Ebay - Became Public Company In 1998, Enjoyed Growth And Expansion, 1999-2000, Ebay Couldn't Be Beat In 2001

eBay was founded in 1995 by Pierre Omidyar, who wanted to set up an auction site for sellers of obscure and collectible items. After the site proved popular, eBay was incorporated in May 1996. All of the inventory, ordering, shipping, and payments were handled by sellers and buyers who registered on the eBay site. The company's revenue came from commissions on items that were sold and from listing fees.

In 1998 Margaret C. "Meg" Whitman became eBay's CEO, joining the company after working at FTD Inc., Walt Disney Co., and Hasbro Inc. eBay was both popular and profitable, having transformed auctions into highly charged classified ads. Last minute bidding frenzies were common on the timed auctions. By providing feedback from buyers and sellers, eBay had succeeded in establishing an online community. Customer loyalty was a key factor that allowed the site to maintain a dominant position in the auction market. Tips and gossip were shared on chat boards, and many people came to earn their living by selling items on eBay.

After Whitman joined eBay, she revamped the site to make it easier for users to participate. She sought ways to make it safer for customers to purchase items. Whitman revamped the payment process by allowing customers to use credit cards instead of personal checks or money orders. She also began expanding eBay beyond its core model of collectibles. eBay acquired art auctioneer Butterfield & Butterfield in 1999 and used the Los Angeles area as a test market for local auctions of items that were difficult to ship, such as cars and furniture. As Whitman told Newsweek in 1999, "We are enabling a kind of commerce that didn't exist to any extent before, and that's person-to-person commerce."