History of the eBay Auction
As with many online companies that were started in the 1990s, eBay has enjoyed rapid growth and success. The company was started in 1995 by a computer programmer who ran the website from San Jose, California and initially sold collectible items. The website and auctions have changed since 1995, as the website's popularity increased and hundreds of millions of users joined eBay to engage in web commerce.
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History
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Consultant and freelance programmer Pierre Omidyar started eBay's precursor website, AuctionWeb in his San Jose, California home. The auction framework for AuctionWeb was used by Electronic Travel Auction to sell plane tickets and hotel rooms, and helped bankroll the larger release of the auction website. The company officially changed its name to eBay when Omidyar attempted to register the website with the name of his consulting company, Echo Bay Technology Group. Echobay.com was already in use and Omidyar decided to shorten the name to eBay instead. The website continued to gain momentum as it acquired $5 million in venture capital in 1997, hired Meg Whitman as President and CEO in 1998 and went public later that same year.
Auctions
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The first auctions on eBay were standard auction-style listings based on the Vickrey auction rules. The first item auctioned on AuctionWeb was a broken laser pointer that was purchased for $14.83 and utilized the Vickrey-styled system. In the winter of 2001, eBay offered the option sellers to also stipulate a "Buy It Now" format, that allowed the buyer to avoid waiting for the auction to end and purchase the item at a flat rate. In 2006, eBay implemented a "Best Offer" feature for Buy It Now auctions, allowing buyers to purchase an auction item at a flat rate below that of the seller's Buy It Now price, without waiting on the standard auction to end.
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Items
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Early auctions on eBay were mostly unregulated, allowing sellers to list nearly any item for purchase. The majority of auctions were managed by individuals selling antiques, collectibles and gadgets. Today, large companies like Dell, IBM and Nokia sell items on the eBay website.
Ratings
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After the official opening of eBay.com, basic seller and buyer reviews were left on the accounts of both parties. The intention was to track the reliability of the seller to ship the item in a timely manner, provide good quality items and have overall good conduct with the buyer. The buyer feedback was tracked to ensure a good payment history. In 2008, a more detailed seller-review system was implemented that allowed buyers to sellers based on four categories: shipping, item description, shipping and handling charges and seller communication. The seller's auction placement in search results are based on the reviews of buyers that have done business with them previously.
Payment
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A major issue with early eBay auctions was the monetary transaction that occurred after the auction's conclusion. Users utilized money orders and checks via mail for some transactions. Other sellers accepted payments via credit card through their websites. Acceptance of credit cards through the seller posed a security concern, and third party secure payment companies were utilized to interface with eBay as valid payment solutions. Purchased in May 1999, Billpoint was eBay's first online payment system and it was renamed eBay Payments. PayPal was used extensively as an alternative to Billpoint, and quickly became a more popular alternative. PayPal was purchased by eBay in 2002.
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