Information Systems, Organizations, and Strategy

E-Bay has been synonymous with internet auctions. It started out as one of the first successful Internet auction business, mushrooming into a gigantic electronic marketplace hosting over 532,000 online storefronts all over the world in 2007 eBay's marketplaces generated nearly 77 billion in revenue. E Bay also acquired the ticket-reselling Web site Stub Hub, bought a 25-percent stake in classified ad site Craigslist, and purchased Kurant, now Pro Stores, whose technology helps users set up online stores. Some analysis report that while many of eBay's individual acquisitions appear successful, they haven't created the synergy that was intended, and diversification has detracted from eBay's core business, auctions.    

But eBay's auction business is changing, too. E-Bay sells many items at a fixed price, and fixed sales already account for 50 percent of marketplace revenue. This side of the business is growing much more rapidly than online auctions. Amazon.com and other rivals are attracting more shoppers with fixed-price listings. To shift toward that model, eBay struck a deal with giant Web retailer Buy.com to sell millions of DVDs, electronics, books and other items on eBay at lower fees than would be charged individual sellers.  

Information systems and organization influence one another. Information systems are built by managers to serve the interests of the business firm. At the same time, the organization must be aware of and open to the influences of information systems to benefit from new technologies. The interaction between information technology and organization is complex and is influenced by many mediating factors, including the organization structure, business processes, politics, culture, surrounding environment, and management decisions.