28 years ago, eBay started as AuctionWeb and sold its first product: a broken laser pointer.
- On Labor Day weekend in 1995, Pierre Omidyar founded AuctionWeb, which eventually became eBay, with the goal of creating an open marketplace connecting buyers and sellers directly.
- EBay grew rapidly, with sales of over $7.2 million by 1996 and 250,000 sales in 1996 alone. The company sold its millionth product in 1997.
- After rebranding as eBay in 1997, the company went public the following year and became very successful. eBay has been changing its history and generating revenue of about $10 billion in 2022.
On Labor Day weekend in 1995, 28-year-old Pierre Omidyar started typing the code for what was once called AuctionWeb. It was designed to provide an “honest and open marketplace” that would connect buyers and sellers directly. AuctionWeb went live on September 3, 1995, with the first auction item being an Omidyar laser point for $14.83. Omidyar approached the shopper and asked if he had accidentally bought a faulty product. He realized that the sale was intentional because the buyer wanted the replacement equipment to be built for him.
Soon, business on AuctionWeb began to boom as people began listing and selling all kinds of items. By 1996, over $7.2 million worth of merchandise had been sold. Although the website was initially free, as traffic increased, so did Internet fees, which led Omidyar to charge a small fee to customers who purchased items through AuctionWeb. In all of 1996, 250,000 items were sold on the site, but there were 200,000 in January 1997 alone. And that same year, the company sold its millionth product: the Big Bird jack-in-the-box. AuctionWeb is on the rise.
However, it was time to change the name. In September 1997, the entrepreneur rebranded AuctionWeb as eBay, which many know and online shopping mall even today. Omidyar originally wanted to name himself after his consulting firm, Echo Bay Technology Group. Since echobay.com was already owned by a gold mining company, Omidyar decided to buy the domain ebay.com, which was also a domain managed by the company all these years later.
As eBay grew financially and in terms of employees, the company’s board decided to go public in September 1998. In a remarkable turnaround, it easily surpassed its $18 per share price, ending the trading day at a high of $53.50 per share. on NASDAQ. Overnight, Omidyar and some of his co-workers became billionaires.
It was mainly onward and upward from there that sales exploded on eBay. Then the company began to work, acquiring several companies, including Skype, PayPal, Gumtree, and many more over the next few years to change its profile, combine with more services, and reach more customers. Although it has sold many of these companies now, it’s amazing to think that Skype was owned by anyone other than Microsoft at one time.
However, eBay is expected to make $10 billion in revenue by 2022, the largest project for a site that began as a one-man weekend project decades ago. We still consider eBay to be one of the best places to buy used cell phones and other gadgets, and that will continue to be the case. Many of its original employees are still working at the company, although its founder is not. Omidyar remained chairman until 2015, and currently holds the honorary position of director emeritus, which means he can attend board meetings to which he is invited but cannot vote.
But you might be wondering what happened to the broken laser pointer Mark Fraser bought. Fortunately, the first item sold on eBay is still intact and owned by Fraser. Interestingly, the retiree was no longer able to use the broken laser pointer, the item was left in a cupboard until years later when Fraser decided to approach Omidyar to thank him for the company’s success.
Fraser also considered the possibility of reselling the item on eBay, estimating the price it would fetch this time. That hasn’t happened yet, so we can only imagine what a historic milestone like this is worth, especially considering how far eBay has come since its inception 28 years ago.