During the mid-1990’s as more and more people gained access to the Internet, online retailers began to proliferate. On September 3, 1995, computer programmer Pierre Omidyar and businessman Jeffrey Skoll launched AuctionWeb, later known as eBay, and the largest online auction house was born.

In concept, eBay is very similar to traditional Auctions, onlineauction houses, except that its bidding process is handled by online software and the bidders and sellers can be located anywhere in the world. Retail tradeeBay earns its profits from insertion and final value fees on items listed by the sellers.eBayInternet;retailersOmidyar, PierreSkoll, JeffreyInternet;retailersOmidyar, PierreSkoll, Jeffrey

This eBay teddy bear celebrates the company’s ten-year anniversary in 2005.

(AP/Wide World Photos)

The eBay auction site started with 41,000 registered users in 1996 and a merchandise volume of $7.2 million. Meg Whitman joined eBay in 1998 as president and chief executive officer (CEO), and in September, 1998, eBay had its initial public stock offering. In April, 1999, the company bought the auction house of Butterfield and Butterfield for $260 million to help extend its auctions on a global scale. eBay Motors was launched, and by 2006, 2 million vehicles had been sold. In 2002, eBay purchased Paypal, an electronic payment service, for $1.5 billion. Since then, Paypal has become one of the preferred methods of payment for online purchases and is an example of how eBay influences other online retailers. In 2007, Paypal continued to expand by handling almost $50 billion in payments, an increase of more than 30 percent from the prior year, indicating the growing popularity of electronic payment services among consumers and retailers. In June, 2007, eBay, in partnership with GE Money, the financial services unit of General Electric, launched an eBay MasterCard rewards credit card.

As of 2006, eBay had a gross merchandise volume of $52.5 billion, with 222 million registered eBay users and 13,200 employees. It has spawned much competition, and as eBay’s fees continue to rise, several smaller online auction houses are seeing an increase in business. Paypal processed $6.1 billion in payments during the fourth quarter of 2007 for World Wide Web retailers, such as Dell, Blue Nile, and Yahoo!’s shopping sites. Changes in 2008 to eBay’s fee structure and feedback system have resulted in notable dissatisfaction, negative press, and boycotts. In March, 2008, CEO Whitman resigned, although she remained on the board, and was replaced by John Donahue. In October, the company announced employee layoffs of 10 percent of its global workforce and acquisitions of an online payment company and online classified businesses. eBay’s third-quarter revenues were on the low end of projections, partly because of the loss of consumer confidence caused by the financial crisis and also because of competitors.

• Griffith, Jim. The Official eBay Bible: The Newly Revised and Updated Version of the Most Comprehensive eBay How-to Manual for Everyone from First-Time Users to eBay Experts. 3d ed. New York: Gotham, 2007.
• Hillis, Ken, Michael Petit, and Nathan Scott Epley, eds. Everyday eBay: Culture, Collecting, and Desire. New York: Routledge, 2006.
• Russell, Cheryl L. eBay Income: How Anyone of Any Age, Location, and/or Background Can Build a Highly Profitable Online Business with eBay. Ocala, Fla.: Atlantic, 2006.

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