The growth of Internet technology has become great challenge to any Web2.0 applications. High user’s expectation, fierce competition from other companies and fluctuation in economy are some of the factors that give huge impact to the survival of the applications. Besides that, their business model and technology should be scalable enough to compete in the rapid growth era or otherwise it will end up being a downfall to their services.
eBay is expected to continue to benefit from the rapid growth in online sales. “eBay’s business model, which requires no inventory and is not capital intensive, generates substantial free cash flow” (Forbes.com, 2010). The market of eBay has expanded to Germany, Australia and China. For instance, customers of China UnionPay, the largest electronic-payment-services provider, will be able to use PayPal to shop online from the third quarter of 2010. This will give eBay an access of millions of cardholders. Given the facts, unsurprisingly eBay got total revenue of 2,196 million in first quarter of 2010 compared with $2,021.0 million in 2009 (Forbes.com, 2010).
As part of the Company’s strategy to promote lightweight model and improve scalability, eBay has created a platform to enable developers to make more money with eBay. It is reported that their developer program has more than 70,000 members who have created more than 12,000 live applications (Kerner, 2008). 
Furthermore, eBay has no longer charged for the use of their API by the developers. With this, eBay is establishing a large community of outside developers where they can share APIs among themselves. It also allows outside developers to contribute services that can communicate with eBay. In term of high scalability, eBay has shown its effort with its version, started with v1 in 1995 and moved on with current version v4. It is noticed that all the functions in the previous version are replaced with Java code, which is developed using Eclipse (more details).
There are also issues with eBay. Many third parties claim that eBay has infringed on their intellectual property rights. In addition, eBay will likely to face a patent infringement charge regarding payment services that it offers. Other than that, fluctuations in exchange rate will have a bigger impact on the Company’s results in the future. eBay also needs improve their services if they want to become a potential contender in many years. Go to this site for example of eBay problems.
The Future of eBay
eBay is one of the largest online e-commerce companies in the world. Its closest competitor is Amazon. 
Before, their business models were different; eBay is based on auction model, Amazon established with its fixed model. However, the competition between these companies has been prominent in financial climate. eBay is now changing their business to fixed price, along with their auction model as well. Therefore, it is obvious that fierce competition in e-commerce and online payments are posing threats and challenging eBay’s dominance.
Source:
Forbes.com. (2010). eBay INC. Retrieved May 2010, from Forbes.com: http://finapps.forbes.com/finapps/BuyHoldSellAnalysis.do?tkr=EBAY
Kerner, S. M. (2008, June 16). eBay Opens Up Wide to Developers. Retrieved May 2010, from Internetnews.com: http://www.internetnews.com/dev-news/article.php/3753036/eBay+Opens+Up+Wide+to+Developers.htm.
