eBay is my life

eBay is my life. It is my freedom!

eBay gives me a fun way to bring a little cheer to people

who really want to find something and I have it. I have met

some wonderful people through my buys and sells.

Conceived in 1995 on a really good idea from Pierre Omidyar, a 31-year-old software development engineer in California, eBay had grown beyond the wildest imaginations of its founder into one of the successes of the Internet revolution. eBay has grown to become the worlds largest online marketplace for the sale of goods and services by a diverse community of individuals and businesses. Between 1998 and 2002, the number of confirmed, registered eBay users grew from approximately 2 million to 62 million worldwide. In Q4 2002, eBay boasted 195 million listings, and in that whole year had completed transactions totaling US$14.9 billion. eBay is a place where small people can be big. In company documents, eBay defined its mission as helping practically anyone trade practically anything on earth. The eBay trading platform was an automated, topically arranged, easy-to-use, online service that was available on a 24-hours-a-day, seven-days-a-week basis and that enabled sellers to list items for sale and buyers to bid for and purchase items of interest. eBays big start was in tapping effectively into a segment of individuals that traded collectibles  one-of-a-kind items that usually came with a story or some unusual feature.

There were no efficient means of trading collectibles.

Collectors found it very difficult to get in touch with

other collectors who may want to buy their collectibles.

The physical marketplace for trading collectibles, prior to eBay, was very inefficient. eBay created an efficient marketplace for trading collectibles and gave easy access to this marketplace to collectors. The marketplace was open. Everyone could go there. This was really important. The principle of operating a non-exclusive marketplace was an anchor of eBays strategy. One consequence was that eBays item mix expanded rapidly from primarily collectibles to include practical everyday items, such as household goods, computers, consumer electronics, and other tradeables (such as tickets to sporting events). Item proliferation and the patterns of interest they generated would guide the creation of new categories. The aim of introducing new categories was to keep search simple and ease of use high.

Beyond the proliferation of categories, another consequence of the non-exclusive policy was reflected in the growing diversity of the user base. eBays user base had grown from individual consumers to also include merchants, small to mid-sized businesses, and, eventually, global corporations, and even government agencies. Still, in 2002, 95% of the

value of total transactions on eBay was generated by individuals and small businesses.

Between June 1999 and October 2002, the daily average number of bids at eBay had increased from 0.9 million to 5.25 million, and the daily average number of page views had increased from 54 million to 460 million. Furthermore, even while the number of registered users and transactions increased, gross merchandise sales (i.e. transaction value) per customer had remained relatively stable at around US$65. eBays revenues came primarily from fees that users paid for listings and completed transactions. To list items for sale, sellers on the site paid a nominal listing fee. By paying incremental placement fees, sellers could have items featured in various special ways. For example, a seller could highlight his or her item for sale by utilizing a bold font for the item heading, or opt for the Buy-It-Now feature, which enabled a seller to close an auction instantly, once a specified price was reached. eBay also collected (relatively small) fees when transactions were completed.

Also, through the acquisitions of Butterfields and Kruse, eBay had entered the off-line auction business. Butterfields, established in 1865, was the largest auction house headquartered on the West coast of the United States. It specialized in fine art, antiques,

and collectibles. Kruse, which operated in the state of Indiana, was established in 1971, and was one of the worlds leading collector car auction companies.

Trading platform

The eBay trading platform was composed of a user interface and transaction processing system based on internally developed proprietary software. The eBay platform supported the complete sale process, including notifying users via e-mail when they initially registered for the service, placed a successful bid, were outbid, listed an item for sale, and when an auction ended. The platform also sent daily status updates to active sellers and bidders.

The platform regularly updated a text-based search engine with the titles and descriptions of new items, as well as pricing and bidding updates for active items. eBays proprietary software also helped its product managers keep close tabs on the relative growth or decline of the sales of different items.These trends were used to decide when to split highly successful categories into sub-categories or to merge less successful categories.

To get people comfortable with the idea of trading online, eBay had created the Feedback Forum  a system of mutual user feedback. The system encouraged every user to provide comments and feedback on other eBay users with whom they interacted, and offered user profiles that included feedback ratings and incorporated user experiences. The Feedback Forum required feedback to be related to specific transactions. eBay prohibited actions that undermined the integrity of the Feedback Forum,5 such as a person leaving positive

feedback about himself or herself through multiple accounts or leaving multiple negative feedback for others through multiple accounts. Users that developed positive reputations had colour-coded star symbols displayed next to their user names to indicate the number of positive feedback ratings they had received. Before bidding on items listed for sale, eBay users were encouraged to review a sellers feedback profile to check their