EBay

eBay Inc.

File:Ebay logo.svg Logo used since 2012
Company type	Public
Industry	E-commerce
Founded	September 3, 1995 (1995-09-03) in San Jose, California, United States
Founder	Pierre Omidyar
Headquarters	San Jose, California , United States
Area served	Worldwide (190 countries)
Products	Online marketplaces, auction formats, immediate purchase options
Website	www.ebay.com

eBay Inc. (displayed as ebay) is a United States-based multinational firm specializing in e-commerce, with its main office located in San Jose, California. Established by Pierre Omidyar in September 1995, eBay manages online marketplaces across 190 countries, facilitating buying and selling through auction formats or immediate purchase options. The company earns income primarily by taking a commission on each transaction and processed $73 billion worth of sales in 2023, nearly half (48%) of which took place within the U.S. Its commission rate stood at 13.81% that year. eBay is listed on the Nasdaq Global Select Market and is included in the S&P 500 index.

Catering to private individuals, enterprises, and governmental bodies, eBay accommodates a diverse array of lawful product categories. It employs a sealed-bid proxy auction model and features a feedback system where parties rate one another after transactions conclude. Users can access the platform through both web browsers and mobile applications, while developers benefit from an API that enables application integration. Moreover, eBay runs affiliate marketing initiatives allowing sellers to earn referral commissions.

1990s

Originally launched as AuctionWeb in California on September 3, 1995, eBay was created by French-Iranian-American programmer Pierre Omidyar initially as a side project to supplement his income. One of the earliest transactions involved selling a defective laser pointer for $14.83, demonstrating early demand for specialized collectibles.

By February 1996, increased website traffic compelled Omidyar to upgrade to a business internet service plan, raising monthly expenses from $30 to $250. Financial backing from his family helped maintain operations during this period. The platform generated $1,000 in revenue during its first month and $2,500 the following month. Chris Agarpao became the company’s inaugural employee, responsible for payment handling.

Jeffrey Skoll was appointed as eBay’s first president in early 1996. By November of that year, eBay broadened its auction inventory to include travel-related products through a collaboration with Electronic Travel Auctions; by then, over 200,000 auctions had been hosted.

In September 1997, AuctionWeb was rebranded as eBay, a name derived from Omidyar’s consulting enterprise Echo Bay Technology Group; the preferred domain echobay.com was unavailable due to prior registration by a mining firm. That same year, Benchmark invested $6.7 million in venture capital funding.

A widely circulated but untrue narrative suggested eBay was established to assist Omidyar’s fiancée in trading Pez dispensers—a fabricated story created for marketing purposes. The platform became especially popular among collectors of items like Beanie Babies, which accounted for approximately 10% of listings in 1997 owing to their limited availability and collector interest.

In March 1998, Meg Whitman took on the roles of president and CEO when eBay employed 30 people, counted half a million users, and generated $4.7 million in revenue within the U.S. In July 1998, eBay expanded by acquiring Jump, which operated Up4Sale—an ad-supported auction website featuring 27,000 auctions and boasting 50,000 members.

During the height of the dot-com bubble, eBay launched its initial public offering in September 1998 under CFO Gary F. Bengier, debuting on the NASDAQ stock exchange with the ticker symbol EBAY. Shares were initially priced at $18 but closed at $53 on opening day, instantly elevating Omidyar and Skoll to billionaire status. The company's SEC filing that year noted its significant reliance on the Beanie Babies market as a potential risk factor.

2000s

In June 2000, eBay purchased Half.com for $312 million in stock. That same year, it teamed up with Escrow.com to provide escrow services, initially targeting motor vehicle transactions before broadening to other categories. By the end of the year, eBay had amassed 22.5 million registered users and hosted 79.4 million auctions during the quarter.

In January 2001, eBay secured a controlling interest in Internet Auction Co. Ltd., South Korea's leading auction platform. The following year, in February 2002, it acquired the French auction site iBazar for approximately $112 million in stock. eBay entered the Chinese market in 2002 but withdrew in 2007 due to stiff competition from Taobao. It also exited Japan that same year, redirecting efforts toward Taiwan by acquiring NeoCom Technology for $9.5 million; operations there were transferred to a joint venture partner in 2006.

On October 3, 2002, eBay finalized its acquisition of PayPal for $1.4 billion, subsequently phasing out its Billpoint payment system by January 2003. This move significantly bolstered eBay’s payment processing capabilities and competitive standing.

In May 2003, a jury found eBay liable for willful patent infringement concerning its "Buy It Now" feature and awarded $35 million in damages. The case escalated to the Supreme Court, which ruled in 2006 that injunctions are not automatic in patent disputes, influencing eBay’s strategy regarding business method patents.

eBay pursued aggressive growth in China by acquiring EachNet in 2003, initially capturing an 85% market share before Alibaba’s Taobao reduced it to 7.7% over four years.

In August 2004, eBay acquired a 25% interest in classified advertising platform Craigslist for $32 million. Later that December, it bought Rent.com for $415 million.

March 2005 saw the launch of the international classified site Kijiji, which expanded into the U.S. market by July 2007. In May 2005, eBay acquired UK-based classifieds site Gumtree. October of that year marked eBay’s acquisition of Skype Technologies for $2.6 billion as part of its diversification into internet communications.

By late 2005, eBay had acquired ProStores (formerly Kurant StoreSense), an e-commerce hosting service rebranded as ProStores by eBay. This platform provided merchants with website creation tools, inventory management, and compatibility with software like QuickBooks and Dreamweaver. Support for ProStores ended in February 2015.

In April 2006, eBay introduced eBay Express, a fixed-price shopping site featuring over 10 million items without bidding; however, it was discontinued by October 2008.

eBay expanded into event ticketing by acquiring ticket resale platform StubHub for $310 million in January 2007.

Leadership changed in January 2008 when CEO Meg Whitman resigned to pursue a political career; she was succeeded by John Donahoe, while Whitman stayed on as an advisory board member throughout that year.

In April 2008, eBay initiated legal action against Craigslist over concerns about dilution of its economic stake and loss of board seats; Craigslist responded with a countersuit alleging misuse of confidential information. A Delaware court partially ruled in favor of eBay in September 2010, restoring its ownership to 28.4%.

May 2008 marked the inauguration of a LEED Gold-certified facility at eBay’s North Campus headquarters in San Jose, equipped with extensive solar power systems that reduced both energy expenses and carbon emissions.

In April 2009, eBay acquired a controlling interest in South Korean online retailer G-Market for $413 million to enhance its foothold in Asian markets. The following month, it launched the Selling Manager Applications program to allow third-party developers to integrate tools within the eBay platform.

By November 2009, after difficulties incorporating Skype into its marketplace framework, eBay sold a 70% stake in Skype to investors including Silver Lake Partners and Marc Andreessen for a valuation of $2.75 billion while retaining minority ownership. Microsoft later completed full acquisition of Skype for $8.5 billion in May 2011.

2010s

In June 2011, eBay completed the acquisition of GSI Commerce for $2.4 billion, later rebranding it as eBay Enterprise in 2013. RentPath acquired Rent.com from eBay in May 2012 for around $415 million. That September, eBay unveiled a refreshed, slimmer logo design.

October 2012 saw eBay collaborate with Pitney Bowes to enhance international shipping processes and team up with FedEx to provide sellers with discounted shipping options. In November 2012, the company confronted antitrust allegations related to non-solicitation agreements with other technology companies; this matter was resolved in May 2014, requiring eBay to discontinue these agreements.

On September 30, 2014, eBay announced plans to spin off PayPal into an independent publicly traded entity, a decision influenced by activist investor Carl Icahn. This separation finalized in July 2015, coinciding with CEO John Donahoe's exit.

In January 2015, eBay expanded by acquiring Mexican classifieds platform Vivanuncios. By June of that year, it divested its interests in Craigslist, concluding associated legal disputes. August 2015 marked the reduction of its stake in Indian marketplace Snapdeal. The following month, Propay and Skrill payment options were removed due to minimal usage.

July 2017 brought a strategic alliance with Flipkart, where eBay purchased a 5.44% stake valued at $211 million alongside a $514 million cash infusion. Flipkart integrated its seller base with eBay’s global platform. However, by May 2018, eBay sold its Flipkart shares to Walmart and reentered the Indian market independently. Additionally, eBay discontinued Half.com in August 2017 and launched AI-driven image search technology later that year.

On January 31, 2018, eBay transitioned from PayPal to Dutch payment processor Adyen aiming to lower expenses and offer merchants greater control. In May 2018, it acquired Japanese e-commerce site Qoo10 for $573 million. By July, Apple Pay support was introduced alongside a partnership with Square to provide seller financing loans up to $100,000. Following security concerns after the YouTube shooting incident, eBay announced plans to enhance perimeter security at its San Jose headquarters.

March 2019 marked the initiation of dividend payments in response to investor demands for improved shareholder returns. On July 31, eBay acquired a 5.59% share in Indian marketplace Paytm Mall. CEO Devin Wenig resigned in September under pressure from activist shareholder Elliott Management; CFO Scott Schenkel stepped in as interim CEO.

In November 2019, eBay agreed to sell StubHub to Viagogo for $4.05 billion; the deal closed in February 2020.

2020s

Jamie Iannone was appointed CEO in April 2020, signaling a shift in leadership strategy. By June, veteran board members Fred D. Anderson and Thomas J. Tierney resigned after nearly twenty years of service. In July, eBay sold its classifieds segment to Adevinta for $2.5 billion in cash and stock; following Adevinta's acquisition by private equity firms in 2023, eBay divested its remaining stake. To comply with regulatory mandates, Gumtree was further divested.

Founder Pierre Omidyar stepped down from the board in September 2020, ending his formal governance role at the company. In November 2021, eBay exited South Korea by selling operations to Emart for $3 billion as part of global streamlining efforts.

Throughout 2022, eBay pursued multiple acquisitions aimed at broadening its product and service portfolio: it acquired a stake in Funko becoming the preferred secondary marketplace; purchased NFT platform KnownOrigin; acquired myFitment group to improve automotive parts listings; and bought TCGPlayer—a collectible card game marketplace—for up to $295 million—each acquisition enhancing market presence and diversifying revenue sources.

In July 2023, eBay acquired Certilogo, an AI-driven digital identification and authentication service for apparel and fashion items, strengthening its product authenticity capabilities.

Amid workforce adjustments, eBay announced plans in January 2024 to reduce its full-time staff by roughly 9% after hiring had outpaced growth projections.

Financial history

Year	Revenue in mil. USD$	Net income in mil. USD$	Total assets in mil. USD$	Price per share in USD$	Employees
2005	4,552	1,082	11,789	15.65	11,600
2006	5,970	1,126	13,494	13.00	13,200
2007	7,672	348	15,366	13.25	15,500
2008	8,541	1,779	15,592	9.58	16,200
2009	8,727	2,389	18,408	7.29	16,400
2010	9,156	1,801	22,004	9.68	17,700
2011	11,652	3,229	27,320	12.28	27,770
2012	14,072	2,609	37,074	16.61	31,500
2013	16,047	2,856	41,488	21.03	33,500
2014	8,790	46	45,132	21.01	34,600
2015	8,592	1,725	17,755	25.00	11,600
2016	8,979	7,266	23,847	27.08	12,600
2017	9,567	(1,016)	25,981	35.06	14,100
2018	10,746	2,530	22,819	34.31	14,000
2019	10,800	1,792	18,174	35.50	13,300
2020	8,894	5,667	19,310	36.45	12,700
2021	10,420	13,608	26,626	34.43	10,800
2022	9,790	(1,270)	20,850	34.34	11,600

This financial overview illustrates the company’s revenue expansion alongside fluctuations in net earnings from 2005 through 2022. Exceptional profitability was recorded in 2016 and 2021 with net incomes of approximately $7.3 billion and $13.6 billion respectively. Workforce numbers reached their highest level in 2014 at 34,600 employees before settling between 11,000 and 14,000 in more recent years. Despite some volatility linked to profit variations, share prices generally trended upward throughout the timeframe. These figures reflect the company’s shifting business strategies and the influence of market factors on its global financial outcomes over nearly twenty years.

Philanthropy and charity auctions

Through MissionFish, eBay offers sellers the option to allocate a portion of their auction proceeds to selected charitable organizations while benefiting from reduced fees for such auctions.

A prominent annual event is the "Power Lunch" hosted with investor Warren Buffett at New York City's Smith & Wollensky restaurant. Conducted 21 times between 2000 and 2022 (excluding pandemic years 2020 and 2021), these auctions have generated $53.2 million for the Glide Foundation with winning bids ranging from $2 million up to $19 million in the latest 2022 auction. In May 2024 a comparable auction featuring lunch with Marc Benioff, CEO of Salesforce, raised $200,000 plus an additional $1.5 million donated to the Glide Foundation.

Another notable auction involved a letter sent by Senator Harry Reid and 40 Democratic senators to Clear Channel CEO Mark P. Mays criticizing talk show host Rush Limbaugh. This letter sold for $2.1 million with proceeds benefiting the Marine Corps-Law Enforcement Foundation; Limbaugh matched the final bid amount.

In 2022 alone eBay’s platform facilitated charitable contributions exceeding $163 million demonstrating its substantial role in philanthropy through its business framework.

Stalking scandal

In June 2020 five eBay employees were dismissed and charged with cyberstalking after harassing Ina and David Steiner—editors of EcommerceBytes—a newsletter critical of the company. The harassment campaign included sending disturbing anonymous packages such as a preserved fetal pig specimen, a bloody pig mask accessory, a funeral wreath and pornography as well as vandalism at the couple’s residence in Natick Massachusetts. Those involved pled guilty with most receiving custodial sentences.

At that time CEO Devin Wenig—often criticized by the newsletter—was reportedly unaware of these actions and faced no charges; he departed in September 2019 receiving a severance package valued at $57 million. Steve Wymer then chief communications officer and connected to local political figures was terminated "for cause" due to alleged involvement but was not charged; he subsequently became CEO of the Boys & Girls Clubs of Silicon Valley. This incident negatively affected eBay’s corporate image and underscored weaknesses in internal controls across its worldwide operations.

Fraud

Seller-related fraud encompasses the sale of counterfeit items, shill bidding (where sellers artificially boost prices through undisclosed bids), failure to dispatch paid goods, inaccurate product descriptions, knowingly sending defective merchandise, refusing warranty exchanges, trafficking stolen goods, misrepresenting shipping fees, and the use of fake accounts to place high bids without payment. eBay has been criticized for its inadequate measures against shill bidding. Buyers often utilize tactics such as auction sniping to counteract these fraudulent practices.

Fraudulent activities by buyers include submitting false claims of damage, engaging in friendly fraud by alleging non-receipt of items, returning incorrect or tampered products, presenting forged payment proofs, manipulating bids to secure low-priced second chance offers, damaging non-refundable goods to obtain refunds, and conducting return scams involving redirected packages filled with worthless items sent to incorrect addresses.

In 2004, Tiffany & Co. initiated legal action against eBay, asserting that over 70% of Tiffany silver jewelry sold on the platform was counterfeit and accusing eBay of benefiting from trademark violations. However, rulings by a Federal District Court in 2008 and a Second Circuit Court in 2010 determined that eBay is not legally liable for policing counterfeit sales on its site.

In June 2008, a Paris court imposed a €40 million fine on eBay due to unauthorized sellers offering counterfeit LVMH products and issued a permanent ban on LVMH perfume auctions; following this, eBay prohibited such listings. Additionally, a separate French court mandated eBay to pay Hermès €20,000 for counterfeit handbag sales occurring in 2006 and required the company to display the court’s decision prominently on its French homepage for three months.

Items stolen from the British Museum

In 2013, a collection of jewelry pieces crafted from gold, semi-precious stones, and glass—dating from approximately 1,500 BC through the 19th century AD—were stolen from the British Museum. By 2016, some of these artifacts surfaced on eBay’s platform, including an ancient Roman onyx item valued between £25,000 and £50,000 (US$32,000–63,000), which was listed with a starting bid of only £40 (US$50). The listing attracted no bids. Authorities are investigating the matter while eBay cooperates by removing listings suspected of involving stolen property.

Dr. Seuss books

In 2021, eBay acted in accordance with the estate of Dr. Seuss by prohibiting the sale of six books due to their racially insensitive illustrations. This move provoked criticism from right-wing factions and paradoxically led to increased demand for these now-banned titles.

Sale of illegal items

In September 2023, the United States Department of Justice filed a lawsuit against eBay alleging violations of the Clean Air Act and other environmental regulations. The complaint centers on eBay’s allowance of unlawful sales including devices that circumvent vehicle emission controls, pesticides restricted by law, and paint strippers containing methylene chloride.

Port scanning

In 2020, developer Dan Nemec disclosed that eBay employed LexisNexis’ ThreatMetrix technology to conduct port scanning on users’ computers. This process involved concealed client-side JavaScript initiating WebSocket connections to local ports typically used by remote access software such as VNC, raising significant privacy concerns among users.

See also

• eBay v. Bidder's Edge
• List of acquisitions by eBay
• Shopping neutral
• Unusual eBay listings

External links

• eBay on YouTube