EBay
From ePedia, the electronic encyclopedia
eBay Inc. (NASDAQ: EBAY) manages an online auction and shopping website, where people buy and sell goods and services worldwide.
Origins and early history
Founded in San Jose on September 4, 1995 by Pierre Omidyar as Auctionweb, part of a larger personal site that included, among other things, Omidyar's own tongue-in-cheek tribute to the Ebola virus.
The first item sold was Omidyar's broken laser pointer for $14.83. Astonished, he contacted the winning bidder and asked, "did he not understand the laser pointer was broken?" Omidyar received the following email in reply: "I'm a collector of broken laser pointers." (The frequently repeated story that eBay was founded to help Omidyar's fiancee trade PEZ Candy dispensers was fabricated by a public relations manager in 1997 to interest the media. This was revealed in Adam Cohen's 2002 book and confirmed by eBay.)
Jeff Skoll was hired as the company's first president and full-time employee in 1996. The company officially changed its name to eBay in September 1997. Originally, the site belonged to Echo Bay Technology Group, Omidyar's consulting firm. Omidyar had tried to register the domain name EchoBay.com but found it already taken by the Echo Bay Mines, a gold mining company, so he shortened it to his second choice, eBay.com.
Items and services
Millions of collectibles, appliances, computers, furniture, equipment, vehicles, and other miscellaneous items are listed, bought, and sold daily. Some items are rare and valuable, while many others are dusty gizmos that would have been discarded if not for the thousands of eager bidders worldwide, proving that if one has a big enough market, one will find someone willing to buy anything. Anything can be sold as long as it is not illegal or on the eBay banned list. Services and intangibles can be sold too. It is fair to say that eBay has revolutionized the collectibles market by bringing together buyers and sellers internationally in a huge, never-ending yard sale and auction. Large international companies, such as IBM, sell their newest products and offer services on eBay using competitive auctions and fixed-priced storefronts. Regional searches of the database make shipping slightly more rapid or cheaper. Software developers can create applications that integrate with eBay through the eBay API by joining the eBay Developers Program. As of June 2005, there were over 15,000 members in the eBay Developers Program, comprising a broad range of companies creating software applications to support eBay buyers and sellers as well as eBay Affiliates.
In June 2004, eBay prohibited the sale and auction of both alcohol and tobacco products on the British site ebay.co.uk. Some exceptions to this rule are made for rare aged liquors, where a bottle may sell for many times higher than its actual value in alcohol.
There has also been controversy regarding items put up for bid that violate ethical standards. In late 1999 a man offered one of his kidneys for auction on eBay, attempting to profit from the potentially lucrative (and, in the United States, illegal) market for transplantable human organs. On other occasions, people and even entire towns have been listed, often as a joke. In general, the company removes auctions that violate its terms of service agreement within a short time after hearing of the auction from an outsider; the company's policy is to not pre-approve transactions. eBay is also an easy place for unscrupulous sellers to market counterfeit merchandise, which can be difficult for novice buyers to distinguish without careful study of the auction description.
eBay's Latin American partner is MercadoLibre.
eBay's main rivals are Amazon.com Marketplace and Yahoo! Auctions.
Profit and transactions
eBay generates revenue from a number of fees. There are fees to list a product and fees when the product sells. The eBay fee system is quite complex and takes $0.25 to $80 per listing and 2-8% of the final price. In addition, eBay now owns the PayPal payment system which has fees of its own.
The company's current business strategy includes increasing revenue by increasing international trade within the eBay system. eBay has already expanded to almost two dozen countries including China and India. The only place where expansion failed was Japan where Yahoo had a head start.
Acquisitions
Origins and early history
Founded in San Jose on September 4, 1995 by Pierre Omidyar as Auctionweb, part of a larger personal site that included, among other things, Omidyar's own tongue-in-cheek tribute to the Ebola virus.
The first item sold was Omidyar's broken laser pointer for $14.83. Astonished, he contacted the winning bidder and asked, "did he not understand the laser pointer was broken?" Omidyar received the following email in reply: "I'm a collector of broken laser pointers." (The frequently repeated story that eBay was founded to help Omidyar's fiancee trade PEZ Candy dispensers was fabricated by a public relations manager in 1997 to interest the media. This was revealed in Adam Cohen's 2002 book and confirmed by eBay.)
Jeff Skoll was hired as the company's first president and full-time employee in 1996. The company officially changed its name to eBay in September 1997. Originally, the site belonged to Echo Bay Technology Group, Omidyar's consulting firm. Omidyar had tried to register the domain name EchoBay.com but found it already taken by the Echo Bay Mines, a gold mining company, so he shortened it to his second choice, eBay.com.
Items and services
Millions of collectibles, appliances, computers, furniture, equipment, vehicles, and other miscellaneous items are listed, bought, and sold daily. Some items are rare and valuable, while many others are dusty gizmos that would have been discarded if not for the thousands of eager bidders worldwide, proving that if one has a big enough market, one will find someone willing to buy anything. Anything can be sold as long as it is not illegal or on the eBay banned list. Services and intangibles can be sold too. It is fair to say that eBay has revolutionized the collectibles market by bringing together buyers and sellers internationally in a huge, never-ending yard sale and auction. Large international companies, such as IBM, sell their newest products and offer services on eBay using competitive auctions and fixed-priced storefronts. Regional searches of the database make shipping slightly more rapid or cheaper. Software developers can create applications that integrate with eBay through the eBay API by joining the eBay Developers Program. As of June 2005, there were over 15,000 members in the eBay Developers Program, comprising a broad range of companies creating software applications to support eBay buyers and sellers as well as eBay Affiliates.
In June 2004, eBay prohibited the sale and auction of both alcohol and tobacco products on the British site ebay.co.uk. Some exceptions to this rule are made for rare aged liquors, where a bottle may sell for many times higher than its actual value in alcohol.
There has also been controversy regarding items put up for bid that violate ethical standards. In late 1999 a man offered one of his kidneys for auction on eBay, attempting to profit from the potentially lucrative (and, in the United States, illegal) market for transplantable human organs. On other occasions, people and even entire towns have been listed, often as a joke. In general, the company removes auctions that violate its terms of service agreement within a short time after hearing of the auction from an outsider; the company's policy is to not pre-approve transactions. eBay is also an easy place for unscrupulous sellers to market counterfeit merchandise, which can be difficult for novice buyers to distinguish without careful study of the auction description.
eBay's Latin American partner is MercadoLibre.
eBay's main rivals are Amazon.com Marketplace and Yahoo! Auctions.
Profit and transactions
eBay generates revenue from a number of fees. There are fees to list a product and fees when the product sells. The eBay fee system is quite complex and takes $0.25 to $80 per listing and 2-8% of the final price. In addition, eBay now owns the PayPal payment system which has fees of its own.
The company's current business strategy includes increasing revenue by increasing international trade within the eBay system. eBay has already expanded to almost two dozen countries including China and India. The only place where expansion failed was Japan where Yahoo had a head start.
Acquisitions
- In May, 1999, eBay acquired the online payment service Billpoint, which it shut down after acquiring PayPal.
- In 1999, eBay acquired the auction house Butterfield & Butterfield, which it sold in 2002 to Bonhams.
- In 1999, eBay acquired the auction house Alando for $43 million, which changed then to eBay Germany.
- In June, 2000, eBay acquired Half.com, which was later integrated with the eBay Marketplace.
- In August, 2001, eBay acquired Mercado Libre, Lokau and iBazar, Latin Americas auction sites.
- In July, 2002, eBay acquired PayPal, for $1.5 billion in stock.
- On July 11, 2003 eBay Inc. acquired EachNet, a leading ecommerce company in China, paying approximately $150 million in cash.
- On June 22, 2004, eBay acquired all outstanding shares of Baazee.com, an Indian auction site for approximately US $50 million in cash, plus acquisition costs.
- On August 13, 2004, eBay took a 25% stake in craigslist.org by buying out an existing shareholder who was once a craigslist employee.
- In September 2004, eBay moved forward on its acquisition of Korean rival Internet Auction Co. (IAC), buying nearly 3 million shares of the Korean online trading company for 125,000 Korean won (about US$109) per share.
- In November 2004, eBay acquired Marktplaats.nl for €225 million. This was a Dutch competitor which had a 80% market share in the Netherlands, by concentrating more on small ads than actual auctions.
- On December 16, 2004, eBay acquired rent.com for $30 million in cash and $385 million in ebay stock.
- In May 2005, eBay acquired Gumtree, a network of UK local city classifieds sites.
- In June 2005, eBay acquired Shopping.com, an online comparison site for $635 Million USD.
- In September 2005, eBay bought Skype, a VoIP company, for $2.6 billion in stock and cash.
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