On September 4th 1995, San Jose resident Pierre Omidyar created the foundation to what would soon become one of the most prominent figures on the Internet. The site was originally intended to be an online marketplace where individuals could sell goods or services, though was to become so much more in the decade that was to follow.
Omidyar’s creation was originally known as Auctionweb, and formed a small part of his personal site. The first item to be successfully sold was a broken laser pointer, which eventually sold for around $14 following a small bidding war. Astonished by the interest generated by this item, Omidyar realised that if he could sell a broken laser pointer, then it was quite possible he could sell anything.
In 1996, Pierre Omidyar hired Jeff Skoll as the company’s first president, who is now also attributed as the cofounder of eBay.
Two years after the creation of Auctionweb, the company officially changed its title to eBay. Originally, the site was owned by Omidyar’s consulting firm, Echo Bay Technology Group, and as such, Omidyar wished to use the name EchoBay.com. However, this domain was already taken by Echo Bay Mines, which led to the shortened version, eBay.com.
Already the site had over 200,000 members, and had also reached 1 million auctions earlier in the year. This was already phenomenal success, far beyond the early expectations of Omidyar, but unknown to him, the best was yet to come.
In May 1998, Meg Whitman joined eBay as CEO. Having studied at Harvard Business School, it was her role to maintain the success and growth eBay had so far experienced. Using her experience and business connections, Meg brought together a skilled management team, which went on to create a strong vision for the future of eBay. Later on in the same year, eBay enlisted on the stock market, giving investors the opportunity to share in eBay’s success.
Although eBay was already an established and reputable online business, their position was further enhanced by the acquisition of multiple companies over the following years. Since 1999, eBay has purchased and invested in several online auction websites and auction houses in order to gain a greater share of the market outside of the US. These included auction house Alando in 1999, Dutch competitor Marktplaats.nl in 2004 and Swedish online marketplace Tradera.com in 2006.
Other notable acquisitions included online payment system PayPal in July 2002 for $1.5 billion in stock and Voice Over IP company Skype in September 2005 for $2.6 billion in stock and cash. Not only have these purchases extended their reach outside of the online auction market, but have also illustrated the financial power held by eBay.
Currently, eBay has over 181 million registered users worldwide, and over $1,511 in goods are traded via eBay every second worldwide. These are impressive figures, especially when you look back 11 years to 1995 where it all started with one auction and few more than a handful of users.
However, eBay has had more than its fair share of controversies over the years, including several court cases that were highly publicised. eBay has also come under scrutiny over several of its auction practises, and a recent example is the process of ‘Bid sniping’, whereby buyers submit a high bid seconds before the close of an auction, thus giving other interested parties little or no time to counter the bid. Whilst eBay allow this practice, other auction sites such as Yahoo! extend the auction time should a last minute bid be placed.
A more common problem encountered by eBay, and more often its subsidiary PayPal, is fraud. In recent years, the number of Emails claiming to be from eBay and Paypal requesting personal information has increased dramatically. Whilst most Internet users are aware that these are fake, many still fall into the trap and give away personal details such as usernames and passwords, allowing those behind the scam to make purchases and steal money from PayPal and bank accounts.
It cannot be denied that eBay is one of the most successful ventures in the history of the Internet, and that its success is down to hard work, innovation and a highly motivated management team. The fact that eBay has not remained content with its status as the number one online auction site worldwide is credit to the hunger for success of those behind it.
With revenue topping $4 billion in 2005, it is clear that eBay continues to grow at an impressive rate. The growth from previous years is largely attributed to a massive increase in auctions, as the majority of revenue is generated from auction fees. This would suggest that the site will continue to grow and remain highly profitable for the foreseeable future.
Although it is hard to imagine what the future holds, there is no doubt that eBay is here to stay. From humble beginnings in Pierre Omidyar’s living room, eBay has risen become one of the largest and most successful websites in the history of the Internet.
http://www.auctionstyles.com
