EBay, the Online Auction Company, Has an Impressive Portfolio of Cooperative

question 10

Multiple Choice

eBay, the online auction company, has an impressive portfolio of cooperative agreements. This portfolio includes an agreement with the U.S. Postal Service to facilitate the shipping of goods purchased through eBay auctions, an agreement to allow MBNA to use eBay's name on a credit card, and an agreement in an online auction company in Korea that is supplemented with an investment by eBay in the Korean partner. In addition, at one time eBay had formed an independent firm, called eBay Australia and New Zealand, with an Australian company known as ecorp.
-If eBay's agreements with their Korean and Australian partners were intended to increase the number of buyers and sellers and thereby increase the value of eBay's online auction services for every eBay user, this would imply that the online auction industry is an example of a ________ industry.

• A) declining
• B) network
• C) commodity
• D) mature

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Definitions:

Treasury Stock Approach

A method used in calculating the share price impact of stock options by assuming that any proceeds from option exercises are used to buy back shares at the current price.

Parent's Common Stock

The equity interest held in a parent company, representing a claim on its assets and earnings.

Subsidiary Ownership

The holding of majority or significant shares in another company, allowing the parent company to control or influence its operations and decisions.

Consolidated Income Tax Return

A combined tax return for a parent company and its subsidiaries, allowing the entire group to be treated as a single entity for tax purposes.