As an e-commerce pioneer, eBay belongs to the old guard in the online business. The group experienced a steep rise, but that was a long time ago. For its 25th anniversary, eBay is bobbing around in the shadow of Amazon and Alibaba and is no longer one of the top class.
Not many Internet companies have a quarter of a century under their belt, so eBay is one of the veterans of the online era. Few ecommerce firms have seen so much competition come and go. But the online trading platform itself has also been overshadowed by bigger rivals such as Amazon and Alibaba in recent years.
EBay is celebrating its 25th anniversary on Thursday, but it’s not about expansion and prosperity. Recently there was even a tangible scandal.
The beginning: a broken laser pointer
At the very beginning there was a broken laser pointer. That was the article that was posted on the AuctionWeb website on September 3, 1995 by the then 28-year-old eBay founder Pierre Omidyar. A few days later, the first hammer price was $ 14.83. The perplexed Omidyar asked the bidder to be on the safe side whether he was aware that he had just bought a defective device. But everything fit: The buyer was a collector of broken laser pointers.
At first Omidyar practically ran the business on its own, in 1996 the first employee hired Chris Agarpao, who is still employed by the group. But it didn’t really start until 1997 when the company was renamed eBay and the rating system was introduced for buyers and sellers. In March 1998, Meg Whitman was hired as CEO, which was to shape the rise of the company. In September followed the brilliant IPO on the Nasdaq, which made Omidyar suddenly a billionaire.
As was common before the dot-com bubble burst, modest numbers were enough to impress investors. In the six months leading up to its IPO, eBay had made just $ 348,000 on sales of $ 14.9 million. Some analysts saw some now-forgotten e-commerce rivals like Onstar as better business. Omidyar is now concentrating on the role of a patron and finances, among other things, the investigative website “The Intercept”, which is known from Edward Snowden and the NSA scandal.
Foundation stone for wealth of the Samwer brothers
In Germany, eBay also laid the foundation for the Samwer brothers’ wealth: Omidyar bought the eBay clone Alando, which had been founded around six months earlier, from them in 1999 for over 50 million US dollars. The Germans discovered eBay in California and implemented the idea in Germany faster than the original could enter the market.
eBay then reached ten million registered members worldwide. Today there are 182 million active buyers and around 1.5 billion offers are on the marketplace at any given time.
It’s hard to believe from today’s perspective, but there were times when eBay was rated significantly higher by investors than the world’s largest online retailer Amazon. EBay now looks like a dwarf with a market value of almost 40 billion US dollars compared to Amazon with 1.6 trillion. That is also one of the reasons why the party mood on the 25th birthday should be limited.
Competitors such as Amazon and Alibaba have long left the former Internet auction company, which has developed into a normal online trading platform over the years.
No longer in the Champions League
EBay is currently experiencing a slight upswing because the online shopping boom in the Corona crisis is bringing strong business growth. But overall, at least since the spin-off of the high-growth ex-paid subsidiary PayPal five years ago, it has been clear that eBay is no longer in the Champions League of Internet companies.
An affair in which ex-employees allegedly bullied bloggers who criticized the company recently became really unpleasant and potentially damaging to reputation for eBay. The prosecution’s indictment reads in part like the script of a bad horror film.
The six former eBay employees are said to have sent the authors of an online newsletter on the subject of e-commerce, including live cockroaches, a funeral wreath and a pig mask, to intimidate them.
The accused are now threatened with years of imprisonment and high fines. eBay immediately stressed in a statement that the charges were not directed against the company itself or against current employees. However, it is clear from the court documents that the scandal spread to the executive floor. While it is unclear to what extent management itself was a driving force behind the actions, the complaint clearly links two members of eBay’s management team at the time.
One of them is the former head of the communications department, who was quickly fired in the course of the affair. The other is said to be explosively ex-CEO Devin Wenig, who abruptly submitted his resignation in September 2019. An internal investigation into the incidents revealed that Wenig’s communication was inappropriate, eBay said after the scandal became public in June. However, there is no evidence of prior knowledge or authorization of the intimidation.
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