Encyclopedia of Computer Science and Technology

EeBayeBay Inc. (NASDAQ symbol: EBAY) is the world’s largestonline auction and shopping site. The first appearance ofthe auction service was in 1995 as AuctionWeb, part of thepersonal Web site of Pierre Omidyar (see auctions, onlineand Omidyar, Pierre). Omidyar was surprised at how rapidlythe auction service (which was initially free) grew. Afterhe imposed a modest listing fee, Omidyar found himselfreceiving thousands of dollars in small checks, and decidedthat online auctions could become a full-time business.In September 1997, with Jeff Skoll now on board aspresident, AuctionWeb officially became eBay. When thecompany went public in 1998 (at the height of the first“Internet boom”), Omidyar and Skoll became instant millionaires.Meanwhile, eBay took on Margaret (Meg) Whitmanas its new CEO, and under her leadership the companyhas expanded rapidly through its first decade.eBay also seeks new markets and revenue through strategicacquisitions. These include payment services such asthe very popular PayPal, other e-commerce sites such asHalf.com, shopping.com, and rent.com, and even Skype,the Internet phone service. eBay’s net revenue for 2007 was$7.67 billion.Online AuctionsAuctions remain at the core of eBay’s business, with millionsof items in dozens of categories being listed and soldeach day. Offerings can range from factory equipment (inthe Business & Industrial category) to books, toys, sportsmemorabilia—even cars and, in a limited fashion, realestate. There are now hundreds of small- to medium-sizebusinesses who derive their revenue from eBay, whetherselling their own merchandise, acting as agents for others,or selling software or templates for managing auctions.eBay does not charge any buyer’s fees, but makes itsmoney by charging the seller for each listing and then apercentage of the selling price. As of 2007 eBay has regionaloperations in more than 20 countries, including China andIndia. (Yahoo, a distant second to eBay in online auctions,discontinued its U.S. auction site in mid-2007.)Beyond AuctionsIn recent years eBay has increasingly tried to build a more“traditional” online shopping experience in parallel with itsauctions. The Buy It Now feature allows a seller to list anitem at a fixed price, either instead of auctioning the itemor as an option that can be exercised if there have been noauction bids. Sellers can organize their offerings into regular“stores” to make it easier for customers to browse theirmerchandise. (Many traditional stores, such as antiques orcollectibles dealers, now offer some of their items via theireBay store.) eBay Express, introduced in 2006, adds convenienceby allowing users to buy selected items from multiplesellers using a standard online shopping cart.Like Amazon.com, eBay has focused considerable attentionon developing more ways for users to comment ontheir purchases and otherwise contribute content (seeuser-created content). The most important mechanismis feedback, which lets buyers summarize their opinionsof a transaction after its completion. The feedback system165