The story goes that founder Pierre Omidyar wanted to call it Echo Bay, but the name had already been registered by a Canadian company mining for gold in Nevada. So Pierre Omidyar chose eBay.
The Mac days
Pierre Omidyar is the founder of eBay. He was born in Paris in 1967, the only child in a French-Iranian family. At the age of six, the family emigrated to the United States and he grew up in and around Washington, D.C. Pierre was bitten by the computer bug at a very early age, sneaking out of the gym to teach himself on his science teachers cheap computer. He later graduated to an Apple II and got paid to computerize the school’s library catalogue.
n the mid-1980s, Pierre Omidyar went to Tufts University near Boston. His main subject was computer science and Apple programming became his obsession. Apple had become a sort of cool trendy alternative to the major computer companies. Pierre did all his work on a Macintosh from his dorm room, rather than use the PCs in the computer laboratory. He created his first Mac programmer’s utility tool for other programmers. He got a summer job as an intern in Silicon Valley with Innovative Data Design, a company which wrote image programmes for Macs. This led to a full-time job and Pierre Omidyar took the following semester off to continue working. After completing a further semester at Tufts University, he moved to the University of California-Berkeley, where he finished his degree.
A bit of business pays off
In 1991, Pierre Omidyar teamed up with a colleague to found the Ink Development Corporation producing software for pen-based computers. This was the technology which - it was thought - would replace the keyboard with a stylus. It did not! However, Ink Development had also developed some software tools for online commerce. They changed direction and re-launched as an electronic retailer – eShop.
In 1994, things weren’t moving fast enough for Pierre Omidyar and so he left eShop. He kept a fair- sized stake in the company and when it was bought by Microsoft two years later, became a millionaire before the age of 30.
A story
As legend has it, in summer 1995 Pierre Omidyar was dining with his fiancée, Pam Wesley, when she mentioned that she was having problems finding PEZ collectors with whom to trade. PEZ, originally breath-freshener mints (later fruit-flavoured sweets) in dispensers with character heads, had become collectors’ items. This, so the story goes, gave Pierre the eBay idea. But actually it is not true. The fact is that Pierre Omidyar was following all other computer freaks in trying to find a use for the Internet.
The dawning
Though Pierre Omidyar had never been to an auction in his life, he believed that an auction could be an interesting marketing tool. Place an advert giving a minimum price and if several people show an interest - why not let them bid?
At the time, Pierre Omidyar was employed by a company called General Magic and so had to do his programming in his spare time. Over a long weekend, he created an auction web site. It didn’t look very appealing, nor did he have a clue as to what the public might want to auction. He just created various categories: antiques, books, comics, computer items, electronics……. and called the site AuctionWeb. At the beginning the site was free and slowly began to attract visitors.
Traffic on AuctionWeb steadily increased through the autumn of 1995 and by the end of that year AuctionWeb had hosted thousands of auctions with over ten thousand bids.
Time to cash in
In 1996, Pierre Omidyar decided to start charging sellers a percentage of the final sale price. He had no idea whether it would be accepted or not, but soon the cash and cheques came rolling in. AuctionWeb was one of the few to make a profit right from the start. By June, revenues had doubled for the fourth consecutive month, reaching $10,000. Pierre Omidyar’s hobby had become a business. He left General Magic and hired his first part-time employee, Chris Agarpao.
It’s said that at this time, the staff sat around on folding chairs and DIY style desks were delivered in cardboard boxes to be screwed together by the employees. It is also said that there was only one single telephone and the staff were not allowed to answer it. Anyway, the number was kept secret because Pierre Omidyar wanted to keep costs to a minimum. The intention was that any customer with a query should send an e-mail.
By August, AuctionWeb was so successful that it was joined by Jeff Skoll, a go-getting entrepreneur who had done some consulting work for AuctionWeb. Pierre Omidyar believed that Jeff Skoll was the man to develop and drive the business. Around this time, the laidback dot.com types were faced by men-in- suits with economic degrees, who had the task of making money while the more relaxed Omidyar tended the AuctionWeb web site and community.
In 1998 eBay as it was now called, was launched on the stock exchange. Although the launch was very successful Odymar was not particularly satisfied. He had envisaged an auction in typical eBay style with the eBay community having a bite of the cherry, but Wall Street and the American stock exchange laws saw it differently.
But in 1999, the casual approach almost brought ruin. Technology had been neglected and on 10 July, the whole computer system crashed and stayed down for 22 hours. Without backup! Luckily the company weathered the storm, got the system back up and running and very quickly invested millions in state-of-the-art technology.
A few years later
Today it’s clear that Pierre Omidyar’s perception has paid off. He quite simply believes that the human race is basically good. At the beginning, many prophesied that it could not work – complete strangers dealing with complete strangers. But it is now obvious that it does. He also believes that the Internet community should remain the central philosophy, fearing a steady commercial takeover. But some things have changed. Pierre Omidyar never wanted advertising on the web site. However, these days eBay is one of the favourite sites for banner advertising. Now known as eBay, the San Jose-based company has become the largest person-to-person online trading community. eBay used the web to create a totally new market in the form of an auction. It now has over 1,000 categories and bids are placed at the rate of over 600 per minute. It is said that over 250,000 items are added daily and that it has sold over 45 million items since its conception in 1995. The site has about 50 million registered users and employs a staff of over 2,500.
One of the most expensive items to be sold (as yet) was a Gulfstream II jet for $4.9 million! Despite his wealth - he is now a multibillionaire - Pierre Omidyar remains a modest man. In 2004 he was still driving around in a beat-up VW convertible.
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