eBay Inc. (/ˈiːbeɪ/EE-bay, stylized asebay) is an Americanmultinationale-commerce company based inSan Jose, California, that allows users to buy or view items viaretail sales throughonline marketplaces and websites in 190 markets worldwide. Sales occur either viaonline auctions or "buy it now" instant sales, and the company chargescommissions to sellers upon sales. eBay was founded byPierre Omidyar in September 1995. It has 132 million yearly active buyers worldwide and handled $73 billion in transactions in 2023, 48% of which were in the United States. In 2023, the company had a take rate (revenue as a percentage of volume) of 13.81%.[1] The company is listed on theNasdaq Global Select Market and is a component of theS&P 500 and formerly theNasdaq-100.
eBay can be used by individuals, companies and governments to purchase and sell almost any legal, non-controversial item. Buyers and sellers may rate and review each other after each transaction, resulting in areputation system. The eBay service is accessible via websites andmobile apps. Software developers can create applications that integrate with eBay through the eBay API. Merchants can also earn commissions fromaffiliate marketing programs by eBay.
eBay was founded as AuctionWeb inCalifornia on September 3, 1995, by French-bornIranian-American computer programmerPierre Omidyar as a hobby to make some extra money.[2] One of the first items sold on AuctionWeb was a brokenlaser pointer for $14.83. Astonished, Omidyar contacted the winning bidder to ask if he understood that the laser pointer was broken; the buyer explained: "I'm a collector of broken laser pointers."[3]
In February 1996, Omidyar'sinternet service provider informed him that he would need to upgrade to a business account due to the highweb traffic of his website. The monthly price increase from $30 to $250 prompted Omidyar to obtain support from his mother's family (his grandfather, GeneralMahmud Mir-Djalali was the "father" ofIran's Defense Industries).[4] The website made $1,000 in its first month, which was more than it cost to run, and $2,500 in its second month.[2] Chris Agarpao was eBay's first employee; he processed mailed check payments.[5]
Jeffrey Skoll was hired as the first president of the company in early 1996.[5] In November 1996, the company launched online auctions for airline seats, hotel rooms, cruise berths and other travel-related products in partnership with Electronic Travel Auctions. By that time, the company had hosted more than 200,000 auctions since its founding 14 months earlier.[6]
The company changed the name of its service from AuctionWeb to eBay in September 1997, after Echo Bay Technology Group, Omidyar's consulting firm. The echobay.comdomain name was already registered byEcho Bay Mines, a gold mining company, so Omidyar shortened it to eBay.com. In 1997, the company received $6.7 million inventure capital funding fromBenchmark.[7]
The frequently repeated story that eBay was founded to help Omidyar's fiancée tradePez candy dispensers was fabricated in 1997 bypublic relations managerMary Lou Song to give the media ahuman-interest story and to generate publicity with toy collectors.[5] The most purchased and sold items on the website wereBeanie Babies, the most difficult toys to find in retail stores, accounting for 10% of all listings in 1997.Ty, the manufacturer, had set up a website whereby people could trade used Beanie Babies. However, it was overwhelmed with unsortable listings. With a user-friendly interface, eBay became popular with collectors.[8]
Meg Whitman was appointed president andCEO in March 1998. At the time, the company had 30 employees, 500,000 users, and revenues of $4.7 million in the United States.[7] In July 1998, eBay acquired Jump, the developer and operator ofUp4Sale, an advertising-supported auction website which at the time had 27,000 separate auctions and 50,000 registered members.[9]
In June 2000, eBay acquiredHalf.com for $312 million in stock.[13][14] In 2000, eBay partnered withEscrow.com to handleescrow for purchases and sales of motor vehicles, later expanded to other transaction types.[15] By year-end, it had 22.5 million registered users and 79.4 million auctions per quarter.[16]
In January 2001, eBay acquired a majority stake in Internet Auction Co. Ltd, operator of the largestinternet auction website in South Korea.[17] In February 2002, eBay acquired iBazar, a Frenchonline auction site founded in 1998, for approximately $112 million in stock.[18][7] eBay entered the Chinese market in 2002 and shut down its Chinese site in 2007 due to competition from local rivalTaobao.[19][20]
In February 2002, eBay exited Japan due to competition fromYahoo! Japan and began operations in Taiwan with the acquisition of NeoCom Technology for $9.5 million.[21][22] In June 2006, eBay turned over its operations in Taiwan to a joint venture partner.[23]
On May 28, 2003, in the case ofeBay Inc. v. MercExchange, L.L.C., which had implications for the treatment ofbusiness method patents, aUnited States district court jury found eBay guilty of willful patent infringement and ordered the company to pay $35 million in damages afterMercExchange accused eBay of infringing on three patents, one of which is used in eBay's "Buy It Now" feature. The decision was appealed to theUnited States Court of Appeals for the Federal Circuit (CAFC). The CAFC affirmed the judgment of willful infringement, and reversed the lower court and granted a permanentinjunction. eBay appealed the permanent injunction to theSupreme Court of the United States, which on May 15, 2006 found an injunction is not required nor automatic in this or any patent case where guilt has been established. The case was sent back to the Virginia district court for consideration of the injunction and a trial on another MercExchange patent.[29]
In 2003, eBay sought to develop itse-commerce business in China, acquiring the country's leading online auction platform (EachNet) and reaching an 85% market share.[30]: 51 Within four years, the development of Alibaba'sTaobao resulted in eBay's market share in China decreasing to 7.7%.[30]: 51–52
In August 2004, eBay acquired 25% of theclassified advertising websiteCraigslist for $32 million.[31][32] Former disgruntled Craigslist executive Phillip Knowlton was the seller.[33] In December 2004, eBay acquired Rent.com for $415 million.[34]
ProStores was an e-commerce website hosting company owned by eBay. Formerly known asKurant StoreSense, ProStores was acquired by eBay Inc. by the end of 2005 changing the name to ProStores by eBay.[43] ProStores' feature set included simple wizard-driven website, e-commerce capabilities, site design tools and e-business management. Smaller merchants could also manage the entire process of posting and selling products on eBay using the ProStores interface. It also offered inventory management, supplier communication and integration withQuickbooks andDreamweaver. eBay announced on July 1, 2014 that support for the platform would end February 1, 2015.[44] In February 2006,Intuit launched a web-based version of ItsDeductible, a donation tracking service, using data from eBay to help users assign amarket value to the items they donate.[45]
eBay Express logo
In April 2006, eBay launched eBay Express, a site that was designed to work like a standard Internet shopping site, with fixed prices and no bidding involved. The website had 10 million items listed upon its launch.[46][47][48][49] The site was shut down in October 2008.[50] In January 2007, eBay acquiredStubHub, anonline marketplace forticket resale, for $310 million.[51][52][53][54] In January 2008,Meg Whitman resigned as president and CEO of eBay to enter politics, and was replaced withJohn Donahoe. Whitman remained on the board of directors and continued to advise Donahoe through 2008.[55]
In April 2008, eBay sued Craigslist, claiming that in January 2008, Craigslist took actions that "unfairly diluted eBay's economic interest by more than 10%", making eBay lose its seat on theboard of directors of Craigslist.[56] Craigslist countersued in May 2008 alleging that eBay used its board seat to gain insider information about Craigslist that was used to compete against the company.[57] In September 2010, Delaware JudgeWilliam B. Chandler III ruled that the actions of Craigslist were unlawful and that the actions taken by Craigslist foundersJim Buckmaster andCraig Newmark had "breached their fiduciary duty of loyalty", and restored eBay's stake in the company to 28.4% from a diluted level of 24.85%.[58] However, the judge dismissed eBay's objection to a staggered board provision, citing that Craigslist has the right to protect its own trade secrets.[59][60][58]
In May 2008, eBay announced the opening of a building on the company's North Campus inSan Jose, California, the first ground-up structure in the city to be built toLEED Gold standards. The building, the first the company had built in its 13-year existence, uses an array of 3,248 solar panels, spanning 60,000 square feet (5,600 m2), and providing 650 kilowatts of power, 15–18% of the company's total energy requirements, reducing carbon dioxide usage by 37 million pounds over 30 years. The building also has energy-efficient lighting and water system and most waste is recycled.[61]
In April 2009, eBay agreed to acquire a controlling stake inG-Market, a South Korean online retailer, for $413 million.[62][63] In May 2009, eBay launched the Selling Manager Applications program (SM Apps). The program allows approved developers to integrate their applications directly into the eBay.com interface.[64]
In November 2009, eBay sold a 70% stake in Skype to a consortium led bySilver Lake Partners andMarc Andreessen at a $2.75 billion valuation, while retaining a 30% minority ownership interest in Skype, after failing to integrate Skype into the company's online marketplace.[65][66][67]Microsoft acquired the entire company for $8.5 billion in May 2011.[68]
In June 2011, eBay acquired GSI Commerce for $2.4 billion.[69] In June 2013, it was renamedeBay Enterprise.[70] In May 2012, Primedia (nowRent Group), acquiredRent.com from eBay for approximately $415 million.[71][72] In September 2012, eBay introduced a new logo using a thinner variation of theUnivers typeface. It replaced the thicker Univers logo.[73][74][75]
In October 2012, eBay launched an international shipping partnership withPitney Bowes whereby a seller of an item to be shipped internationally can send the item to a Pitney Bowes facility in their home country, which then forwards it to the international buyer, taking care of all international shipping requirements.[76] The company also launched a partnership withFedEx to offer discounted shipping options to sellers.[77]
In November 2012, eBay was charged in theHigh-Tech Employee Antitrust Litigation, accused by theUnited States Department of Justice of entering into non-solicitation agreements with other technology companies involving highly skilled employees.[78] The litigation was settled in May 2014, with eBay required to end anti-competitive practices.[79]
On September 30, 2014, eBay announced it would spin off PayPal into a separate publicly traded company, a demand made nine months prior by activist hedge fund magnateCarl Icahn.[80][81] The spinoff was completed on July 18, 2015.[82][83][84]
In January 2015, eBay acquired Vivanuncios, aclassified advertising website in Mexico.[85] In June 2015, eBay sold its stake in Craigslist back to the company, ending the litigation.[86][87][88][89] In August 2015, eBay sold a portion of its stake inSnapdeal.[90][91] In September 2015, Propay andSkrill were eliminated as payment methods on the eBay website, citing low usage.[92]
Flipkart and eBay entered into a strategic partnership in July 2017 under which eBay acquired a 5.44% stake in Flipkart in exchange for the contribution of its India business unit valued at $211 million and a $514 million cash investment in Flipkart. Flipkart launched a program to allow its sellers to sell to customers globally in partnership with eBay. eBay reported a gain of $167 million on the sale of its India operations.[93][94][95][96] In May 2018, eBay sold its stake in Flipkart toWalmart and relaunched its operations in India.[97] In August 2017, eBay shutHalf.com.[98] In October 2017, eBay releasedimage retrieval capability allowing users to find listings on the site that match an item depicted in a photo, usingartificial intelligence andmachine learning technologies.[99][100]
On January 31, 2018, eBay announced that it would replace PayPal as its primary payments provider with Netherlands-based start-upAdyen, resulting in lower costs and more control of merchants.[101] In May 2018, eBay acquired the Japanese e-commerce platformQoo10 for $573 million.[102][103] In July 2018, eBay announced support forApple Pay as well as a partnership withSquare for seller financing loans of up to $100,000.[104][105] In September 2018, in response to theYouTube headquarters shooting, eBay announced plans to install a security fence around the perimeter of its San Jose headquarters to protect employees.[106]
In March 2019, the company paid its firstdividend following investor pressure to improve shareholder return.[107] On July 31, 2019, the company acquired a 5.59% stake in Paytm Mall.[108][109] In September 2019, facing pressure fromactivist shareholderElliott Investment Management,Devin Wenig resigned as CEO.Scott Schenkel, senior vice president and chief financial officer since 2015, was appointed as the interim CEO.[110][111] In November 2019, eBay agreed to sell StubHub toViagogo for $4.05 billion in cash; the sale was completed in February 2020.[112][113][114]
In September 2020,Pierre Omidyar resigned from the board of directors, after resigning as chairman in 2015.[120] In November 2021, eBay sold its South Korean business toEmart for $3 billion.[121][122]
In May 2022, eBay acquired a stake inFunko and became the preferred secondary marketplace for Funko.[123] In June 2022, the company acquired KnownOrigin, a marketplace fornon-fungible tokens.[124][125] In August 2022, the company acquired the myFitment group of companies, specializing in online sales of automotive and powersports parts and accessories.[126] In October 2022, the company acquiredTCGPlayer, a marketplace for collectible card games, for up to $295 million.[127][128]
UsingMissionFish as an arbiter, eBay allows sellers to donate a portion of their auction proceeds to a charity of the seller's choice and charges discounted fees for charity auctions.[148]
High-profile charity auctions facilitated via eBay include the "Power Lunch" with investorWarren Buffett for 8 people at theSmith & Wollensky restaurant in New York City, with all of the proceeds going to theGlide Foundation. Auctions were held annually in 21 years between 2000 and 2022, with no auctions in 2020 and 2021 due to theCOVID-19 pandemic. In total, auctions on eBay for lunch with Buffett raised $53.2 million for the Glide Foundation, with winning bids ranging from $2 million to as high as $19 million for the final auction in 2022.[149][150][151][152] In May 2024, a charity auction for lunch withMarc Benioff, CEO ofSalesforce, raised $200,000 plus an additional donation of $1.5 million for the Glide Foundation.[153]
Also benefitting charity, a letter sent to Mark P. Mays, CEO ofClear Channel Communications by SenatorHarry Reid and forty otherDemocratic senators, complaining about comments made by conservative talk show hostRush Limbaugh, sold for $2,100,100, with all of the proceeds going to the Marine Corps-Law Enforcement Foundation, benefiting the education of children of men and women who have died serving in the armed forces. The winning bid was matched by Limbaugh.[154]
In 2022, more than $163 million was raised for charities via the platform.[1]
In June 2020, five employees were terminated and were subject to charges ofcyberstalking after they were accused of targeting Ina and David Steiner, the editors and publishers of EcommerceBytes, anewsletter that eBay executives viewed as critical of the company. In addition to sending harassing messages anddoxing, the defendants "ordered anonymous and disturbing deliveries to the victims' home, including a preserved fetal pig, a bloody pig Halloween mask, a funeral wreath, a book on surviving the loss of a spouse, and pornography". The defendants also vandalized the couple's home inNatick, Massachusetts.[155][156][157][158][159] The conspirators pleaded guilty and most were sentenced to prison terms.[160] Wenig, the company's CEO at the time of the harassment campaign, who was frequently targeted by the newsletter, was found by investigators to not have any knowledge about the harassment activities and was not charged. He left the company in September 2019 with a $57 millionseverance package.[161][162][163][164] Steve Wymer, chief communication officer, who had ties with local politicians, was fired "for cause" for alleged involvement but was not charged and was hired by the local chapter of theBoys & Girls Clubs of America.[165][166][167][168]
Fraud committed by sellers includes sellingcounterfeit merchandise /bootleg recordings,shill bidding (undisclosed vendor bidding that is used to artificially inflate the price of a certain item by either the seller under an alternate account or another person in collusion with the seller), receiving payment and not shipping merchandise, shipping items other than those described, giving a deliberately misleading description or photo, knowingly and deliberately shipping faulty merchandise, denying warranty exchange after pre-agreeing toreturn merchandise authorization ofdefective on arrival merchandise, knowinglyfencing (selling stolen goods), offering nonexistent goods for sale (including goods that could not exist - e.g. devices with battery capacities far beyond that possible for the form factors of the listed items), misrepresenting the cost of shipping, using bulk shipping prices to knowingly mask much higher costing, individual return shipping, and using pseudo-accounts to make high nonpaying bids on similar items that competitors are selling. eBay has been criticized for not doing enough to combat shill bidding. There are techniques such asauction sniping, which let buyers avoid shill bidders.[169][170]
Fraud committed by buyers includes filing a false shipping damage claim with the shipping company,friendly fraud (receiving merchandise and claiming otherwise), returning items other than received, removing parts from an item and returning it for a refund, sending a forged payment-service e-mail that states that he or she has made a payment to the seller's account as proof of payment, making a low bid then using pseudo-accounts to make high nonpaying bids in an attempt at gaining a low second chance offer price, damaging a non-refundable item to get a refund by claiming that the seller sent the item already damaged (in cases ofbuyer's remorse), and apackage redirection scam, in which the return package is filled with garbage and sent to the wrong address.[171][172]
In 2004,Tiffany & Co. filed a lawsuit against eBay claiming that over 70% of the Tiffany silver jewelry offered for sale on eBay was fake and that eBay profited from the sales ofcounterfeit Tiffany items that infringed on its trademark.[173] On July 14, 2008, aFederal District Court judge ruled that eBay does not have a legal responsibility to monitor users selling counterfeit items.[174] In 2010, the Second Circuit affirmed this decision inTiffany (NJ) Inc. v. eBay Inc.[175]
In June 2008, a court in Paris awarded damages of €40 million toLVMH over eBay auctions of counterfeit bags, perfumes, and other items sold by non-authorized retailers and entered a permanent injunction against eBay auctions of LVMH perfumes, whether counterfeit or not. eBay banned such items from its site.[176][177] Also that month, a court in Troyes, France, awarded eBay to pay luxury goods makerHermès €20,000 due to the sale of two counterfeit bags on eBay in 2006. The court also ordered eBay to post the ruling on the home page of eBay's French website for three months.[178]
Items stolen from theBritish Museum in 2013 were auctioned on eBay in 2016. The museum reported that several items of jewelry made of gold, semi-precious stones, and glass, dating from between 1,500 BC and the 19th centuryAD, were among those missing. One piece of ancient Roman jewelry made from onyx – valued between £25,000 and £50,000, or US$32,000 and US$63,000 – was listed on eBay with a minimum price of £40 (US$50) in 2016. There were no bids made for the treasure. The police are investigating this case.[179] The company said that it is supports local police in investigations and removes listings containing stolen property.[180]
In 2021, the estate ofDr. Seuss requested from eBay, and the company complied, to ban the sale of sixDr. Seuss books due to concerns that some illustrations contained therein were racially insensitive. This led to backlash from followers ofright-wing politics and ignited a surge of interest in the discontinued books.[181][182][183]
In September 2023, theUnited States Department of Justice sued eBay, accusing it of violating theClean Air Act and other environmental laws by allowing the sale of several illegal products, including devices that defeat automobile pollution controls, restricted-use pesticides, and paint and coating removal products containingmethylene chloride.[184]
In 2020, developer Dan Nemec discovered that eBay wasport scanning its users usingLexisNexis' ThreatMetrix product to detect remote access. The port scanning was performed usingobfuscated client-side JavaScript which attempts to open WebSocket connections tolocalhost on ports commonly used by remote access tools likeVNC.[185][186]
