / instant messaging / videoconferencing
License Freeware (with some paid features)
Website Skype.com

Skype is a proprietary peer-to-peer Internet telephony (VoIP) network, founded by Niklas Zennström and Janus Friis, the creators of KaZaA and competing against established open VoIP protocols like SIP or H.323. The Skype Group is headquartered in Luxembourg with offices also in London and Tallinn. The system has a reputation for working across different types of network connections (including firewalls and NAT) because voice packets are routed by the combined users of the free desktop software application. Skype users can speak to other Skype users for free, call traditional telephone numbers for a fee (SkypeOut), receive calls from traditional phones for a fee (SkypeIn), and receive voicemail messages for a fee.

In a deal generally criticised by many as overpriced [1], eBay has acquired the company for $US 2.6 billion in cash and stock, plus an additional 1.5 billion in rewards if goals are met by 2008. [2]

Releases

Skype Version 1.2 for Windows was released in March 23, 2005. Its most significant new feature is the provision of centrally-stored contact lists so that a user's contact information is available from any computer that is connected to Skype (in other previous versions, contact information was stored on the local computer).

On 2006-01-05, version 2.0.0.69 of Skype was released.

Versions now exist for Microsoft Windows (Windows 2000, Windows XP and Windows CE (Pocket PC)), Mac OS X and GNU/Linux. The Linux version runs on FreeBSD through its Linux binary compatibility.

In 2006, a now-discontinued feature called "Skypecasting" was introduced. It allowed recordings of Skype voice over IP voice calls and teleconferences to be used as podcasts. Skypecasts remained in beta until its end. Skypecasts hosted public conference calls, up to 100 people at a time. Unlike ordinary Skype p2p conference calls, Skypecasts supported moderation features suitable for panel discussions, lectures, and town hall forums. Skype operated a directory of public Skypecasts. Skypecasts was discontinued as of 1 September 2008.

Throughout 2007 updates (3.1, 3.2 and 3.5) added new features including Skype Find, Skype Prime, Send Money (which allowed users to send money via PayPal from one Skype user to another), video in mood, inclusion of video content in chat, call transfer to another person or a group, and auto-redial. Skype 2.7.0.49 (beta) for Mac OS X released adding availability of contacts in the Mac Address Book to the Skype contact list, auto redial, contact groups, public chat creation, and an in-window volume slider in the call window. During several days in August, Skype users were unable to connect to full Skype network in many countries because of a Skype system-wide crash which was the result of exceptional number of logins after a Windows patch reboot ("Patch Tuesday"). And in November, there was controversy when it was announced that users having London (020) 7 numbers would lose them.

In 2008, Skype released various updates including versions for the Sony PSP hand-held gaming system, version 2.0 for Linux with support for video-conferencing, and version 4 for Windows (with both a full screen and a compact mode). This version dropped support for the "Skype Me" presence indicator, which meant that a user was interested in receiving Skype calls from a non-contact. Skype also discontinued its SkypeCast service without explanation and added internal monthly and daily usage caps on their SkypeOut subscriptions, which had been advertised as "Unlimited". Many users and observers had commented on the high rate of dropped calls and the difficulty reconnecting dropped calls. Skype was used in the seventh season of the U.S. syndicated version of the British game show Who Wants To Be a Millionaire in a new Ask the Expert video chat lifeline. In October, analysis revealed TOM-skype—the Chinese version of Skype run by TOM Online—sends content of text messages and encryption keys to monitoring servers.

In 2009, Skype 4 was released, the Linux client was updated, and Skype for SIP, a service aimed at business users, was launched. At that time around 35% of Skype's users were business users. In April 2009, eBay announced plans to spin off Skype through an initial public offering in 2010. In August, Joltid filed a motion with the U.S. Securities and Exchange Commission, seeking to terminate a licensing agreement with eBay which allows eBay (and therefore Skype) to use the peer-to-peer communications technology on which Skype is based. If successful, this may have caused a shutdown of Skype in its current form. In September, eBay announced the sale of 65% of Skype to a consortium of Index Ventures and Silver Lake Partners. Early in September, Skype had shut down the Extras developer program. In November, eBay completed the sale of 70% of Skype to a consortium comprising Silver Lake Partners, CPPIB, Andreessen Horowitz, and the original founders valuing the business at USD2.75 billion.

In 2010, a report by TeleGeography Research stated that Skype-to-Skype calls accounted for 13% of all international call minutes in 2009; out of the 406 billion international call minutes a total of 54 billion were used by Skype calls. In May, Skype 5.0 beta was released, with support of group video calls with up to four participants. Also in May, Skype released an updated client for the Apple iPhone which allowed Skype calls to be made over a 3G network. Originally, a 3G call subscription plan was to be instituted in 2011, but the plan was eventually dropped by Skype.

On 9 August 2010, Skype filed with the SEC to raise up to $100 million in an initial public offering. In October 2010, Skype announced it had named Tony Bates as their CEO; Bates has been a senior VP at Cisco and responsible for its multi-billion-dollar enterprise, commercial and small business division.

On 14 October 2010, Skype 5.0 for Windows was released with a number of improvements and feature additions, including a Facebook tab to allow users to SMS, chat with, or call their Facebook friends via Skype from the News Feed. This version dropped support for the "Search for Skype Users" option.

On 14 January 2011, Skype announced the acquisition of Qik which is a mobile video sharing platform.

Skype vs traditional phone companies

Phone companies have traditionally charged users a large amount, often proportional to the distance, for long distance calls. Skype, arguably the first major VoIP software, allowed people to talk over the Internet for free. This led to many home users with broadband capability to switch to Skype for placing their calls over the Internet. Skype being secure and encrypted end-to-end, has also attracted large corporations who are beginning to switch from their traditional phone companies for their internal calls. Phone companies were all of a sudden out of favor in the markets which patronized Skype.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

The eBay description scam is a confidence trick carried out via eBay. Sellers sell worthless items with descriptions carefully written to suggest that they are actually valuable ones. Although similar scams have occurred in markets and retail, usually blocked via a Trade Descriptions Act, eBay remains an easier target: firstly, because it allows description to be entered freely; and secondly, due to the fact that eBay's search is keyword based, it is standard practice for legitimate eBay sellers to "pad" item descriptions with extra keywords in order to attract buyers who may not have entered the exact description of the item.

When the item is finally sold and the buyer discovers what the actual item is, he or she frequently objects, but the seller can claim that the description was accurate to the item.

Several examples of the descriptions used in this scam:

• Microsoft Limited Edition Xbox Box - appears as if the seller has included "Box" in order to catch buyers searching for "X Box" rather than "Xbox". In fact, the item on sale was the empty cardboard box that the Xbox came in.

• Nokia Phone, Genuine Picture - appears as if the seller has included "Picture" in order to catch searches for "Picture Phone", a standard name for camera phones. In fact, the buyer was e-mailed a JPG picture of a Nokia phone.

• English auction: This is what most people think of as an auction. Participants bid openly against one another, with each bid being higher than the previous bid. The auction ends when no participant is willing to bid further, or when a pre-determined "buy-out" price is reached, at which point the highest bidder pays the price. The seller may set a 'reserve' price and if the auctioneer fails to raise a bid higher than this reserve the sale may not go ahead.

• Dutch auction: In the traditional Dutch auction the auctioneer begins with a high asking price which is lowered until some participant is willing to accept the auctioneer's price, or a predetermined minimum price is reached. That participant pays the last announced price. This type of auction is convenient when it is important to auction goods quickly, since a sale never requires more than one bid. The Dutch auction is named for its best known example, the Dutch tulip auctions; in the Netherlands this type of auction is actually known as a "Chinese auction". "Dutch auction" is also sometimes used to describe online auctions where several identical goods are sold simultaneously to an equal number of high bidders. Economists call the latter auction a multi-unit English ascending auction.

• Sealed first-price auction: Also known as Sealed High-Bid Auction or First-Price Sealed-Bid Auction (FPSB). In this type of auction all bidders simultaneously submit bids so that no bidder knows the bid of any other participant. The highest bidder pays the price they submitted.

• Sealed second-price auction, also known as a Vickrey auction: This is identical to the sealed first-price auction, except the winning bidder pays the second highest bid rather than their own. In theory, this is mathematically equivalent to the English auction, because in both the first-place bidder receives the item at a price equal to the second-place bidder's willingness to pay, plus the bid increment. True strategic equivalence requires a modified model of the English ascending auction in which the price rises continuously with bidders choosing when to drop out. When all but one bidder drops out, the good is allocated to the remaining bidder at the price at which the second-to-last bidder dropped out. Implemented as such, this is known as a Japanese Auction.

• Silent auction: This is a sealed variant often used in charity events, but involving the simultaneous sale of multiple items. Participants submit bids normally on paper, near the item. They may or may not know how many other people are bidding or what their bids are. The highest bidder pays the price they submitted.

• Procurement auction: This kind of auction reverses the roles of seller and buyer. The buyer puts out an RFQ for a given commodity and providers offer progressively lower prices in hopes of getting the business. At the end of the auction, the lowest bid wins.

• Digital art auction: In this indefinitely long auction, designed for unreleased works that are trivially reproducible at zero cost (recordings, software, drug formulae), bidders openly submit their maximum bids (which may be adjusted or withdrawn at any time). The seller may review the bids and close with a price of their choosing at any time—the successful bidders that pay this price are those whose bid meets or exceeds it, and these are the only bidders who receive a copy of the item.

• Open outcry auction: This type of auction is used in stock exchanges and commodity exchanges, where trading occurs on a trading floor and traders may enter verbal bids and offers simultaneously. Transactions may take place simultaneously at different places in the trading pit or ring. This type of auction is being replaced by electronic trading platforms.

• Unique bid auction: In this type of auction users post blind bids and are given a range of prices they can place a bid in, often a capped limit. The highest, or lowest, unique bid wins. For instance an auction is given a maximum bid of 10. If the top five bids are 10, 10, 9, 8, 8 then 9 would be the winner being the highest unique bid. This a popular online type of auction.

• Buy-out auction: This auction has a predetermined buy-out price in which the bidder can end the auction by accepting the buy-out price. The buy-out price is set by the seller. The bidder can choose to bid or use the buy-out option. If no bidder chooses to utilize the buy-out option, the auction ends with the highest bidder winning the auction.

• Combinatorial Auction: In some cases, a buyer's value for the goods that are up for auction is a complex interaction of the type and number of goods he receives (known as a "bundle"). For instance, if bicycle wheels and bicycle frames are sold separately in an auction, a bidder may value a bundle consisting of a single wheel or a single frame at $0, but may value the bundle of two wheels and one frame at $200. If forced to purchase each component of a bundle in a separate auction, the bidder faces a dilemma: bidding enough to win the components of the bundle that are sold first may result in a financial loss if he fails to win the components that are sold later, but failing to purchase the components that are sold first ensures that he will not win the bundle. This dilemma can be overcome by selling all goods simultaneously and allowing buyers to submit bids on combinations of goods. Such combinatorial bids may offer to pay a certain amount if all units of a buyer-specified bundle are awarded, but nothing otherwise. They may also offer to purchase one bundle of goods or another, but not both. Sorting out which buyers win which bundles (and sometimes the amount they must pay for them) is usually computationally complex. This complexity is overcome by feeding the bids into an optimization algorithm (such as a linear programming problem).

If more than one identical item is sold, there are two possible generalizations of the second-price auction. In a uniform-price auction, all of the winning bidders pay the price submitted by the highest non-winning bidder. Bidders will not typically bid their true value in a uniform-price auction with multiple units. In a Vickrey auction, the pricing rule is more complicated, but preserves the property that bidders will bid their true valuation. It is also possible to auction each identical item individually. Once each item has been priced, the winning bidder is entitled to buy the remaining goods at the same price. Items the winning bidder opts not to purchase are auctioned again. This system creates a tension between the desire to hold back on bidding since later items will almost certainly be cheaper, and the chance that by losing the first round of bidding all possibility of purchasing will be lost.

Bidders in the traditional Dutch auction and sealed first-price auction will tend to underbid what they believe the item is truly worth in hopes of getting the item for less, or in order to avoid the winner's curse. This behavior is known as bid shading. These two auctions are also theoretically equivalent, but in practice Dutch auctions will produce less revenue than sealed first-price auctions (one of the important results of Experimental economics).

Work in the theory of auctions contributed to Vickrey's 1996 Bank of Sweden Prize.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

An auction catalog is a catalog that lists items to be sold at an auction. Auction catalogs for rare and expensive items, such as art, jewelry, postage stamps, and antique furniture, are of interest in and of themselves, for they will frequently include detailed descriptions of the items, their provenance, historical significance, photographs, and so forth. In some cases, auction catalogs are key documentation for rare objects that are in private collections, and make up an important part of the libraries of students and dealers of the rarities.

Each entry typically includes a "lot number" identifying each item uniquely, a detailed textual description, and either an estimated price, or a "reserve" price below which the item will not be sold. Photographs may appear with the entry, or grouped into a separate section of the catalog; for mass-produced items like postage stamps, the textual description may be considered sufficient.

As a combined information source and "sales brochure", an auction catalog must tread a fine line between accuracy and promotion. For instance, any damages or flaws must be described exactly, so that buyers cannot be claim to have been deceived, but at the same time the description will typically include words playing down the bad points (as in "brownish spot that does not detract from appearance" or "faint crease, as is common"). Similarly, special characteristics are also called out, such as "one of only four known examples of this type", or perhaps a photograph of an item of jewelry being worn by a famous person.

Auction catalogs may be sent gratis to favored customers, but the better catalogs will cost, sometimes as much or more than a regular book. These kinds of catalogs may in turn be sold by bookstores, or even appear as items in book auctions.

Some time after the auction is concluded, recipients of the auction catalogs will receive a "prices realized" document, a bare listing of the lot numbers and the prices for which each was sold.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

In an auction, bid shading describes the practice of a bidder placing a bid that is below what they believe a good is worth.

Bid shading is used for one of two purposes. In a common value auction with incomplete information, bid shading is used to compensate for the winner's curse. In such auctions, the good is worth the same amount to all bidders, but bidders don't know the value of the good and must independently estimate it. Since all bidders value the good equally, the winner will generally be the bidder whose estimate of the value is largest. But if we assume that in general bidders estimate the value accurately, then the highest bidder has overestimated the good's value and will end up paying more than it is worth. In other words, winning the auction carries bad news about a bidder's value estimate. A savvy bidder will anticipate this, and reduce their bid accordingly.

Bid shading is also used in first-price auctions, where the winning bidder pays the amount of his bid. If a participant bid an amount equal to their value for the good, they would gain nothing by winning the auction, since they are indifferent between the money and the good. Bidders will optimize their expected value by accepting a lower chance of winning in return for a higher payoff if they win.

In a first-price common value auction, a savvy bidder should shade for both of the above purposes.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

A box social is a form of fundraiser, wherein donated lunch boxes are auctioned off for some cause (usually charity or raising money), or, alternatively, a woman creates a lunch, which is then auctioned off. Varying depending on the customs, the woman would often go on a date with the person who won the lunch they had prepared. The term originated in the early 20th century, when such boxes were more common in workplace settings.

The Australian meaning of the word is largely quite different. Box Social started to be widely used during the Gold Rush period in Victoria. The large commercial mines that operated at the time were running 24 hours a day, in three shifts of eight hours (12midnight - 8am; 8am - 4pm; and 4pm - 12midnight). As the workers on the 4pm - Midnight shift had their only break at 8pm that evening, their wives & mistresses would take their dinner to them at the mine in steel lunchboxes. On their way to the mines at night, it was not uncommon for the miners' wives to have a social gathering together - which they would bring their husband's lunchbox to on the way to the mine. Hence the term box social.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

A Chinese auction is a type of auction (actually a combination of auction and raffle) that is typically featured at charity or other fundraising events.

In a Chinese auction, bidders are not prospective buyers (as in the conventional English auction). Instead, they buy tickets, which are essentially chances to win items. Bidders may buy as many tickets as they like, and bid them on any item(s) they want by placing them in a basket or other container in front of the item(s) they are trying to win. At the conclusion of bidding, the winning ticket is drawn from the tickets bid on each item, and the item is given to the owner of that ticket.

A bidder may increase their chance of winning by buying and bidding more tickets on a specific item. Although there is generally no limit to the number of tickets a given individual may bid on a specific item, the chance of winning depends on the total number of tickets bid by all individuals.

It is unclear whether this type of auction actually originates in China; it is much more likely that the term derives from "chance auction," which is also another name for this type of auction.

The Chinese auction is similar to the "silent auction," with the difference being that in the silent auction bidders submit bids listing specific amounts that they are willing to pay for a specific item.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

In an English auction (also called an Open-outcry auction), the auctioneer begins the auction with the reserve price (lowest acceptable price) and then takes larger and larger bids from the customers until no one will increase the bid. The item is then sold to the highest bidder.

Variations

There are many variations on this auction system. Sometimes, the reserve price is not revealed. The auctioneer might do this to prevent "rings", groups of bidders who promise not to outbid each other, lowering the final price. Also, bids may be made with signals instead of being called out. Such signals can include tugging an ear or raising a bidding paddle. This system reduces the noise from the auction. Another variation on the English auction is the open-exit auction, where the bidders must announce that they are dropping out of the bidding and they can't reenter. This tells more about how valuable people consider the item up for bid than a regular English auction. In France, when the last bid has been made in an auction for an art object, a member of the Louvre can say "Preemption de l'etat" (Pre-emption of the state) and buy the object for the highest bid.

Advantages and Disadvantages

An English auction has several advantages and disadvantages for both the buyers and the seller. Winner's curse is rampant in these auctions due to strong competition and inexperienced participants getting carried away in the heat of the moment. This is good for the seller. But, the object on sale can be bought for much less than its value if bidding is slow, and rings can take advantage of the nature of English auctions. A disadvantage for both buyers and sellers with the English auction is that everyone must be in communication over the course of the auction, which can be expensive and difficult.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

NYOP is an acronym for "Name-Your-Own-Price", a system where a buyer specifies a price and a product and/or service, and asks sellers to match that combination. A special type of reverse auction.

Name-your-own-price sales are considered "opaque" by marketers because buyers "don't know the name of the supplier (airline, hotel or car rental company) or the schedule (with air tickets) until after" they make a nonrefundable purchase. Suppliers benefit because they can sell to the most price-conscious travelers without publicly disclosing those low rates.

By 2005, Priceline began to de-emphasize this system, and added published price options on their websites.

In Denmark there have recently (July 2006) been an addition in websites that incorporate and develop this business model. The site (www.prisminister.dk[1]) differs from the priceline strategy, by only collecting a deposit before the deal, rather than making the user commit 100% to the purchase. Furthermore the dealer is allowed to make a return offer, if the price the user requests is too low. After the bidding, if no dealer has accepted the users price, the user receives the lowest bid amongst the dealers.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Request For Proposal (referred to as RFP and also known as Request For Quotation or RFQ) is a business term referring to a request for quotations, through a tender process, on a specific product or service.

An RFP typically asks for more than a price, including: basic corporate information and history, financial information and product information such as stock availability and estimated completion period. The bidder returns a quote or proposal by a set date and time known as a tender closing. The proposals are used to evaluate the suitability as a supplier, vendor, or institutional partner.

A less detailed version of an RFQ / RFP is the Request for Information (RFI), which is a request for very basic information about a firm's capabilities, intentions, and resources to compile an authorised supplier panel.

RFP's often include specifications of the item, project or service for which a proposal is requested. The more detailed the specifications, the better the chances that the proposal provided will be accurate.

Generally RFP's are sent to an approved supplier or vendor list.

Links

• Eutilia - Electronic Tender provider (Technology and Services)
• Contract Tenders - Public Tenders in UK
• TenderSystem - Open Source Reverse Auction Software
• TED - Public Tenders in Europe
• WhyAbe - Free RFP System
• uShip - Online shipping market place

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Need an webmaster? Click HERE

A reverse auction (sometimes called a procurement auction or tender) is a type of auction in which the role of the buyer and seller are reversed. In a more typical auction, the seller puts up an item for sale, multiple buyers bid for the item and depending on the nature of the auction (English or Dutch), and one or more of the highest bidders buy the goods at a price determined by the bidding.

In a reverse auction a buyer issues a request for quotations (RFQ) to purchase a particular item. Multiple suppliers quote the price at which they are willing to supply the requested item or service. The transaction is awarded to the supplier that provided the lowest price.

Reverse auctions are commonly used to fill government and large value contracts.

From the standpoint of game theory, these auctions are formally equivalent to a more traditional auction.

Reverse Auctions gained popularity in the late 1990's as a result of the emergence internet-based online auction tools. Early adopters of this online tool included General Electric. Later, employees of General Electric broke off to form the company Freemarkets. This coincided with a manufacturing down turn in the late 1990's which compelled suppliers to reluctantly participate in the online Reverse Auctions. Several start ups rushed to fill the Reverse Auction space after Freemarket's rapid growth. Freemarkets was acquired by California based Ariba, Inc. which now markets the Reverse Auction as just one tool in the Electronic Sourcing offering.

The open outcry auction is generally recognized as the most transparent and efficient method to determine a price in a specific market. While open outcry is normally applied in "buy side" auctions, the Reverse Auction remains an option for those wishing to purchase at the best price the market has to offer at a particular moment in time. .

Links

• Eutilia - Reverse Auction and Electronic Tendering service provider
• Contract Tenders - Public Tenders in UK
• TenderSystem - Open Source Reverse Auction Software
• TED - Public Tenders in Europe
• WhyAbe - Free RFP System
• uShip - Online shipping market place

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Unique bid auctions are a type of auction sale in which the participants bid for a particular item by submitting blind or sealed (ie secret) bids: the winner is the bidder who places the highest (or, in some variants, the lowest) unique bid. A "unique" bid, in this context, means one in which the amount offered is different from that offered by any other participant.

In unique bid auctions, it is normal for bidders to be charged for placing their bid. The seller's payment includes the total of these charges, as well as the actual amount bid by the winning participant. For the buyer, the attraction is that they may acquire an item at well below its true value. This type of auction may be regarded as having some of the elements of a normal auction (placing bids) and of a lottery (paying an entry fee and guessing the bids which may be made by other participants).

Variants

The two most common types are maximum and minimum bid auctions. In a Maximum bid auction, a limit is set for the maximum amount that can be bid. The highest unique bid when the auction is closed wins the auction.

In a minimum bid auction the procedure is the same but the lowest unique bid wins.

Examples of a maximum bid auction

For example, a maximum bid auction sets a limit of £10 and the highest ten bids on the auction are
£10.00
£10.00
£9.99
£9.99
£9.99
£9.98
£9.97
£9.96
£9.96
£9.96

The bidder who placed a bid of £9.98 would be the highest "unique" bid and therefore the winner.

In a typical real example, a car worth £20000 might be offered to bidders at a maximum bid of £100. The winning bidder would get the car at a price well below its retail value. If the auctioneer charges £10 a bit then they would need to get 2000 bids to cover the cost of the car. Once the auctioneer has received 2000 bids, any more bids would result in the auctioneer (or the seller) making a profit.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

A Vickrey auction is a type of sealed-bid auction, where bidders submit written bids without knowing the bid of the other people in the auction. The highest bidder wins, but the price paid is the second highest bid. The auction was created by William Vickrey. This type of auction is strategically similar to an English auction, and gives bidders an incentive to bid their true value.

Vickrey's original paper considered only auctions where a single, indivisible good is being sold. In this case, the terms Vickrey auction and second-price sealed-bid auction are equivalent, and are used interchangeably. When multiple identical units (or a divisible good) are being sold in a single auction, the most obvious generalization is to have all bidders pay the amount of the highest non-winning bid. This is known as a uniform-price auction.

The uniform-price auction does not, however, result in bidders bidding their true valuations as they do in a second-price auction. For that reason, the name "Vickrey auction" in the multi-good auction is usually reserved by economists for a more complicated pricing scheme based on opportunity cost, which does give bidders the incentive to bid truthfully.

Vickrey auctions are much studied in economic literature, but are not particularly common in practice. One market in which they have been used is stamp collecting. eBay's system of proxy bidding is similar, but not identical, to a Vickrey auction. A slight variant of a Vickrey auction is known to be used in Google's online advertisement programme, AdSense, its transparency allowing real-time unmonitored auctions to take place.

Properties

Self-revelation

In a Vickrey auction each bidder maximizes his or her expected utility by bidding (revealing) his or her true valuation.

Ex-post efficiency

A Vickrey auction is ex-post efficient (the winner is the bidder with the highest valuation) under the most general circumstances; it thus provides a baseline model against which the efficiency properties of other types of auctions can be posited.

References

• Vijay Krishna, Auction Theory

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

The Winner's curse is a phenomenon akin to a Pyrrhic victory that occurs in common value auctions with incomplete information. In such an auction, the goods being sold have a similar value for all bidders, but players are uncertain of this value when they bid. Each player independently estimates the value of the good before bidding.

The winner of an auction is, of course, the bidder who submits the highest bid. When each bidder is estimating the good's value and bidding accordingly, that will probably be the bidder whose estimate was largest. If we assume that on average the bidders are estimating accurately, then the person whose bid is highest has almost certainly overestimated the good's value. Thus, a bidder who wins after bidding what they thought the good was worth has almost certainly overpaid.

More formally, this result is obtained using conditional probability. We are interested in a bidder's expected value from the auction (the expected value of the good, less the expected price) conditioned on the assumption that the bidder won the auction. It turns out that for a bidder bidding their true estimate, this expected value is negative, meaning that on average the winning bidder is overpaying.

Savvy bidders will avoid the winner's curse by bid shading, or placing a bid that is below what they believe the good is worth. This may make it less likely that the bidder will win the auction, but it also protects them from overpaying in the cases where they do win. A savvy bidder knows that they don't want to win if it means they will pay more than a good is worth. To minimize bid shading, many auctions such as eBay have the bidder pay the price of the highest losing bid. (Note, however, that this lessens but does not necessarily eliminate the winner's curse, because the highest losing bid may still be above the good's value.)

The severity of the winner's curse gets stronger as the number of bidders increases. This is because the more bidders there are, the more likely it is that some of them have greatly overestimated the good's value. In technical terms, the winner's expected estimate is the value of the first order statistic, which increases as the number of bidders increases.

Examples

Since most auctions involve at least some amount of common value, and some degree of uncertainty about that common value, the winner's curse is an important phenomenon.

In the 1950s, when the term winner's curse was first coined, there was no accurate method to estimate the potential value of an offshore oil field. So if, for example, an oil field had an actual intrinsic value of $10 million, oil companies might guess its value to be anywhere from $5 million to $20 million. The company who wrongly estimated at $20 million and placed a bid at that level would win the auction, and later find that it was not worth as much.

Other auctions where the winner's curse is significant:

• Spectrum auctions in which companies bid on licenses to use portions of the electromagnetic spectrum. Here, the uncertainty would come from, for example, estimating the value of the cell phone market in New York City.
• IPOs, in which bidders need to estimate what the market value of a company's stock will be.

Links

• www.gametheory.net - applet demonstrating the winner's curse.
• www.techcentralstation.com - a good article explaining the winner's curse in the context of the Google IPO.
• The Winner's Curse in Baseball - article on how the winner's curse affects bidding for free agents.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Video: Asymmetric information: auctions and the winner's curse

Trade originated with the start of communication in prehistoric time. Trading was the main facility of prehistoric people, who bartered goods and services from each other. Peter Watson dates the history of long-distance commerce from circa 150,000 years ago.

Trade is believed to have taken place throughout much of recorded human history. There is evidence of the exchange of obsidian and flint during the stone age. Materials used for creating jewelry were traded with Egypt since 3000 BCE. The Phoenicians were noted sea traders, travelling across the Mediterranean Sea, and as far north as Britain for sources of tin to manufacture bronze. For this purpose they established trade colonies the Greeks called emporia.

From the beginning of Greek civilization until the fall of the Roman empire in the 5th century, a financially lucrative trade brought valuable spice to Europe from the far east, including China. Roman commerce allowed their empire to flourish and endure. Their widespread empire produced a stable and secure transportation network that enabled the shipment of trade goods without fear of significant piracy.

The fall of the Roman empire, and the succeeding Dark Ages brought instability to Western Europe and a near collapse of the trade network. Nevertheless some trade did occur. For instance, Radhanites were a medieval guild or group (the precise meaning of the word is lost to history) of Jewish merchants who traded between the Christians in Europe and the Muslims of the Near East.

From the 8th century to the 11th century centuries, the Vikings and Varangians traded as they sailed from and to Scandinavia. Vikings sailed to Western Europe, while Varangians to Russia. The Hanseatic League was an alliance of trading cities that maintained a trade monopoly over most of Northern Europe and the Baltic, between the 13th and 17th centuries.

The desert Cities in the Negev were linked to the Mediterranean end of the ancient Incense Route.

Vasco da Gama started the Spice trade in 1498. The spice trade was of major economic importance and helped spur the Age of Exploration. Spices brought to Europe from distant lands were some of the most valuable commodities for their weight, sometimes rivaling gold.

In the 16th century, Holland was the centre of free trade, imposing no exchange controls, and advocating the free movement of goods.

Trade in the East Indies was dominated by Portugal in the 16th century, the Netherlands in the 17th century, and the British in the 18th century.

In 1776, Adam Smith published the paper An Inquiry into the Nature and Causes of the Wealth of Nations. It criticised Mercantilism, and argued that economic specialization could benefit nations just as much as firms. Since the division of labour was restricted by the size of the market, he said that countries having access to larger markets would be able to divide labour more efficiently and thereby become more productive. Smith said that he considered all rationalizations of import and export controls "dupery", which hurt the trading nation at the expense of specific industries.

In 1799, the Dutch East India Company, formerly the world's largest company, became bankrupt, partly due to the rise of competitive free trade.

In 1817, David Ricardo, James Mill and Robert Torrens showed that free trade might benefit the industrially weak as well as the strong, in the famous theory of comparative advantage. In Principles of Political Economy and Taxation Ricardo advanced the doctrine still considered the most counterintuitive in economics:

When an inefficient producer sends the merchandise it produces best to a country able to produce it more efficiently, both countries benefit.

The ascendancy of free trade was primarily based on national advantage in the mid 19th century. That is, the calculation made was whether it was in any particular country's self-interest to open its borders to imports.

John Stuart Mill proved that a country with monopoly pricing power on the international market could manipulate the terms of trade through maintaining tariffs, and that the response to this might be reciprocity in trade policy. Ricardo and others had suggested this earlier. This was taken as evidence against the universal doctrine of free trade, as it was believed that more of the economic surplus of trade would accrue to a country following reciprocal, rather than completely free, trade policies.

This was followed within a few years by the infant industry scenario developed by Mill anticipated New Trade Theory by promoting the theory that government had the "duty" to protect young industries, although only for a time necessary for them to develop full capacity. This became the policy in many countries attempting to industrialize and out-compete English exporters.

The Great Depression was a major economic recession that ran from 1929 to 1941. During this period, there was a great drop in trade and other economic indicators.

The lack of free trade was considered by many as a principal cause of the depression, and World War II. During the war, in 1944, 44 countries signed the Bretton Woods Agreement, intended to prevent national trade barriers, to avoid depressions. It set up rules and institutions to regulate the international political economy: the International Monetary Fund and the International Bank for Reconstruction and Development (later divided into the World Bank and Bank for International Settlements). These organizations became operational in 1946 after a enough countries ratified the agreement. In 1947, 23 countries agreed to the General Agreement on Tariffs and Trade to promote free trade.

Free trade advanced further in the late 20th century and early 2000s:

1992 European Union lifted barriers to internal trade in goods and labour.
January 1, 1994 NAFTA took effect
1994 The GATT Marrakech Agreement specified formation of the WTO.
January 1, 1995 World Trade Organization was created to facilitate free trade, by mandating mutual most favoured nation trading status between all signatories.
As of mid-2005, there is a proposal for a Central American Free Trade Agreement, which would also include the United States and the Domincan Republic.

Development of money

The first instances of money were objects with intrinsic value. This is called commodity money and includes any commonly-available commodity that has intrinsic value; historical examples include pigs, rare seashells, whale's teeth, and (often) cattle. In medieval Iraq, bread was used as an early form of money. In Mexico under Montezuma cocoa beans were money. [1]

Roman denarius

Currency was introduced as a standardized money to facilitate a wider exchange of goods and services. This first stage of currency, where metals were used to represent stored value, and symbols to represent commodities, formed the basis of trade in the Fertile Crescent for over 1500 years.

Numismatists have examples of coins from the earliest large-scale societies, although these were initially unmarked lumps of precious metal.

Ancient Sparta minted coins from iron to discourage its citizens from engaging in foreign trade.

The system of commodity money in many instances evolved into a system of representative money. In this system, the material that constitutes the money itself had very little intrinsic value, but none the less such money achieves significant market value through being scarce as an artifact.

Current trends

Doha rounds

The Doha round of World Trade Organization negotiations aims to lower barriers to trade around the world, with a focus on making trade fairer for developing countries. Talks have been hung over a divide between the rich, developed countries, and the major developing countries (represented by the G20). Agricultural subsidies are the most significant issue upon which agreement has been hardest to negotiate.

The Doha round began in Doha, Qatar, and negotiations have subsequently continued in: Cancún, Mexico; Geneva, Switzerland; and Paris, France.

China

Beginning around 1978, the government of the People's Republic of China (PRC) began an experiment in economic reform. Previously the Communist nation had employed the Soviet-style centrally planned economy, with limited results. They would now utilize a more market-oriented economy, particularly in the so-called Special Economic Zones located in the Guangdong, Fujian, and Hainan.

Shanghai Stock Exchange (SSE)

The results of this reform has been spectacularly successful. By 2004, the GDP of the nation has quadrupled since 1978 and foreign trade exceeded $1 trillion US. This occurred in spite of the backlash from the Tiananmen Square Massacre. The PRC maintains a $30 billion trade surplus, and is rapidly becoming a leader in industrial manufacturing.

In 1991 the PRC joined the Asia-Pacific Economic Cooperation group, a free-trade organization. More recently, in 1999 they also joined the World Trade Organization.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

International trade is the exchange of goods and services across national borders. In most countries, it represents a significant part of GDP. While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance have increased in recent centuries, mainly because of Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing. In fact, it is probably the increasing prevalence of international trade that is usually meant by the term "globalization".

Empirical evidence for the success of trade can be seen in the contrast between countries such as South Korea, which adopted a policy of export-oriented industrialization, and India, which historically had a more closed policy (although it has begun to open its economy, as of 2005). South Korea has done much better by economic criteria than India over the past fifty years, though its success also has to do with effective state institutions.

Trade sanctions against specific country are sometimes imposed, in order to punish that country for some action. An embargo, a severe form of externally imposed isolation, is a blockade of all trade by one country on another. For example, the United States has had an embargo against Cuba for about 40 years.

Although there are usually few trade restrictions within countries, international trade is usually regulated by governmental quotas and restrictions, and often taxed by tariffs. Tariffs are usually on imports, but sometimes countries may impose export tariffs or subsidies. All of these are called trade barriers. If a government removes all trade barriers, a condition of free trade exists. A government that implements a protectionist policy establishes trade barriers.

The fair trade movement, also known as the trade justice movement, promotes the use of labour, environmental and social standards for the production of commodities, particularly those exported from the Third and Second World's to the First World.

Standards may be voluntarily adhered to by importing firms, or enforced by governments through a combination of employment and commercial law. Proposed and practiced fair trade policies vary widely, ranging from the commonly adhered to prohibition of goods made using slave labour to minimum price support schemes such as those for coffee in the 1980s. Non-governmental organizations also play a role in promoting fair trade standards by serving as independent monitors of compliance with fairtrade labelling requirements.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Patterns of organizing and administering trade include:

• State control - trade centrally controlled by government planning.
  • Laws regulating Trade and establishing a framework such as trade law, tariffs, support for intellectual property, opposition to dumping.
• Guild control - trade controlled by private business associations holding either de facto or government-granted power to exclude new entrants.
  • In contemporary times, the language has evolved to business and professional organizations, often controled by academia. For example in many states, a person may not practice the professions of engineering, law, law enforcement, medicine, and teaching unless they have a college degree and, in some cases, a license.
• Free enterprise - trade without significant central controls; market participants engage in trade based on their own individual assessments of risk and reward, and may enter or exit a given market relatively unimpeded.
• Infrastructure in support of trade, such as banking, stock market,
• Technology in support of trade such as electronic commerce, vending machines.

International organizations

European Common Market
GATT = General Agreement on Tariffs and Trade
G8
IMF = International Monetary Fund
OPEC = Organization of the Petroleum Exporting Countries

Free trade areas

Free trade organizations or free trade areas
European Free Trade Association
Free Trade Area of the Americas
NAFTA = North American Free Trade Agreement
South American Community of Nations

United Nations umbrella

UNCTAD = United Nations Conference on Trade and Development
WTO = World Trade Organization

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Video: The World Trade Organization (WTO) and the global resistance

A credit card system is a type of retail transaction settlement and credit system, named after the small plastic card issued to users of the system. A credit card is different from a debit card in that the credit card issuer lends the consumer money rather than having the money removed from an account. It is also different from a charge card (though this name is often used to describe credit cards by the public) in that charge cards do not extend the user credit -- the charges must be paid each month in full. In contrast, a credit card allows the consumer to 'revolve' their balance, at the cost of having interest charged. Most credit cards are the same shape and size, as specified by the ISO 7810 standard.

Credit card numbering

The numbers found on credit cards have a certain amount of internal structure, and share a common numbering scheme.

The card number's prefix is the sequence of digits at the beginning of the number that determine the credit card network to which the number belongs. The card number's length is its number of digits.

In addition to the main credit card number, credit cards also carry issue and expiry dates (given to the nearest month), as well as extra codes such as issue numbers and security codes. Not all credit cards have the same sets of extra codes.

Credit cards in ATMs

Many credit cards can also be used as an ATM card to withdraw money against the credit limit extended to the card but many card issuers charge interest on cash advances before they do so on purcahses. The interest on cash advances is commonly charged from the date the withdrawal is made, rather than the monthly billing date. Many card issuers levy a commission for cash withdrawals, even if the ATM belongs to the same bank as the card issuer. Merchants do not offer cashback on credit card transactions because they would pay a percentage commission of the additional cash amount to their bank or merchant services provider, thereby making it uneconomical.

Credit card organizations

• American Express
• Citi
• China UnionPay
• Diners Club
• Discover
• JCB
• MasterCard
• VISA

Collectible credit cards

Visa's "Happy Shoppers" credit card design

A growing field of numismatics (study of money), or more specifically Exonumia (study of money-like objects), credit card collectors seek to collect various embodiments of credit from the now familiar plastic cards to older paper merchant cards, and even metal tokens that were accepted as merchant credit cards. Early credit cards were made of celluloid, then metal and fiber, then paper and are now mostly plastic.

Links

• Secret History of the Credit Card (PBS/Frontline/New York Times documentary on Credit Cards)
• Article from Evolt Validating a Credit Card Number with JavaScript
• Credit card validator (Javascript) JavaScript code for validating credit card numbers using LUHN
• Credit card validator (PHP) PHP code for validating credit card numbers using LUHN
• Ericdigests.org Card Usage and Debt among College and University Students
• Datapoints on college credit card usage University Students Credit Card Statistics.
• "Who killed Richard Cullen?" by Jon Ronson, The Guardian, 16 July 2005.
  • Article discussing marketing strategies of credit selling companies in the UK.
• Choosing and Using Credit Cards Consumer credit card advice from the Federal Trade Commission
• Avoiding Credit and Charge Card Fraud From the Federal Trade Commission
• Choosing a Credit Card Consumer credit card information from the Federal Reserve Board
• Vertical search engine for credit card topics Credit card solutions search engine

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Video: Credit Cards, Credit Score & Credit : How to Apply for a Credit Card

Electronic commerce, e-commerce or ecommerce consists primarily of the distributing, buying, selling, marketing, and servicing of products or services over electronic systems such as the Internet and other computer networks. The information technology industry might see it as an electronic business application aimed at commercial transactions. It can involve electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange, automated inventory management systems, and automated data-collection systems. It typically uses electronic communications technology such as the Internet, extranets, e-mail, Ebooks, databases, and mobile phones.

According to Forrester Research (as cited in Kessler, 2003), electronic commerce generated sales worth US $12.2 billion in 2003.

Historical development

The meaning of the term "electronic commerce" has changed over time. Originally, "electronic commerce" meant the facilitation of commercial transactions electronically, usually using technology like Electronic Data Interchange (EDI, introduced in the late 1970s) to send commercial documents like purchase orders or invoices electronically.

Later it came to include activities more precisely termed "Web commerce" -- the purchase of goods and services over the World Wide Web via secure servers (note HTTPS, a special server protocol which encrypts confidential ordering data for customer protection) with e-shopping carts and with electronic pay services, like credit card payment authorizations.

When the Web first became well-known among the general public in 1994, many journalists and pundits forecast that e-commerce would soon become a major economic sector. However, it took about four years for security protocols (like HTTPS) to become sufficiently developed and widely deployed (during the browser wars of this period). Subsequently, between 1998 and 2000, a substantial number of businesses in the United States and Western Europe developed rudimentary Web sites.

Although a large number of "pure e-commerce" companies disappeared during the dot-com collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such companies had identified valuable niche markets and began to add e-commerce capabilities to their Web sites. For example, after the collapse of online grocer Webvan, two traditional supermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries through which consumers could order groceries online.

As of 2005, e-commerce has become well-established in major cities across much of North America, Western Europe, and certain East Asian countries like South Korea. However, e-commerce is still emerging slowly in some industrialized countries, and is practically nonexistent in many Third World countries.

Electronic commerce has unlimited potential for both developed and developing nations, offering lucrative profits in a highly unregulated environment

Product suitability

Certain products/services appear more suitable for online sales; others remain more suitable for offline sales. Many successful purely virtual companies deal with digital products, including information storage, retrieval, and modification, music, movies, education, communication, software, photography, and financial transactions. Examples of this type of company include: Google, eBay and Paypal.

Virtual marketers can sell some non-digital products and services successfully. Such products generally have a high value-to-weight ratio, they may involve embarrassing purchases, they may typically go to people in remote locations, and they may have shut-ins as their typical purchasers. Items which can fit through a standard letterbox - such as music CDs, DVDs and books - are particularly suitable for a virtual marketer, and indeed Amazon.com, one of the few enduring dot-com companies, has historically concentrated on this field.

Products such as spare parts, both for consumer items like washing machines and for industrial equipment like centrifugal pumps, also seem good candidates for selling online. Retailers often need to order spare parts specially, since they typically do not stock them at consumer outlets -- in such cases, e-commerce solutions in spares do not compete with retail stores, only with other ordering systems. A factor for success in this niche can consist of providing customers with exact, reliable information about which part number their particular version of a product needs, for example by providing parts lists keyed by serial number.

Purchases of pornography and of other sex-related products and services fulfil the requirements of both virtuality (or if non-virtual, generally high-value) and potential embarrassment; unsurprisingly, provision of such services has become the most profitable segment of e-commerce.

Products unsuitable for e-commerce include products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittings - most notably clothing - and products where colour integrity appears important. Nonetheless, Tesco.com has had success delivering groceries in the UK, albeit that many of its goods are of a generic quality, and clothing sold through the internet is big business in the U.S.

Acceptance of e-commerce

Consumers have accepted the e-commerce business model less readily than its proponents originally expected. Even in product categories suitable for e-commerce, electronic shopping has developed only slowly. Several reasons might account for the slow uptake, including:

• Concerns about security. Many people will not use credit cards over the Internet due to concerns about theft and fraud.
• Lack of instant gratification with most e-purchases (non-digital purchases). Much of a consumer's reward for purchasing a product lies in the instant gratification of using and displaying that product. This reward does not exist when one's purchase does not arrive for days or weeks.
• The problem of access to web commerce, particularly for poor households and for developing countries. Low penetration rates of Internet access in some sectors greatly reduces the potential for e-commerce.
• The social aspect of shopping. Some people enjoy talking to sales staff, to other shoppers, or to their cohorts: this social reward side of retail therapy does not exist to the same extent in online shopping.

Suppliers offering services to electronic commerce practitioners

Financial

• PayPal
• Yahoo!
• Moneybookers
• Webmoney (Russia)
• PayZip (Singapore)

Software

• eMeta Corporation
• NetSuite Inc.

Entities using electronic commerce

• Amazon.com
• eBay
• exostar
• rediff.com
• Smarthome

Links

• General Information
  • CIO's Ebusiness Research Center
  • NetAcademy on Electronic Markets
  • Commerce Starter Kit 2.0 - Free ecommerce software for ASP.NET 2.0 websites
  • e-Commerce Solution - Build eCommerce Web Site
  • Business
• Ecommerce News
  • Ecommerce Guide
  • Ecommerce Best Practices (B2B)
  • Ecommerce Times
  • Ecommerce

• Security
  • ECommerce Safety - A Quick Overview
  • Online Security: hacking, cracking, phreaking, intelligence services
• Consumer Awareness and Education
  • North American Consumer Project on Electronic Commerce (NACPEC)
  • Institute of Certified E-Commerce Consultants (ICECC)

References

• Chaudhury, Abijit & Jean-Pierre Kuilboer (2002), e-Business and e-Commerce Infrastructure, McGraw-Hill, ISBN 0-07-247875-6
• Kessler, M. (2003). More shoppers proceed to checkout online. Retrieved January 13, 2004
• Seybold, Pat (2001), Customers.com, Crown Business Books (Random House), ISBN 0-609-60772-3

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.