The global e-commerce site eBay has grown into a phenomenon in the 24 years since its launch at the start of the dot-com boom. Currently valued at an estimated $42 billion, the site was launched in 1995 by Pierre Omidyar.
The Paris-born entrepreneur was only 28 when he founded eBay. Initially launched on 3rd September 1995, it was known as Auction Web. It started life as a personal hobby for Omidyar, whose family had moved to the United States when he was four. He developed an interest in computers while a student at the Potomac School in McLean, Virginia.
In 1988, he graduated from Tufts University in Massachusetts with a bachelor’s degree in computer science. He first worked for Apple computers’ subsidiary Claris. He began writing original computer code for an online site to enable direct auctions between individuals.
The first simple prototype was created on his personal web page. He spent Labour Day weekend at home, completing the code before the auction site went public. His first sale was a laser pointer, which Canadian Mark Fraser bought for $14.83, even though it was listed as being broken!
Auction Web was the first online auction site of its kind and it took off immediately. Omidyar’s concept was to bring buyers together in an “honest and open marketplace”. People began listing a wide variety of goods and the selling fees enabled Omidyar to expand the site further.
His living room at his home in San Jose, California, was his first office. In June 1996, he hired eBay’s first employee, Chris Agarpao, to help coordinate the company’s growing operations. By October 1996, eBay had become so popular that Omidyar had to move from his living room to the company’s first rented office suite at 1025 Hamilton Avenue in San Jose.
Leaving feedback was introduced in 1997, so members could rate their transactions – creating an “open and confident” virtual community. The same year, eBay sold its millionth item, a Sesame Street “Big Bird” Jack-in-the-box toy, only two years after the site’s launch. The original name of Auction Web was scrapped in September 1997. eBay was born!
In September 1998, eBay went public, listing shares under the symbol “EBAY” on NASDAQ. Omidyar had anticipated they would trade at $18, but the shares surpassed all expectations and reached $53.50 on the first day. In December 1998, The eBay Foundation was founded. Over the years, it has given more than $30 million to non-profit organisations across the world.
The site’s global expansion began in earnest in 1999, when sites were launched in the UK, Germany and Australia. Today, eBay is available in 180 countries. In 2000, Omidyar launched eBay university courses to teach people how to become a master seller. In June 2001, eBay Stores were introduced, enabling users to run their own online business at a low cost.
In July 2002, eBay acquired PayPal, an innovative system to make secure online payments. In March 2006, PayPal went mobile, enabling users to send money on the move. In 2008, when eBay first became an app, PayPal also launched a mobile app for iOS. It was one of the first apps in the Apple store. The partnership between eBay and PayPal lasted until July 2015, when PayPal branched off into an independent company.
In May 2005, eBay acquired the classified listing site, Gumtree, establishing its presence in the classifieds market. In September 2008, eBay was the first internet company to receive the United States’ highest honour for technological achievement, the National Medal of Technology and Innovation.
In August 2012, eBay’s Global Shipping Programme was launched, helping sellers to expand their business faster by making it simple to sell to international buyers.
Key to success
Throughout the 21st century, eBay has continued to grow. With its headquarters now based at 2025 Hamilton Avenue, San Jose, it has opened new offices at 62 locations, spanning 35 countries.
Omidyar has become a multi-billionaire, with an estimated net worth of $12.5 billion, as of December 2019. Serving as eBay chairman from 1998 to 2015, as a result of the site’s global triumph, he was a billionaire by the time he was 31.
The key to eBay’s success has been the way it has kept pace with technology and listened to customer feedback. E-commerce has changed massively since eBay was founded, but the site has adapted well. The seller and buyer processes have been simplified to create a better user experience and new features have been introduced, such as the automatic re-listing of unsold items and the option of making an offer to avoid waiting for the auction to end.
eBay v Amazon
In recent years, eBay and Amazon have been battling it out for market supremacy. In the early years, eBay was the dominant force, but Amazon has grown massively in terms of sales. However, although both companies rely on income from the sales of third party goods, that’s where the similarity ends.
While Amazon is primarily known for the sale of new merchandise and everyday items, eBay has always provided a platform for selling used and unusual items. Both companies are continuing to evolve, but as far as consumers are concerned, there are advantages to having both platforms in the marketplace. It seems likely both will continue to exist side-by-side, at least for the foreseeable future.
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