Pierre Omidyar is responsible for the website eBay somewhere around 1995. It started in his living room. Since initial days only it meant to be a marketplace where buyers and sellers can do transactions conveniently. After 3 years, Meg Whitman joined Pierre and led the website to a new success level. Later on experienced people from some of the biggest companies also joined to make up a strong team for eBay. Some of the important names are Disney, Pepsico, and so on. Soon, the company started collaborating with a number of bigger brands such as GM, Sun, and so on. The average sale of the items also started increasing per day.
The Dynamic Business Model: eBay
(Source: Brandeis University)
eBay had a model of business that brought both sellers and buyers together at one single platform. Buyers can list their items on the website for sale and the buyers can cross-check these items and bid on them to buy. These items are arranged category-wise so that the buyers can easily search for their required items and can order them. The trading for the sellers is also made quite convenient and hence registering can be done in just a few minutes and they can instantly start listing the items online for the buyers.
It is easy for the buyers to search for the items and order the items. They just have to pay for the item and there are no such other charges for the bidding process. But on the other hand, the sellers do have to pay two different kinds of charges.
- An insertion fee is charged that is nonrefundable. This fee is charged when a seller lists an item on the site. The charges depend on the opening bid of the seller’s item.
- Another fee is charged for additional options that are provided for the item listed such as highlighted listing and so on that can promote the item on the site.
- The last charge is the Final Value that is charged on the final price of the item at the end of the auction.
The buyer and the seller are notified with the help of an email for all the steps of selling or buying the items. The transaction between the seller and the buyer takes place independently apart from the above-mentioned charges charged by the site.
The History Of eBay
It all started in the month of September of the year 1995 when Pierre Omidyar started with AuctionWeb. It is said that Pierre used to work on his personal computer at his home and hence the code was created and the site started in the living room of Pierre Omidyar.
The very first buyer of the site was Mark Fraser from Canada who purchased a laser pointer, though a broken one. This was listed by Pierre itself in 1995.
As per a story, the reason to create eBay was to help Pierre’s wife to collect the Pez candy dispensers. But later on, it was clarified that its story was a made-up one and the real concept of the site was to bring buyers and sellers together on an honest platform for transactions.
The operations of the company started growing so fast that it led up to a huge one in just one year itself. To support the operations of the company, the first employee was welcomed to the team. Chris Agarpao joined the team in June 1996 and he is still there with the company at present. In the same month, the company saw a sale of about $7.2 million. The success of the company grew up so much that the pressure increased excessively. This led the founder Pierre to quit his job to offer full-time attention to the website. Also, in the month of July, Jeff Skoll was welcomed to the team as the president of the company.
It was in October when both Pierre and Jeff rented their first office in San Jose’s Hamilton Avenue. This building still exists on the current campus of eBay.
Who doesn’t love cuddly toys or soft toys? Beanie Babies took the whole world by storm during May’1997 and eBay sold soft toys of about $500 million alone. It is said to be about more than 6% of the total sales of the site that year. It was this year only when the site introduced the Feedback Forum where consumers can express their feedback about the purchases done on the site. A platform of transparency was introduced where the customers can talk about the transactions and can talk about the experience freely. Also, this year the millionth item was sold by the site. This was a big bird toy that was sold from PBS’ Sesame Street.
A big event took place in the month of September when the name of the site was finally changed to eBay.
eBay needed a president and a CEO and this was completed by the joining of Meg Whitman in the team. The company started its customized ‘My eBay’ and also its first acquisition took place and Jump Inc was added up along with Up4Sale that is an online trading site. eBay went public in September 1998. The shares of the company were listed under NASDAQ with the symbol eBay. The expected price was about $18 but it broke all expectations and rose up to about $35 per share. Soon eBay foundation was established by the end of the year and the company shared about $30 million to various non-profit firms across the world.
Everything was going on so well but suddenly on the 10th of July in 1999, the site of eBay went drastically down at midnight. Meg Whitman woke up more than 50 engineers of the company and also at SunMicrosystems so that the problem can be fixed instantly. Finally, it took about 20 hours for the site to get started and become active again for the customers. By the month of July, the site also started in many other countries such as Germany, U.K, and Australia. The expansion did not stop just there and it kept on happening and as a result, by now eBay is available in about 180 countries throughout the world.
By the start of the year 2000, eBay expanded its office. With the expansion of the business, the offices also expanded in other buildings in San Jose. By that time, it was known as eBay Park and now it has become the headquarter of eBay. By April of this year, eBay motors started that was an online automotive store.
The business kept on expanding in different sectors and this was the reason how by June 2000, eBay University was opened. The aim of the university was to train the students on becoming successful sellers. This concept became quite successful and hence the courses started spreading out throughout the world slowly. The very next month, Half.com came in collaboration with eBay, and the selling of options such as music, movies, games, and books also started online.
In November 2000, the option ‘Buy It Now’ was introduced through which the customers can buy any items instantly at the price that is displayed. Soon, the API for the company was developed and now the developers throughout the world are able to customize the interface with the help of some of the best features.
eBay auctioned a very old Levi’s jeans. The pair of jeans was sold to Levi Strauss & Co., at a value of about $46,000 and this made history in fashion. The concept of the eBay store was introduced by the month of June this year. This concept allowed many of the people to start their customized business and that too at just a few dollars per month.
Soon, a jet was sold on eBay at a price of about $4.9 million and this was a new price record for the company. The company soon started the campaign of ‘Giving Work’ through which eBay donated about $10 million to support more than 30,000 charities including the victims of September 11.
June 2002 was the time when eBay had its first live conference in California. It brought together a number of people together such as buyers, sellers, developers, journalists, and so many other people who can be connected to eBay. The conference was proved to be great for networking and learning.
As the number of transactions was increasing, eBay was looking forward to some payment gateways that could offer the customers the guarantee of security. On this note, it soon acquired PayPal which is one of the most innovative payment gateways that is not only secure but also convenient. PayPal was there with eBay for a long time and finally, it came up as an independent one in the year 2015.
By the year 2003, eBay raised up to about $500 million through its program of ‘Giving Works’. All the amount was soon donated to different charities.
By the month of June, eBay started the PayPal Buyer Protection program in order to offer even better and secure services for the transactions of the customers.
At an event in Orlando, eBay came up with its live song that became an instant hit. Soon Jim Griffith, the 11th employee of the company came up with the eBay Bible and it was officially published too.
By the end of 2003, eBay was claimed to be at the 8th position on the Fortune’s List. The position was provided to the company for being the eighth fastest-growing company of that year.
The year 2004 was the year of several unique things and it all started with the month of February. The campaign of ‘Dream Big, Save Big’ was started that was mainly for the small business owners at eBay. Again, in October, the campaign ‘The Power Of All Of Us’ was launched in North America that showed up the real power of the e-commerce business and this also highlighted the goodness of people so that the trust in e-commerce can grow.
eBay saw a number of activities by the end of the year. Jeff Jordan, who was the General Manager and the Senior Vice-President of eBay in North America became the President of the payment service PayPal. Rent.com was acquired by eBay that was then one of the best websites for renting houses in the United States.
2005 began by appointing John Donahoe as the President of the marketplace of eBay. Soon in March, Kijiji, a local classified was started by the site. Kijiji is mainly a Swahili word that means ‘village’. The concept was to create a social platform where the users of the site can connect to their neighbors for the search of items that can be bought on the site. Soon this classified spread over too many of the countries and now it is also known as the eBay classifieds.
When the classified got viral and were spreading out to many countries, Gumtree was acquired by eBay which was one of the leading sites globally for classified-listing services.
eBay celebrated its 10th birthday finally in September 2005. In the same month, the ‘Main Street’ program was started which was a community of advocates who dealt with various policies affecting the online transactions of the store. By now the number of members in the community has crossed over 275,000.
By the next month, eBay acquired Skype. Yes, it can be said that Skype came to be known as a communication platform through eBay.
The year started with a very big step of joining the United Nations Global Compact. The global corporate initiative helped eBay in demonstrating the power of e-commerce and the various positive impacts on society as well as the environment. February 2006 made news for eBay when a Gigayacht was auctioned on the site and was finally sold at about $168 million. As per the news report, this was the most expensive item designed by Frank Mulder that was sold on the site.
By March, PayPal started its mobile application that allowed so many users to transact money online easily. Soon, by June, Rajiv Dutta, who was initially the President for Skype, became the next President for the payment service PayPal. Read the Message from Rajiv Dutta Live at Announcement.
At beginning of this year, eBay acquired StubHub and hence became one of the largest online marketplaces across the world selling tickets. Somewhere in July, the eBay team introduced the Green Team. It all started with about 40 employees from San Jose. As the name of the team suggests, the main concept of the team was to practice and implement actions that are helpful for the environment and can help the planet to stay green. Also, the aim of the team was to let other people of the community learn about such actions that can help the environment in different ways.
The President for PayPal changed again in January and this time it was Scott Thompson, who was the Vice President and the Chief Technology Officer at PayPal itself. John Donahoe, the President of eBay Marketplaces succeeded Meg Whitman and became the CEO and the President for eBay Inc. Also, the magazine ‘Institutional Investor’ named him as the best internet CEO that year.
eBay Inc. again made its place in the listing of the Fortune Magazine. This time the company came up in the list of the best 100 companies to work for. eBay came up in this listing due to its amazing working culture and environment.
eBay always took care of the environment and this was proven in the month of May when the company came up with the greenest building. The campus for PayPal in San Jose became the first Gold-certified building from LEED due to its green campaigns. Soon, next month, PayPal celebrated its 10th year anniversary with about 150 million users operating from about 190 different countries throughout the world. In the same month, eBay was available on iPhone in the form of an application so that the users can use the service through their mobile phones.
The following month, Lorrie Norrington became the next president for eBay Marketplaces. eBay was the first such company that was awarded the most prestigious National Medal of Technology & Innovation in America. The honor ceremony took place in September for the great contribution that eBay had.
A new service was started in October and this was known as ‘Bill Me Later’ together by PayPal and eBay. This option is the same that is better known as PayPal credit today. It gave the buyers even more flexible payment options while making their shopping online.
Do you know in the eBay office, there is a conference hall that is named Jack Sheng? This is so because Jack Sheng became the first seller who had a record of about 1,000,000 feedback scores on eBay Marketplaces in November 2008.
The year 2009 began with great news again for the company. The Human Rights Campaign rated eBay as 100% for its workplace and commitment. Also, WIN or the Women’s Initiative Network was started that was great support for the women who wished to learn, grow and make a great career of their own.
— eBay in Deutschland (@eBayDE_News) January 3, 2018
Soon by November eBay started a new application to offers deals on the transactions made for both the buyers as well as the sellers on the platform.
eBay became available on iPad to provide the customers with a great visual by July. By the end of this year, eBay acquired Milo.com which is one of the leaders in online search options. The acquisition helped eBay in launching the local products easily on the site.
The Opportunity Project was started for various entrepreneurs who wish to expand their economic opportunities in the markets and communities of the U.S. Soon GSI Commerce was acquired by the company that now has become eBay Enterprise. It offers various facilities such as omnichannel operations, marketing solutions, and commerce technologies to various retailers of varied sizes and even to brands.
Ethisphere Institute honored the company to be one of the most ethical companies in the world.
Soon, there were certain announcements made by the company that was fulfilled in the coming few days. Some of them were about purchasing the stake in GittiGidiyor, the online marketplace of Turkey, and acquiring Magento.
By mid of the year, eBay acquired Zong, which is a billing platform for mobiles. In the same year, Devin Wenig, the former CEO of the Thomson Reuters Markets became the President for the eBay Marketplaces.
PayPal Here was announced that is a mobile-based payment solution and allows any small business owners to accept payment of any amount and in different payment modes. David Marcus soon became the President of eBay in April.
In June, a power lunch for the annual charity auction was organized with the help of Warren Buffett worth $3.46 million.
By August, eBay started with the ‘Global Shipping Program’ that helped the sellers of the U.S. to grow high by shipping items easily to the international buyers at various parts of the world.
PayPal started a new program as per which the business owners can get loans for their business purposes. After the program became quite successful, it also expanded in many other countries such as U.K. and Australia.
Braintree was soon acquired by eBay to strengthen up the payment gateway along with PayPal. Soon, Bloom Energy Servers were established in the first data center of the company to continue with the commitment of cleaner energy sources.
By the end of this year, eBay came up with the physical storefronts at the Westfield Shopping Mall of San Francisco. Here, the customers can browse from the varied items on a window screen and then can make the payment through PayPal and can also opt for a home delivery option.
The company came up with the ‘Machine Translation Tools’ that helped the sellers in cross-border commerce. This helped the sellers to reach out to varied consumers at varied places such as Latin America, Russia, and many others.
By the month of June, it was found that PayPal was available in more than 203 countries, in which 10 of the markets were achieved in 2014.
By July, eBay joined hands with Sotheby’s so that the arts of mid-price can also be auctioned. A copy of the Superman comic was sold in August 2014 for the amount of $3.2 million. It is said to be the most expensive comic ever sold by now.
Soon, eBay and PayPal planned to become two independent companies by 2015. Dan Schulman became the CEO and the President of PayPal.
Finally, PayPal and eBay got listed separately on the Nasdaq Stock Exchange. Devin Wenig becomes the fourth CEO of eBay. This was the year when eBay celebrated its 20th year of anniversary. EBay Inc. sold eBay Enterprise for $925 million to the business consortium.
eBay partnered with BigCommerce and this allowed easy managing of the inventory and listing of the products on the site so that more than 169 million customers can be provided easy access throughout the world.
Also, Expertmaker was acquired for various functions such as machine learning, artificial intelligence, and many others.
Soon ‘Mainstreet’ opens up with the full flow at the headquarters in San Jose. Also, Ticketbis, the largest marketplace for tickets is acquired by StubHub in July so that the business grows up to various locations such as the markets of Asia Pacific, Europe, and Latin America.
eBay launches Seller Hub in August in order to simplify the selling scale of the business of the sellers. ShopBot, a personal assistant is launched on eBay with whom the users can have a conversation on various places such as Facebook Messenger for a various shopping experience.
Corrigon, virtual search technology is purchased by eBay. The same year, eBay joined the pledge of the White House for closing the gender wage gap. Also, eBay collaborated with Steph Curry to rise up more funds at charitable auctions.
Recently, eBay launched its personalized homepage for the site. It allows the customers to search for the items in a convenient way. Also, soon the concept of ‘Guaranteed Delivery’ announced where the buyers were able to filter options and choose from various delivery modes. Similarly, another feature was announced that offered the customers the guarantee of the price match. The ‘Authenticate Program’ was also launched that offered guarantees for the authenticity of the items available.
Next is the ‘Image Search’ that came into the trend. In place of text search, users can simply click a picture and upload it to get an item matching it. Kiva marketplace also came in collaboration with eBay.
The Current Scenario of eBay
Currently, the program ‘Retail Revival’ was launched in the city of Akron. The program is mainly to help the local entrepreneurs in growing the online business in the global market. Giosis is acquired by eBay in February to strengthen the inventory in Japan marketplace. Also, the Augmented Reality solution was launched that allowed multiple sellers to operate. By September of 2018, the company started the first work-from-home official program for the employees. The ‘Managed Payments’ offered a new landmark in the payment journey of the company.
The Future Of eBay
The performance of eBay has been always great and hence they have seen glorified events quite always. The team has a number of other future plans also for the long run in the coming years.
- The company has aimed for a stock price of $45 per stock,
- The company has been planning on a number of areas for expanding the features of eBay Authenticate,
- Also, there have been plans going on for adding up new technologies to the site that improves artificial intelligence,
- It is also heard about accepting Bitcoin for payment mode,
- The company has also aimed at changing some of the seller policies such as the fee policies, listings, watermarks, content policy, and many others,
- It may happen that eBay and PayPal may separate from each other in the coming years.
It can be said that the year 2018 is quite unpredictable for the company eBay. The company came up with so many changes in the features and policies that proved to be quite successful and profitable for the company. The team has planned up so many other new changes also that may bring up even more profit to the company. It is hoped that similar to 2018, there may be more such unpredictable changes that the company may come up with in the next few years.
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— eBay (@eBay) February 16, 2019