Ebay History, Business Model,

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EbayHistory, Business Model, Stock History

• Kathleen Takemoto, John Tursi, John Mitchell,
  David Guyton

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• Created in 1995 by Pierre Omidyar, as a market
  that he perceived as fair and free (The Perfect
  Marketplace).
• His creation was originally called AuctionWeb,
  and was but one of the sites he hosted on his own
  server at Ebay.com. The others were sites for a
  start-up where his fiancé worked, a alumni site
  (also for his fiancé), and a site on the Ebola
  virus).
• The Ebay name came from the consulting company
  that Omidyar started, Echo Bay Technology Group.
• Omidyar would promote his auction website by
  posting in newsgroups and bulletin boards, using
  the line The most fun buying and selling on the
  Web.
• The site slowly picked up a user base, eventually
  raising expenses and causing Omidyar to start
  charging fees. People responded by sending
  envelopes stuffed with checks and cash.
• Omidyar eventually went to work full-time on the
  site, adding features like the Feedback Forum and
  the Bulletin Board.
• In 1996, Omidyar was joined by Jeff Skoll, an
  entrepreneur who Omidyar thought could help with
  his new venture. He was essential in getting the
  business off the ground.

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• The team was joined by Mary Lou Song in October,
  1997. Song was in charge of public relations, and
  helped to develop the star system used to rate
  members.
• AuctionWebs first form of competition came from
  Onsale.com, which provided similar services.
  However, Ebays popularity rose faster, allowing
  it to gain a big advantage. Their existing
  community was and would be their strongest asset.
  
• Eventually Omidyar hired software engineer Mike
  Wilson, who redesigned the site in C, taking it
  off its base PERL code.
• As the company matured, it took on many more
  employees, especially those with more typical
  business backgrounds.
• Omidyar and Skoll realized they needed someone to
  help further manage and develop the company. In
  February, 1998, they hired Meg Whitman as the new
  CEO.
• Ebay went public on September 23, with Yahoo
  opening its own auction services days before. The
  company was valued at more than 2 billion.
• Ebay looked for ways to return money back to the
  community, and thus created the Ebay Foundation
  in June 1998, a charitable institution.

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• On February 19, 1999, Ebay bans guns from its
  site. The ban causes a huge stir among its
  members. This is one of many times Ebay changed
  policies without first noticing the community.
  Eventually, alcohol and cigarettes are also
  banned.
• That year Ebay faces potential problems when
  Amazon opens it own auction services. Due to its
  experience, popularity, and features, Ebay comes
  out on top as the preferred auction site.
• On Thursday, June 10, 1999, Ebay experiences a
  crash unlike no other, experiencing an outage of
  approximately twenty-two hours. It was considered
  one of the companys worst moments in its short
  history. Whitman ultimately decides to put much
  more money into its technology needs, and hires
  Maynard Webb to replace Mike Wilson. Wilson is
  given the position of chief scientist.
• Ebay acquires German auction site Alando.de, and
  eventually Half.com in an attempt to reduce
  potential competitors. Ebay also acquires
  Billpoint, and eventually Paypal, two online
  payment systems.
• Reserve auctions are created, eventually carrying
  a fee. The implementation of the fee causes
  another uproar in the community, eventually
  prompting them to reduce it.

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• In April of 2000, Ebay Motors is launched. After
  a somewhat rocky start and multiple criticisms
  from the community, it eventually becomes a big
  success. In 2001, it sold approximately 1
  billion in cars.
• Ebays Buy It Now feature, introduced in late
  2000, becomes a permanent feature due to
  popularity. This enables a buyer to instantly end
  an auction and purchase the auctioned item at a
  fixed price.
• In 1999-2000, Omidyar and Skolls daily
  interaction with the company draws to an end,
  with Omidyar residing as Chairman of the Board.
• Today, Meg Whitman stills resides as CEO and
  President, with many of the old Ebay regime still
  working for the company.

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Ebay Auction Model

• Essentially, Ebay acts as a place for buyers and
  sellers to come together and do business, making
  profit from fees charged to the seller and a of
  every sale.
• The companys official mission is To help
  practically anyone trade practically anything on
  Earth.
• Their market basically reaches all over the
  globe, due to the vast power of the Internet.
• Ebay is not responsible for items sold on the
  site, insisting that they act only as a venue.
• Ebays strength is in its community, and they
  would not have achieved their current success if
  not for them.
• Another one of their strengths is that they have
  no warehouse or inventory to manage, as
  everything is handled by the buyers and sellers.
  This helped it beat out competitors, like
  Onsale.com, who had items come into their hands
  to inspect it for customers.

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Ebay Auction Model

• Ebays current list of services, as found in
  their company information, is as follows
• Billpoint and Paypal - online payment services
• Half.com a site for fixed-price trading
• Ebay International - Ebays global operations
• Ebay Motors a division of Ebay dedicated to the
  automotive industry
• Ebay Stores a way for sellers to customize a
  part of their site to suit their needs and
  attract more customers to their auctions
• Buy It Now service that enables a buyer to
  immediately end an auction and purchase the item

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Ebay Auction Model

• Ebay Professional services a place for small
  businesses to find help with technical issues and
  needs
• Ebay Local Trading local sites in sixty US
  markets which allow people to locate more items
  and deal with difficult to ship products
• Sothebys.com presented by Ebay a site
  featuring auction items from Sothebys auction
  house
• Ebay Live Auctions real-time bidding on
  auctions in auction houses.

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Ebay 1998-2002Current Stock Price 52.35
(10/4/02)

• Lowest
• 33.00/Share
• December 2, 2000

• Highest
• 334.00/Share
• February 2, 1999

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Ebay 1998-2002

• 1.) Within a period of 22 months, Ebay stock lost
  90 of its value.
• 2.) That is a difference of 331.00!!
• 3.) March 1999 31 Stock Split
• 4.) May 2000 21 Stock Split
• 5.) No stock split since May 2000.

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