It's a Guy Thing



In today’s age of technological advancements and the dominance of the internet, it’s hard to think back to a time before smartphones, YouTube and social media. Yet one thing we also take for granted is the ability to shop online, the luxury of getting anything you want while sitting in the comfort of your own home. And although many will immediately think of sites like Amazon for shopping convenience, it was actually the rise of an online auction website that started the ball rolling in online shopping accessibility. eBay, to this day, is the website to go to for bargains and rare commodities, yet very little is known about its founder Pierre Omidyar, an Iranian-American economist that changed the world back in 1995.


Born in Paris, France on June 21, 1967, Pierre Morad Omidyar was a gifted child from a young age but it was only when his family moved to the United States when his father accepted a residency at Johns Hopkins University Medical Center, that Omidyar discovered his love for computers. A gifted teen, he became interested in computers and would regularly sneak out of physical-education classes to play with his high school’s PCs. Instead of punishing Omidyar for ditching class, the principal decided to hire him to write a computer program to print catalog cards for the school library at $6 per hour. Little did Omidyar know that this would be the start of much bigger things to come. His entrepreneurship proved a little more lucrative a few years later when, while working on a bachelor’s degree in computer science at Tufts University, he wrote a program to help Apple Macintosh programmers manage memory. He distributed it online as shareware, asking users to pay on the honor system, but the few cheques that dribbled in barely covered the cost of the post office box he’d rented to collect them. 

In 1991, Omidyar and some of his friends founded a company to write programs for the then promising pen-computing market. Ever the entrepreneur, Omidyar set up an early e-commerce site called eShop on the company’s web site. However, Pen computing never really took off and the once-promising company started to struggle, but the eShop site proved lucrative enough to attract the attention of Microsoft, who later bought the company. Fed-up with start-ups, Omidyar took a job as a developer relations engineer for software-maker General Magic in 1994, and was making a little money on the side as a freelance Web page designer. It was around this time that he met his future wife, Pamela Wesley. An avid collector of Pez dispensers, Wesley complained that she was having difficulty finding like-minded souls on the Internet. Eager to help out, Omidyar included a small online auction service on his personal web page so Wesley could communicate, buy from and sell to other collectors from all over the United States and so eBay was born.


The fledgling auction site that Omidyar dubbed eBay, a reference to the San Francisco Bay area, was launched on Labor Day 1995, bore little resemblance to the company that would make Omidyar a fortune. Back then, Omidyar made no warranties regarding the goods being offered, assumed no responsibility and resolved no disputes. He just offered a place for the users to go online, interact with, and bid items. To the surprise of Omidyar, collectors of Barbie dolls, Beanie Babies and all sorts of household junk almost immediately seized eBay. The site had become so popular by February that it outgrew Omidyar’s personal web account. With the help of his friend and computer programmer Jeff Skoll, future president of eBay, Omidyar moved eBay to a much more expensive business site, began charging a few cents to list an item and collecting a small commission if it was sold, to cover its increased costs. Traffic on the web continued and eBay Inc. proved instantly successful. Omidyar started thinking he had finally stumbled on a way to turn his computer programming penchant into some real cash. “The biggest clue was that so many cheques were piling up at my door that I had to hire part-time help to open them all,” he told The New York Times.

Encouraged by this early success, Omidyar resigned from his day job and he and Skoll devoted all their time to building the community and technology of eBay. The duo rationalized that the community, and the profits, would continue to grow as long as the system worked. And they grew. By mid-1997, with more than 150,000 users bidding on 794,000 auctions every day, eBay had become one of the most visited websites on the internet. The average eBay shopper spent almost 3.5 hours per month on eBay, which is longer than the average shopper on any other site. Unknowingly, Omidyar had tapped one of the online world’s richest veins— the desire of people to connect with others who share their interests. And he realized that few interests generate more passion than collecting. “I thought people would simply use the service to buy and sell things,” he says. “But what they really enjoyed was meeting people.”When he set up a small online auction on his private website, Pierre Omidyar didn’t expect to make a dime, let alone become a billionaire. At the end of the day, he just wanted to impress his girlfriend. 


But within five months, what had started out as a hobby had become a $3 billion empire with more than 2 million subscribers, and Omidyar found himself at the head of one of the most popular and profitable Web-based businesses in Internet history. With the company doubling every three months, Omidyar and Skoll decided they needed venture capital backing and a savvy management team. In June 1997, they took the eBay business plan to Benchmark Capital and got a $4.5 million check for a 22 percent share of the company. Benchmark also promised to find a CEO to help run eBay, tapping Margaret Whitham, an executive with the Hasbro toy company, for the top spot. Whitham quickly turned what was a ragtag band of sellers hawking stuff from their basements into a lean, mean corporate machine. She created a new marketing division and placed all firearm and pornography auctions on separate, age-restricted sites. 

With new marketing energy and the dirty laundry safely hidden away, she took eBay public on September 24, 1998. The stock single-handedly revived the market for Internet initial public offerings. On its first day of trading, it rolled out at $18 per share. Four months later, it cracked the $300 mark, thrilling investors and making Omidyar an instant billionaire. By the end of 1998, the eBay boasted 2.1 million members and generated $750 million in revenues, enough business to attract the attention of e-commerce giant, which started running its own auctions in 1999. Smaller auction sites have joined the fray, as have conventional marketers like clothing companies, who started offering auctions on surplus products. So successful did the online auction site become that some industry observers predicted that Internet auctions would become the dominant e-commerce model in the future. 

In January 2000, Omidyar accepted his first board position outside of eBay. He joined the board of directors of ePeople, an online marketplace for technical support. He later started the philanthropic firm Omidyar Network. 

With an avowed interest in journalism, he also launched First Look Media in collaboration with Glenn Greenwald, the former Guardian reporter who published government documents leaked by the National Security Agency’s Edward Snowden. The company’s first online publication appeared in early 2014, The Intercept. The venture stresses “the fundamental importance of a free and independent press” for a democratic society, according to Omidyar in a statement.

From its humble beginnings trading Pez dispensers, eBay has become one of the hottest sites on the Internet and has revolutionized e-commerce. Its success has spawned dozens of imitators hoping to cash in on the online auction craze. Yet even with increased competition, eBay’s growth has not slowed one iota. By late 1999, eBay boasted nearly 8 million registered users trading an average of 33 million items per year, ranging from Beanie Babies to fine antiques. As for Pierre Omidyar, he’s just as amazed by eBay’s astounding growth as everyone else. “I didn’t set out to create a huge business on eBay. When it happened, I just took advantage of it.”

Credited Sources: