eBay is one of the very few companies that have shown a profit from the first. eBay’s history goes back to Labor Day weekend, September 1995 when Pierre Omidyar put together a simple auction site for his friends to use. He originally called it Auction Web.

The first item sold he sold was a broken laser pointer, for $14.83. When the sale ended, Pierre contacted the buyer to make sure he understood that the laser pointer was broken. The buyer said yes and explained that he collected broken laser pointers!

(You may have read that eBay was originally developed to help his fiancée trade her Pez Collection—that was just a 1997 PR story. A few years later in 2002 they admitted it was just a fabrication.)

Operating out of his house, this online garage sale grew quickly. Site traffic grew through just word of mouth. When faced with $250-a-month hosting charges from his ISP, Omidyar decided it was time for his hobby to become a business. He decided that he would not charge buyers a fee or charge sellers to list items. The only fees charged would be a percentage of the final sales price of any item sold. To his surprise, envelopes started arriving in the mail, some containing nickels and dimes taped to cardboard. Soon he had envelopes with checks and cash coming in every day. He was too busy handling Auction Web that he had to hire help just to open the sacks of mail after a while. The sacks of mail were often just piled in a corner, unopened for days. Still operating out of his home, Pierre got to the point that his “hobby” was making more money than his regular day job, so he left that job to run Auction Web full time.

With the site growing daily, he needed more employees, office space, and to re-organize into a full-time business. Originally, Pierre wanted to use the name Echo Bay for the website, but that name was already taken by a gold mining company, so he shortened it to eBay. In the process of redesigning the site (it had started out very plain and gray) they decided to use the colorful eBay logo that is so recognizable today.

He added more people to help with the emails coming in from buyers and sellers. He set up discussion and forum areas. He made some ground rules, all based on the company’s core values: people are basically good, everyone has something to contribute, and an open environment brings out the best in people. These policies have always been in place and have contributed toward the continued success of eBay for both buyers and sellers.

Since those early days, eBay has grown to become the world leader in the online auction field with more items and categories than any of its competitors. The eBay community has grown to well over 175 million registered users worldwide. Millions of people from all walks of life have discovered eBay, and many have built profitable part-time or full-time businesses based on the concept.