eBay Inc. – Company Information
eBay Inc., based in San Jose, California, is the holding company that manages eBay.com, the online auction and shopping website where businesses and individuals buy and sell a wide range of goods and services globally.
eBay.com also offers “Buy It Now” shopping, online classified ads, online money transfers (PayPal), online ticket trading, and other services.
According to eBay Inc., the business has three main parts with their own distinct brand. eBay allows people and businesses to buy and sell online; PayPal enables person-to-person or business-to-business digital payments; eBay Enterprises enables retailing, commerce and digital marketing for merchants.
eBay charges traders either according to the value of their invoice or for listing items.
According to alexa.com on October 14, 2014, ebay.com is the 26th largest website in the world (by traffic).
The history of eBay
eBay was founded by Pierre Morad Omidyar (born: 1967), a Paris-born French-Iranian computer scientist who moved to the United States when he was a child.
Mr. Omidyar founded AuctionWeb in 1995 as part of a personal website. He was surprised when somebody bought a broken laser pointer on his site for $14.93, his first sale. He wrote to the bidder explaining to him that the laser was broken. The bidder replied by email with “I’m a collector of broken laser pointers.”
Omidyar’s website started off simply as a side hobby until his ISP (Internet service provider) told him that due to the high traffic he would need to upgrade to a business account. This meant the monthly fee he had to pay jumped from $30 per month to $250, which forced him to begin charging people for using AuctionWeb.
The ‘side hobby’ started bringing in an income. Mr. Omidyar was surprised that nobody complained about having to pay a fee. His first employee was Chris Agarpao, who was taken on to process the checks sent in from customers.
It all started off as a ‘side-hobby’ in 1995 called AuctionWeb.
In early 1996, Jeffrey Skoll joined the company as President. Later that year, AuctionWeb signed a licensing deal with Electronic Travel Auction to use SmartMarket Technology to sell travel products.
The business grew rapidly; in just the first month of 1997 the website hosted more than 2 million auctions, compared to 0.25 million during the whole of the previous year.
Name changed to eBay, 1997
The company’s name was changed to eBay in September 1997. The website had initially belonged to Mr. Omidyar’s consulting firm Echo Bay Technology Group. Echo Bay Mines had already taken the domain name echobay.com, so he looked for another name, and chose a shortened version – eBay.
Venture capital firm Benchmark Capital invested $6.7 million in eBay in 1997.
In March 1998, Meg Whitman was taken on as eBay’s President and Chief Executive Officer, a business which had 30 workers, more than half a million users, and sales exceeding $4.7 million just in the US.
Mr. Omidyar and Mr. Skill became billionaires overnight when the company was floated on September 21, 1998. On its first day of trading its target share price of $18 shot up to $53.50.
From 2000 onwards eBay expanded from selling just collectibles to virtually any item that people might bid for.
iBazar, a European auction site was acquired in February 2002. PayPal was purchased in October 2002.
In September 2005, online video chat and voice calls service Skype was acquired for $2.6 billion.
By 2008, eBay had become a multinational giant with over one hundred million of registered users, more than 15,000 workers and sales reaching $7.7 billion.
In January 2008, Ms. Whitman stepped down and John Donahoe became President and CEO.
In September 2009, Canada Pension Plan Investment Board, Silver Lake, and Andreessen Horowitz bought a 65% stake in Skype for $1.9 billion. Skype was later acquired completely by Microsoft.
eBay has had 3 Presidents and CEOs. Jeffrey Skoll (left), Meg Whitman, and John Donahoe (right, current President and CEO).
eBay to spin off PayPal
In September 2014, eBay announced that PayPal would be spun off in the second half of 2015 to become an independent publicly traded company. According to eBay’s Board of Directors, the decision was made so that growth could be optimized, as well as shareholder value for both entities.
Regarding the divestiture, John Donahoe, said:
“Ebay and PayPal are two great businesses with leading global positions in commerce and payments. For more than a decade eBay and PayPal have mutually benefited from being part of one company, creating substantial shareholder value.”
“However, a thorough strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively. The industry landscape is changing, and each business faces different competitive opportunities and challenges.”
eBay mobile ads
After deciding they needed improving-on two years ago, eBay mobile ads would make a comeback for smartphones and tablets, the company announced in September 2014.
eBay said it planned to introduce the ad app in H2 2014. With one of the world’s largest marketplaces and about 150 million active users who spent nearly $75 billion in 2013, the company believes it is unique in possessing 1st-party data, and has insight into what consumers and sellers are interested in.
eBay wrote in a statement:
“By partnering with eBay, you’ll have access to over 60 predefined audience segments, all powered by our real commerce data. If your ideal audience isn’t one of our predefined segments, no problem! We can create a custom segment for you or uncover your ideal audience via eBay’s Audience Discovery tool. Whatever segment you’re interested in, our data and media solutions will help you reach them – both on and off eBay.”