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Volume 32, Issue 3

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Monday, 19 November 2007 22:10

It Wasn't a Hurricane or an Earthquake, But For Some E-Commerce Businesses It Might As Well Have Bee

Written by  Ronald E. Freedman

It doesn't have to be a Level 5 Hurricane or measure 7.0 on the Richter scale to be considered a major disaster anymore. On June 14th, eBay executives, employees, traders, investors, the media, and the world watched as eBay stock value plummeted by $4 billion dollars. The devaluation occurred because of an all-day (22-hour) outage on its auction site. Executives at eBay estimate that the impact could include a drop of $3 to $5 million in sales. Every hour that eBay was down resulted in an estimated $200,000 in lost sales. That number doesn't include the potential loss of their customers to competitors like Amazon.com and Yahoo! that have online auction sites available. Those types of losses are typically felt in the more traditional disasters such as earthquakes or hurricanes. As more and more online businesses emerge - the need for contingency planning will become apparent for the e-commerce industry. In