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| Company name | eBay Inc |
|---|---|
| Company logo | |
| Company type | Public ()S&P; 500 Component |
| Foundation | September 3, 1995 |
| Location city | San Jose, California |
| Founder | Pierre Omidyar and Michael Dean Johnson |
| Location country | U.S. |
| Area served | Worldwide |
| Key people | Pierre Omidyar (Chairman) John Donahoe (CEO) |
| Num employees | 15,500 (Q1 2008) |
| Market cap | $ 25 billion (2008) |
| Industry | Auctions |
| Revenue | (2009) |
| Assets | (2009) |
eBay Inc. is an American Internet company that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide. Founded in 1995, eBay is one of the notable success stories of the dot-com bubble; it is now a multi-billion dollar business with operations localized in over thirty countries. eBay expanded from its original "set-time" auction format to include "Buy It Now" standard shopping; shopping by UPC, ISBN, or other kind of SKU (via Half.com); online classified advertisements (via Kijiji or eBay Classifieds); online event ticket trading (via StubHub); online money transfers (via PayPal) and other services.
The online auction website was founded as AuctionWeb in San Jose, California, on September 3, 1995, by French-born Iranian computer programmer Pierre Omidyar as part of a larger personal site that included, among other things, Omidyar's own tongue-in-cheek tribute to the Ebola virus. One of the first items sold on eBay was a broken laser pointer for $14.83. Astonished, Omidyar contacted the winning bidder to ask if he understood that the laser pointer was broken. In his responding email, the buyer explained: "I'm a collector of broken laser pointers." The frequently repeated story that eBay was founded to help Omidyar's fiancée 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, The Perfect Store, The company officially changed the name of its service from AuctionWeb 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. (Echobay.com is now owned by Echobay Partners, Ltd., a private equity firm based in Nevis.)
In 1997, the company received $6.7 million in funding from the venture capital firm Benchmark Capital.
Meg Whitman was hired as eBay President and CEO in March 1998. At the time, the company had 30 employees half a million users and revenues of $4.7 million in the United States. eBay went public on September 21, 1998, and both Omidyar and Skoll became instant billionaires. eBay's target share price of $18 was all but ignored as the price went to $53.50 on the first day of trading.
As the company expanded product categories beyond collectibles into almost any saleable item, business grew quickly. Whitman remained on the Board of Directors and continued to advise Donahoe through 2008. In late 2009, eBay completed the sale of Skype for $2.75 billion, but will still own 30% equity in the company.
In July 2010, eBay was sued for $3.8 billion by XPRT Ventures which accused eBay of stealing information shared in confidence by the inventors on XPRT's own patents, and incorporated it into features in its own payment systems, such as PayPal Pay Later and PayPal Buyer Credit.
December 20, 2010, EBay Inc. says it will acquire a German online shopping club - brand4friends for 150 million Euro ($197 million) to strengthen the company fashion business in Europe. It is subject to regulatory approval and expected to close it in the Q1 2011.
Controversy has arisen over certain items put up for bid. For instance, 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 or to garner free publicity. In general, the company removes auctions that violate its terms of service agreement.
Further, and as noted below, it was a requirement to offer Paypal on all listings in Australia and the UK. In response to concerns expressed by the Australian Competition and Consumer Commission, however, eBay has since removed the policy on the ebay.com.au website requiring sellers to offer PayPal as a payment option.
Best of eBay is a specialty site for finding the most-unusual items on the eBay site. Users can vote on and nominate listings that they find.
In a reversal of roles, on January 24, 2010 Auctionbytes.com held an open survey in which sellers could effectively rate eBay itself, as well as competing auction and marketplace sites. In the survey, users were asked to rank 15 sites based on five criteria:
After the results were published, eBay had finished 13th overall, edged out by established sites such as Amazon and Craigslist, as well as lesser-known upstarts like Atomic Mall and Ruby Lane. In individual category rankings, eBay was rated the worst of all the 15 sites on Customer Service and Communication, and average on Ease of Use. A number of respondents said they would have given eBay a rating of ten 3 to 5 years ago. eBay was rated twelfth out of fifteen in the Recommended Selling Venue category.
Under current U.S. law, a state cannot require sellers located outside the state to collect a sales tax, making deals more attractive to buyers. Although some state laws require purchasers to pay sales tax to their own states on out-of-state purchases, it is not a common practice. However, most sellers that operate as a full time business do follow state tax regulations on their eBay transactions. However for the tax called Value added tax (VAT), eBay requires sellers to include the VAT fees in their listing price and not as an add-on and thus eBay profits by collecting fees based on what governments tax for VAT.
The company's current business strategy includes increasing international trade. eBay has already expanded to over two dozen countries including China and India. The only places where expansion failed were Taiwan and Japan, where Yahoo! had a head start, and New Zealand where TradeMe, owned by the Fairfax media group is the dominant online auction website.
A more recent strategy involves the company increasingly leveraging the relationship between the eBay auction site and PayPal: The impact of driving buyers and sellers to use PayPal means not only does eBay turn buyers into clients (as a pure auction venue its clients used to be predominantly sellers) but for each new PayPal registration it achieves via the eBay auction site it also earns offsite revenue when the resulting PayPal account is used in non-eBay transactions. In its Q1 2008 results, total payment volume via PayPal increased 17 percent, but off the eBay auction site it was up 61 percent.
For most listing categories, eBay sellers are permitted to offer a variety of payment systems such as Paypal, Paymate, ProPay, and Moneybookers.
eBay runs an affiliate program under the name eBay Partner Network. eBay affiliate marketers were originally paid a percentage of the eBay seller's transaction fees, with commissions ranging from 50% to 75% of the fees paid for an item purchased. In October 2009, eBay changed to an affiliate payout system that it calls Quality Click Pricing, in which affiliates are paid an amount determined by an undisclosed algorithm. The total earnings amount is then divided by the number of clicks the affiliate sent to eBay and is reported as Earnings Per Click, or EPC.
In February 2004, a scrapped F/A-18 Hornet fighter jet was listed on eBay by Mike Landa, of Landa and Associates, with a starting bid of $1,000,000. He was the legal owner of the plane after purchasing it from a scrap yard and also offered to have the plane restored for flying condition for a Buy It Now price of $9,000,000. Landa also told potential buyers that maintenance of the plane would cost roughly $40,000 a month for just 2 to 3 hours of flying time. The FBI told Landa that he could only sell the plane to an American citizen residing in the United States, and that the plane must not leave U.S. airspace. The auction ended without a sale.
In January 2003, Thatch Cay, the last privately held and undeveloped U.S. Virgin Island, was listed for auction by Idealight International. The minimum bid was $3,000,000.00 and closed 16 January 2003.
In December 2005, a brussels sprout cooked on Christmas Day was listed by "crazypavingpreacher" (Andrew Henderson of Darlington, England). It sold for £99.50 on 4 January 2006. The sprout had been frozen and was sent by first class post in insulated packaging to the buyer, "5077phil". The listing was reported in the Daily Star, making the front page (and was followed by a series of "copycat" listings of various vegetables). The proceeds of the sale were donated to Tearfund, a major Christian relief and development agency working in the third world. This sprout was the first cooked brussels sprout to be sold on eBay.
In January 2006, a British man named Leigh Knight sold an unwanted brussels sprout left over from his Christmas dinner for £1550 in aid of cancer research.
In May 2006, a Chinese businessman named Zhang Cheng bought a former Czech Air Force MIG-21 fighter jet from a seller in the United States for $24,730. The seller, "inkgirle", refused to ship it. It is not known whether he was refunded.
In June 2005, the wife of Tim Shaw, a British radio DJ on Kerrang! 105.2, sold Tim's Lotus Esprit sports car with a Buy It Now price of 50 pence after she heard him flirting with model Jodie Marsh on air. The car was sold within 5 minutes, and it was requested that the buyer pick it up the same day.
In May 2005, a Volkswagen Golf that had previously been registered to Joseph Ratzinger (then a cardinal, who had since been elected pope and chose the regnal name Benedict XVI on April 19, 2005) was sold on eBay's German site for €188,938.88 ($277,171.12 USD). The winning bid was made by the GoldenPalace.com online casino, known for their outrageous eBay purchases.
A seaworthy 16,000-ton aircraft carrier, formerly the British HMS Vengeance, was listed early in 2004. The auction was removed when eBay determined that the vessel qualified as , even though all weapons systems had been removed.
Water that was said to have been left in a cup Elvis Presley once drank from was sold for $455. The few tablespoons came from a plastic cup Presley sipped at a concert in North Carolina in 1977.
Coventry University student Bill Bennett got £1.20 for a single cornflake.
A man from Brisbane, Australia, attempted to sell New Zealand at a starting price of $0.01AUD. The price had risen to $3,000 before eBay closed the auction.
An Australian newspaper reported in December 2004 that a single piece of the Kellogg's breakfast cereal Nutri-Grain sold on eBay for AUD$1,035 because it happened to bear a slight resemblance to the character E.T. from the Steven Spielberg movie. Apparently the seller went on to make even more money in relation to the sale for his appearance on a nationally televised current affairs program.
One of the tunnel boring machines involved in the construction of the Channel Tunnel was auctioned on eBay in 2004.
A group of four men from Australia auctioned themselves to spend the weekend with the promise of "beers, snacks, good conversation and a hell of a lot of laughs" for AU$1,300
Disney sold a retired Monorail Red (Mark IV Monorail) for $20,000
The German Language Association sold the German language to call attention to the growing influence of English in modern Germany.
In late November 2005, the original Hollywood Sign was sold on eBay for $450,400.
In February 2007, after Britney Spears shaved all of her hair off in a Los Angeles salon, it was listed on eBay for 1 million USD before it was taken down.
In September 2004, the Indiana Firebirds arena football team was auctioned off, first in a regular auction that failed to reach the reserve price, and again as a "Buy it Now" item for $3.9 million.
Bridgeville, California (pop. 25) was the first town to be sold on eBay in 2002, and has been up for sale 3 times since.
In April 2005, American entrepreneur Matt Rouse sold the right to choose a new middle name for him. After receiving an $8,000 "Buy It Now" bid, the Utah courts refused to allow the name change. He currently still has his original middle name "Jean".
In 2004, a partially eaten, 10-year-old grilled cheese sandwich said to bear the image of the Virgin Mary sold on eBay for $28,000.
In January 2008, four golf balls were auctioned on eBay after being surgically removed from the carpet python which had inadvertently swallowed them whilst raiding eggs in a chicken enclosure. The story attracted considerable international attention and the balls eventually sold for more that AUD$1,400. The python recovered and was released.
In May 2008, Paul Osborn of the UK listed his wife Sharon for sale on eBay, alleging that she had an affair with a coworker.
In June 2008, Ian Usher put up his "entire life" on auction. The auction included his house in Perth, belongings, introduction to his friends, and a trial at his job. When bidding closed, his "life" sold for $384,000.
In August 2008, Dr Richard Harrington, Vice President of the UK Royal Entomological Society, announced that a fossilized aphid he bought for £20 from a seller in Lithuania, was a previously unknown species. It has been named Mindarus harringtoni after Dr Harrington. He had wanted to name it Mindarus ebayi, but this name was disallowed as being too flippant. The 45-million-year-old aphid, preserved in a piece of Baltic amber, is now housed in the Natural History Museum in London.
In October 2008, amidst the 2008–2009 Icelandic financial crisis one seller had put up Iceland for sale. Auction started with 99 pence but had reached 10 million pounds (US $17.28 million). However, singer Björk was "not included" in the sale. The notice read Located in the mid-Atlantic ridge in the North Atlantic Ocean, Iceland will provide the winning bidder with — a habitable environment, Icelandic Horses and admittedly a somewhat sketchy financial situation. Bidders' questions included: "Do you offer volcano/earthquake insurance?"
In November 2008, a Swedish man put a digitally hand-drawn picture of a 7-legged spider onto eBay. The picture stemmed from an article on the site 27bslash6.com wherein David Thorne claims to have attempted to pay a chiropractor's bill with a picture of a 7-legged spider, which he valued at $233.95. On eBay, the bidding price started at $233.95, with bidding ended at a sale price of US$10,000. Both the e-mail exchange and the picture have become internet hits.
In July 2009 Dornoch Capital Advisors placed England's Coca Cola League One Side Tranmere Rovers F.C. on eBay without permission for them to do so from owner and chairman Peter Johnson. This led to Johnson issuing a statement on the team's website saying that the team was not for sale and that he had contacted eBay to have the listing removed.
In August 2009, a mother of six from South Arkansas auctioned off the legal rights to name her unborn child.
In December 2009, a woman auctioned the copyright for a never before seen four-minute home video of Marilyn Monroe smoking a joint.
In September 2010, a 23 year old man named M00T, Stockton-on-Tees, was trying to raise money for Cancer Research by attempting to sell a Ghost. The auction caught the attention of a local news paper. However, after day 6 of the auction, eBay removed the item stating it was against their policy to sell "useless items or items whose existence cannot be justified or that nobody would want anyways".
Some high-profile charity auctions have been advertised on the eBay home page, and have raised large amounts of money in a short time. For example, a furniture manufacturer raised over $35,000 for Ronald McDonald House by auctioning off beds that had been signed by celebrities.
To date the highest successful bid on a single item for charity was for the annual "Power Lunch" with investor Warren Buffett at the famous Smith & Wollensky Steakhouse in New York. The winning bid was $2.63 million with all of the proceeds going to the Glide Foundation. At the time of writing, the winning bidder is still not publicly known, but they will be able to bring up to seven friends to the lunch.
The previous highest successful bid on a single item for charity was for a letter sent to Mark P. Mays, CEO of Clear Channel (parent company of Premiere Radio Networks the production company that produces The Rush Limbaugh Show and Glenn Beck Program) by United States Senator Harry Reid and forty other Democratic senators, complaining about comments made by conservative talk show host Rush Limbaugh. The winning bid was $2,100,100, with 100 percent of the proceeds going to the Marine Corps-Law Enforcement Foundation, benefiting the education of children of men and women who have died serving in the armed forces. The winning bid was matched by Limbaugh in his largest charity donation to date.
In 2007, eBay Canada partnered with Montreal-based digital branding agency CloudRaker to develop a campaign to raise money for Sainte-Justine children's hospital in Montreal. They aligned themselves with internet phenomenon Têtes à Claques to create an eBay auction based on popular T-A-C character Uncle Tom, an infomercial host who pitches absurd products. eBay and CloudRaker reproduced Uncle Tom’s imaginary products, The Body Toner Fly Swatter, The Willi Waller Potato Peeler, and the LCD Shovel and sold them online. In 6 weeks, they raised $15,000 for Hopital St-Justine with one fly swatter, one potato peeler, and one shovel, a world record. The Body Toner Fly Swatter sold for $8,600, the Willi Waller Potato Peeler sold for $3,550, and the LCD Shovel sold for $2,146.21.
The classifieds service Kijiji was launched by eBay in March 2005. In April 2008, eBay sued Craigslist to "safeguard its four-year financial investment", claiming that in January 2008, Craigslist took actions that "unfairly diluted eBay's economic interest by more than 10%." Craigslist countersued in May 2008 "to remedy the substantial and ongoing harm to fair competition" that Craigslist claims is constituted by eBay's actions as a Craigslist shareholder. In September 2010, Delaware Judge William Chandler ruled that the actions of Craigslist were unlawful, and that the actions taken upon by Craigslist founders Jim Buckmaster and Craig Newmark had "breached their fiduciary duty of loyalty", and restored eBay's stake in the company to 28.4% from a diluted level of 24.85%. However, the judge dismissed eBay's objection to a staggered board provision citing that Craigslist has the right to protect its own trade secrets. eBay spokesman Michael Jacobson stated "We are very pleased that the court gave eBay what it sought from the lawsuit."
Category:Companies established in 1995 Category:Internet properties established in 1995 Category:Companies based in San Jose, California Category:Companies listed on NASDAQ Category:Internet companies of the United States Category:National Medal of Technology recipients Category:Online auction websites Category:Online retail companies of the United States Category:Virtual communities Category:Global internet community Category:Commerce websites
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