The History of eBay – Pierre Omidyar And His Amazing Start Up Story

A History of eBay.com

eBay‘s origins lie in San Jose, California. On September 5th, 1995, the American computer programmer named Pierre Omidyar founded a personal auction website called – AuctionWeb. One of the first items that were sold on the site was a not working laser pointer, at the price of $14.83. Astonished, Pierre contacted the buyer and asked him if he really understood that the pointer he bought was actually broken. In the email in which the buyer responded, he wrote: “I’m a collector of broken laser pointers.” Actually, eBay was just a side work for Pierre. One day his Internet provider told him, that he had to upgrade his account to  “business type”, because of the big traffic to his auction site. The price increase would be from $30 monthly to 8 times more – $250 per month. This made Omidyar start charging the users of the site, who eventually wanted to pay him with no hashes. A big number of signed checks started flowing into his mailbox. So big, that he couldn’t handle them and this is how he hired his first employer –  Chris Agarpao. A year later, in 1996, Omidyar hired Jeffrey Skoll, who served as the company’s first president. Later that year, they began dealing with Electronic Travel Auction in order to sell plane tickets and travel accessories on the site. This partnership turned out to be very extremely profitable for both parties. Till the end of 1996, AuctionWeb hosted about a quarter of a million auctions and this number was rapidly growing. Only in January 1997, the number of hosted auctions for tickets reached an astonishing two million.

eBay’s success was assured from then on out. In the same successful year, eBay arranged nearly seven million dollars of funding from Benchmark Capital, a venture capitalist firm, and was able to use that money to expand its horizons. Shortly thereafter, eBay hired Meg Whitman as the company’s President and CEO. In March 1998, eBay earned its 500,000th user, held 30 employees, and enjoyed revenues of over four and a half million dollars in the United States. eBay went public as a company on September 21st, 1998. The company’s founder, Omidyar, and its first president, Jeffrey Skoll, who held majority stakes in the company, became immensely wealthy. By the end of the first trading day, eBay was trading for $53.50 a share.

eBay’s next move was to acquire other companies that could help it run its business. For instance, eBay purchased iBazar, a European version of eBay. In September 2001 eBay acquired 19.5% of MercadoLibre, a big auction site in Latin America, expanding its business on another continent. In February of 2002; not even a year later, eBay purchased the popular online payment entity PayPal. Currently, PayPal serves as a favored method for both eBay buyers and sellers, meaning that eBay’s investment in the company had certainly paid off. In 2008, the company had over 15,000 employees and revenues of over $7.7 billion. However, the company lost Meg Whitman to politics that year, so John Donahoe took over as President and CEO in April of 2008 began. In the next year, eBay sold Skype for $2.75 billion with a 30% holding on the company’s equity.

In 2010, eBay successfully acquired the German online shopping club brands4friends.de for $197 million. This move was meant to secure eBay’s position in the fashion industry overseas, which seems like a shocking move for an auction site but was carried out by the major auction site nonetheless. By 2012, eBay enjoyed $3.3 billion in revenue in its first fiscal quarter of business. This was a nearly 30% increase from the first quarter, showing that eBay, though it is a large company, still has room to grow—and it will take advantage of that room.

Fun Facts About the Company

*  One of the first items sold on eBay was a broken laser pointer for $14.83
*  AuctionWeb became eBay in September 1997. The name comes from Echo Bay Technology Group, one of Omidyar’s companies.
*  One time, an eBay seller offered a kidney for sale, which was promptly banned as this is illegal organ trafficking.
*  It is illegal to sell Nazi paraphernalia and Native American remains on eBay.
*  At one point, a man tried to sell New Zealand on eBay. It was valued at $3,000 when eBay shut down the auction.

Today eBay is the biggest online auction site in the world, having more than 132 million registered users (2024) from around the globe.

Here are some more stats about eBay today (2024)

Revenue and Financial Performance

• Revenue: eBay generated $10.1 billion in revenue in 2023, marking a 4.1% increase from the previous year. This revenue includes income from various services and seller fees.
• Gross Merchandise Volume (GMV): The GMV, which represents the total value of goods sold on the platform, was $73.2 billion in 2023. This figure remained stable compared to 2022.

User Base and Demographics

• Active Users: eBay has around 132 million active users worldwide, with a significant portion based in the United States.
• Mobile Users: Mobile commerce is crucial for eBay, with 55% of its traffic coming from mobile devices. The platform emphasizes optimizing its mobile app to enhance user experience and drive sales.

Seller Statistics

• Active Sellers: There are approximately 18.3 million active sellers on eBay. This diverse seller base contributes to the platform’s extensive product listings.
• Listings: eBay hosts around 2 billion listings, offering a vast array of products across numerous categories. The electronics and accessories category remains the top-selling segment.

Key Features and Trends

• Promoted Listings: More than 940,000 sellers use eBay’s promoted listings feature to enhance their product visibility. This service has proven effective in boosting sales.
• Free Shipping: Offering free shipping is a common strategy on eBay, with 71% of all purchases being shipped for free. This tactic helps attract more buyers and improve listing visibility.

Market Position

• E-commerce Market Share: eBay holds a 3% share of the global e-commerce market. While smaller than giants like Amazon, it remains a significant player, especially in niche markets.
• Top Selling Items: Disposable face masks, cell phones, and men’s fragrances are among the top-selling items, reflecting current consumer trends.

In conclusion, eBay offers a convenient way for shoppers to find nearly anything they can think of, at an affordable price. It provides some of the cheapest prices in the online marketplace, as well as targeted customer protection services. It’s no wonder that eBay has become such a popular destination to shop online.

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