When Was eBay Founded?
When Was eBay Founded? An Origin Story Spanning 25+ Years of Online Auctions
eBay has become synonymous with online auctions and peer-to-peer ecommerce. As one of the earliest standout success stories from the dawn of the internet era, eBay inspired a whole new way for people to interact, share and conduct commerce globally.
But when and how did this multibillion-dollar company first make its auspicious debut? Let‘s rewind over 25 years to uncover the origins of eBay.
A Computer Programmer Visualizes ‘Person-to-Person‘ Trading
Long before ever dreaming of online auctions, eBay founder Pierre Omidyar was fascinated by the potential efficiency of direct connections. As a 28-year-old computer programmer and self-taught coder living in San Jose, California in 1995, he yearned to create an online platform enabling regular people to trade goods and services directly with one another.
At the time, most commerce on the 90s internet still funneled through big companies’ centralized warehouses. But Omidyar visualized a people-powered “perfect market” allowing individuals to set their own prices based on supply and demand. He believed ubiquitous internet access could bring strangers together in a virtual bazaar of unfettered exchange.
Omidyar had honed his coding chops in college at Tufts University where he served as developer for campus computer labs before graduating in 1988. He went on to work at Apple spinoff General Magic on early PDAs and e-commerce tools during the PalmPilot era. This experience stoked his interest in direct digital trade and previewed the smartphone-fueled peer economy models that companies like Uber would later build upon.
Launching AuctionWeb – "A Little Experiment"
In September 1995, Omidyar registered the web domain AuctionWeb.com and began tinkering with website code on his home computer over Labor Day weekend. He later downplayed it as “a little experiment”, unsure if anyone would even access this rudimentary personal project built atop used Claris Homepage software.
Omidyar adapted code he had written for an earlier webpage showcasing information from public databases to fashion a simple auction tool enabling anyone to list items for sale. Sellers could open auctions by starting bids at one cent with automatic bid increments capped at $250. Listings would close automatically after seven days using a basic programming script Omidyar cooked up.
As user-friendly as a website could be in 1995, AuctionWeb still looked closer to a computer science experiment than a sleek ecommerce storefront. No product photos appeared alongside auction descriptions typed out in basic text.
The First Item Sold: Broken Laser Pointer for $14.83
To test if his new platform worked, Omidyar listed a broken laser pointer he had lying around his house on AuctionWeb. As an electronics tinkerer and self-described “geek”, he wondered if anyone might want it for spare parts or to fix as a challenge.
Sure enough, on September 21, 1995, a collector purchased the faulty pointer in AuctionWeb’s very first transaction for a final price of $14.83. Omidyar was amazed someone actually used this website he created and more so that they paid real money for his random junk drawer item. But this initial sale exemplified the site’s appeal – it enabled seekers of hidden value and specialized experts to uncover “gold nuggets” amongst the things others discarded.
Rallying Friends to Spread the Word About This "Magic Thing"
Elated to have earned his first online dollar, Omidyar eagerly told friends and former Tufts classmates about the auction website he had coded from scratch. A former editor of the Tufts campus newspaper, he understood firsthand the importance of compelling storytelling and grassroots promotion.
Omidyar touted the “magic” of this website where people could list items for auction directly to one another with no expensive middlemen involved. His enthused early adoptors in turn told their own friends, word spread rapidly and AuctionWeb listings multiplied exponentially across diverse categories.
One pivotal ally aiding awareness in these early viral days was Jeffrey Skoll, Omidyar’s former colleague at General Magic who he hired to help with strategy and financing. Chris Agarpao, an Apple veteran focused on building community, was another key advisor brought aboard in 1996 to nurture AuctionWeb’s budding marketplace culture.
By December 1996’s end, still operating as just a trio of founders, AuctionWeb hosted 80,000+ auctions from nearly 41,000 registered users. Growth rates were accelerating by the month. Omidyar soon brought aboard more staff to handle customer support and site operations.
Originally pronounced “Ock-sion-web”, the fledgling forum abbreviated its name to the zippier sounding “eBay” in September 1997. Communicating both its online roots and the excitement of discovery, eBay was now ready to consolidate its position at the center of a commerce revolution underway.
1995-Present: Key eBay Milestones
Year Users Listings Gross Merchandise Volume
1995 41,000 ~100K ~$1M
1997 707,000 4.5M $95M
1999 3.8M ~99M $746M
2001 42M ~535M $14.9B
2003 77.9M ~1B $34.7B
2005 156M ~1.9B $52.5B
2007 221M ~2.3B $59.6B
2009 60.6M (active) ~2.2B $66.1B
2011 100.9M (active) ~2.1B $68.6B
2013 128M (active) ~1.2B $76.5B
2015 160M (active) ~1B $82.5B
2017 168M (active) 1.1B $88.4B
2019 179M (active) 1.3B $90.4B
2021 142M (active) ~1.7B $100B
Gross merchandise volume = total value of successfully closed transactions
(Image chart showing eBay‘s key growth metrics over time)
Rapid Growth Follows Move to California & Stock Market Debut
The newly dubbed eBay relocated from Omidyar’s condo to startup-friendly California in early 1998 seeking closer proximity to the dealmaking infrastructure fueling much 1990s internet innovation. The move west ushered in tremendous growth for eBay, with the site hosting over 1 million auctions by April 1998, more than doubling users again from the prior year.
Impressed by exploding traffic and transaction stats, Benchmark Capital and other angel investors helped eBay raise $44.7 million in crucial seed financing in May 1998. Nurturing early stage companies and staking them for the long haul would become Benchmark Hallmark. Other notable eBay investors circa 1998 included co-founder of Yahoo Jerry Yang, early PayPal backer and founder of CMTV Ventures Richard Schell, as well as News Corp scion Peter Chernin.
Eager to capitalize on dot-com era excitement, eBay offered shares to the public through an IPO just three years after its founding. Share prices doubled almost instantly when trading opened at $18 on September 24, 1998 (under the ticker EBAY on NASDAQ). Omidyar‘s “little experiment” now had an official billion-dollar valuation!
(Image placeholder for stock chart)
Spurred by influxes of IPO cash, eBay’s cultural footprint and regional expansion erupted as millions globally now flocked online to browse auction listings or hawk wares of their own. By 2002, eBay hosted listings in over 1,800 product categories while pouring resources into trust and safety programs ensuring site integrity. After buying PayPal for $1.5 billion that year, eBay also now offered built-in payment systems driving further growth by reducing post-auction payment friction.
In a tech landscape prone to burning bright before fading away, eBay had emerged as an enduring titan of online commerce, yet still offered plenty of upside as internet penetration increased internationally. When Google went public in 2004 in what was then the biggest internet IPO ever, eBay was one of the prime online incumbents cited to vouch for the web’s moneymaking potential.
Philanthropy Becomes A Focus Area For Omidyar
With eBay minting fortunes for numerous employees enriched by lucrative stock options, Omidyar and Skoll embarked on ambitious philanthropic ventures befitting their billionaire bonafides. Omidyar and his wife Pam designated $1 billion of their personal wealth to spread “entrepreneurship for good” by investing in market-based solutions for global empowerment.
The Omidyars soon founded nonprofit accelerator Humanity United to fund tech tools safeguarding human rights. eBay itself also formally committed in 2003 to activating its community around causes like disaster relief and matching employee donations to nonprofits.
Expanding Across Categories and Borders
Evolving from collectibles hub to sprawling emporium spanning countless niches took finesse, localization expertise and strategic acquisitions. Video game mass retailer GameFly and India e-tailer Bazee.com were two notable mid 2000s additions strengthening eBay’s gaming merchandise and Asia presence.
Key Category Breakdown:
Category 2021 Gross Merchandise Volume Historical Notes
Vehicles (autos, parts, accessories) $27 billion Core category since early days
Fashion (clothing, shoes, accessories) $8 billion+ 37% growth since 2020 driven by sneaker resale boom
Collectibles (trading cards, art, antiques) $5 billion+ Core category, TCGplayer acquired 2022
Home & Garden (furniture, décor, DIY) $4 billion+ Expanding market for used goods
Electronics $3 billion+ Bread-and-butter since AuctionWeb days
Toys $2 billion+ Beneficiary of nostalgia shopping trends
Sporting Goods $1 billion+ Streetwear and memorabilia are hot items
Global Expansion Timeline:
- 1999: Launched sites localized for Canada, UK, Germany, Austria
- 2002: Expanded to 15 countries including Australia, Ireland, Italy
- 2004: Launched in India via acquisition of local player Bazee
- 2021: 177 million buyers across 190 markets, but U.S. still accounts for biggest share of business
Top Seller Mix:
As of 2021, eBay’s merchant seller and small business community globally encompasses:
- 25% enterprises with >$10K in annual sales
- 38% larger merchants doing $10K-500K annually
- 37% small sellers with under $10K yearly
So 75% of seller pool remains individuals and very small merchants testaments to accessible platform.
Positioning For The Future in a Crowded Market
Presently led by CEO Jamie Iannone after former leaders like Devin Wenig stepped aside, eBay strives to keep pace in an increasingly crowded ecommerce market also featuring retail giants like Amazon and Walmart.com as well as social media platforms like Facebook and Instagram enabling commerce.
But eBay has stalwart believers in its future prospects if it continues playing to its strengths supporting small sellers with specialized inventory not readily replicated by mass retailers. Offering tools that simplify sales conversion and nurturing niche communities around collectibles also play to eBay’s wheelhouse.
And while 180 million global active buyers is no longer a jaw dropping stat like it was in the early 2000s, eBay still boasts more monthly visitors than fast-rising competitor Etsy nearly three decades after being founded. Optimizing search relevancy and trust features while marketing itself as a sustainable resale platform could prime eBay for many more years of growth according to analysts.
Initiatives such as the Up & Running accelerator program help fledgling entrepreneurs launch eBay storefronts in just a few clicks. Automated listing aids from the eBay AI catalog also make it simpler for casual sellers to showcase wares to targeted buyer audiences.
On the buyer side, discovery and engagement levers like Stories features thoughtfully display curated products alongside relevant visual narratives. eBay also elevates specialty vendors through dedicated Virtual Pop-Up Shops presenting coveted collections.
And to instill additional buyer confidence before clicking purchase, new verification services like eBay Authenticate provide professional inspection of high-value goods. The 2022 acquisition of TCGplayer, a marketplace for collectible gaming cards, also solidifies eBay as a top destination for coveted niche hobbyist inventory.
Omidyar laid the groundwork for eBay‘s community-led commerce model. But the billions of human interactions unfolding over thousands of product categories annually make machine learning aids like 3D image recognition search and demand forecasting algorithms equally vital to the next era of managed marketplace growth.
Conclusion: Still "The Original Companion For Your Curiosities"
What does the future hold for this titan of online auctions and peer-peer exchange as retail continues shifting online? After analyzing the platform’s genesis story and pivotal growth milestones, I believe eBay retains unique advantages that bode well for its next quarter century of journeying alongside treasure hunters, collectors and niche merchants alike.
Sentimentality remains high for the eBay name from its storied roots matching hobbyists who stumbled upon auctioning magic. The brand leaning into its legacy as the “Original Companion for Your Curiosities” hits the mark for enthusiasts embracing exploration and serendipitous discovery.
Smoothing out pain points around search, payments, shipping and handling can also reinforce consumer confidence. While slimming margins demand efficiency, the diversity of inventory and seller scale likely leaves room for targeted monetization that won’t undermine user experience.
Few ecommerce frontiers encapsulate the commercial internet’s initial promise quite like Pierre Omidyar sharing his broken laser pointer back in 1995. May eBay continue unlocking fortunes, sparking connection and circulating treasures for years to come.
