Brief
eBay Inc. is an American company that manages eBay.com, an online auction website where people and firms buy and sell goods and services worldwide. It also owns an online pay service PayPal, Skype, and some other Internet businesses.
The online auction website was founded in San Jose, California, on September 3, 1995 by computer programmer Pierre Omidyar as AuctionWeb. The very first item sold on future eBay was a broken laser pointer for $14.83. Astonished, Omidyar contacted the winning bidder and asked if he understood that the pointer was broken. In his responding email, the buyer explained: “I'm a collector of broken laser pointers.”
In May, 1997, Meg Whitman was appointed president and CEO of the company, and Pierre Omidyar became its chairman. The company officially changed the name to eBay in September, 1997. The IPO was held in 1998 letting Omidyar watch the price of his stock triple within a few days and makingde him an instant billionaire.
By 1999 eBay had 5.6 million registered users and listed over 3.1 million items for sale; by 2004 there were already 65 million users from 150 countries and 971 million items for sale. To the end of 2006 the company’s sales reached nearly $6 bn with a net income of 1.126 bn. eBay employs more than 13 200 people all around the world.
The eBay fee system is quite complex; there are fees to list a product and fees when the product sells, plus several optional fees, all based on various factors and scales. The company's current business strategy includes increasing revenue by increasing global trade. eBay has already expanded to almost two dozen countries including China and India. The only places where expansion failed were Taiwan and Japan, where Yahoo! had a head start.
In the end of 2006 eBay started a broad reorganization strategy as a result of its scorching growth rate began to slow. One of the moves of the new strategy is the world's largest online auction’s plans to launch its own version of a social networking service by the end of 2007. The "Neighborhoods" feature encourages users to post photos, product reviews, tips and responses - creating a far more visual and interactive experience than eBay's text-based discussion forums.
Later this year eBay will roll out “One Click Bid,” which should boost a buyer's chances of winning during the final 15 minutes. The company also wants to streamline its "My eBay" service and speed its cumbrous checkout process.
Culture
An eBay's sweet-natured philosophy was articulated by the company's founder Pierre Omidyar: “We believe that people are basically good,” he declared in 1998, when eBay first posted its code of five basic values on an obscure corner of its website. The four other ones are: “We believe everyone has something to contribute. We believe that an honest, open environment can bring out the best in people. We recognize and respect everyone as a unique individual. We encourage you to treat others the way that you want to be treated.”
The company’s culture is being built on the idea of importance of community and trust in the basic goodness of the people who do business on eBay.com. The website attracts dozens of millions of users to its “community”, and this ability to connect a great many people who act as product developers, salespeople and buyers lies at the heart of eBay’s success.
The result of such “believing in people’s basic goodness” culture is that millions of collectibles, appliances, computers, furniture, equipment, vehicles, and other miscellaneous items are listed, bought, and sold daily on eBay. Some items are rare and valuable, while many others are dusty gizmos that would have been discarded if not for the thousands of eager bidders worldwide. Good people do their business, and anything can be sold as long as it is not illegal or does not violate the eBay Prohibited and Restricted Items policy.
Leadership
As founder of eBay Pierre Omidyar changed the face of Internet commerce in 1995 when he launched Auction Web to experiment how equal access to information and opportunities would affect the efficiency of a marketplace. He has managed to transform his experiment now called eBay into one of the most successful companies of the dotcom era. Hundreds of thousands of members make their living entirely on eBay, more than 150 million people trust strangers with every transaction, and people find common ground where none seemed to exist before.
Omidyar’s success was in creating a business model that does not require carrying any inventory but gets a cut of every transaction. The company operates as a “market mechanism,” not a “market maker.” Much of the eBay prosperity was reached due to Omidyar's sense of what people want: a simple, central location to buy and sell items, and the ability to talk with (and perhaps eventually meet) people with similar interests.
Speaking about leadership it would be unfair to pass over in silence the present CEO of eBay Meg Whitman. Under her guidance, the company has earned praises for its management style and customer-centric philosophy. The experts say that eBay owes her the significant part of its success because “Whitman and her team really listen to the customers.” Actually Meg and people who work with her have managed to get feedback from customers and bring innovations to eBay, which is what buyers and sellers love about the website.
Background Links
Pierre Omidyar: The Founder of Ebay (Internet Career Bios), Jennifer Viegas, 2007
Business Fights Back: eBay Learns to Trust Again, Fast Company
Pierre Omidyar - Empower Seller, Fast Company
eBay: Last Man Standing, Knowledge@Wharton
EBay launches "Neighborhoods" amid broader reorganization, Herald Tribune
