Over the course of a few years, eBay (NASDAQ: EBAY) has become a household name for consumer-to-consumer and business-to-consumer online sales. While buyers can create an account and bid for free, sellers must pay fees for listing and selling items, which can be classified as new, refurbished, used, common and rare. In lieu of bidding on items through an auction-style process, users can also purchase items through eBay's more traditional "Buy it Now" option, which allows buyers to receive items at a fixed price instead of bidding. eBay also creates revenue through its subsidiaries eBayClassifieds and Stubhub, which manage classified advertisements and online event ticket trading, respectively. In all, eBay's business model of e-commerce has influenced the collective idea surrounding an open market between both individuals and companies.
Beginning in 1995, eBay founder and current chairman Pierre Omidyar launched the site AuctionWeb by writing code on his personal computer during Labor Day weekend. According to company history, the first item sold was a broken laser pointer for $14.83. Once Omidyar's website began to generate a high number of traffic, his internet provider noted that it quickly required a business account, so Omidyar charged users to offset the high costs. Then he hired his first employee, Chris Apargao, who continues to work for the company to this day. By 1996, along with first hired president Jeffrey Skoll, AuctionWeb accomplishes a total of $7.2 million worth of items sold. By 1997, the millionth item sold: a Sesame Street-inspired jack-in-the-box toy. With future success on the horizon, Omidyar decided to change the name of AuctionWeb to eBay later that year, loosely naming the site after his consulting firm Echo Bay Technology Group.
eBay went public in September 1998 under the symbol EBAY. While the eBay market price was expected to launch at $18 per share, the shares rose to $53.50 the same day. eBay grew into a huge e-commerce presence, acquiring the now well-known online payment site Paypal in 2002 and the internet communications company Skype in 2005. With both companies, eBay sold Skype to investors whilst maintaining a 30% stake in the company, and in one of its biggest accomplishes yet, managed to create the now multinational website Paypal into a separate, publicly traded entity in 2014.
Although eBay has defined the e-commerce realm in less than 25 years, there is a price to pay for such a big influence. Currently, eBay competes with companies likes Alibaba (NYSE: BABA) and Amazon.com (NASDAQ: AMZN). In 2016 alone, Amazon had an increase in revenue of 31% while eBay revenue only increased by 6%. Meanwhile, Alibaba's growth across the world poses a threat to eBay, who does not have as many annual active buyers. Nevertheless, eBay's presence in the online market is no small one, continuing to provide alternative options to buy and sell items at desirable prices.