eBay 10 Years - 1996

The Year that Was: 1996 "I had a vague idea of what I needed to do as an entrepreneur, but I knew I wasn't going to be able to put together a business plan." - Pierre Omidyar

At the beginning of 1996, AuctionWeb—the online auction site computer programmer Pierre Omidyar had created and launched just four months before—was one man's "hobby." By the end of the year, it was a budding business with five employees, an office suite, 41,000 registered users, and tens of thousands of dollars in fees pouring in each month. The year also marked the beginning of another first for the fledgling site—message boards for everyone who used AuctionWeb or the people who soon became known as "the Community." The decision to charge fees, according to Pierre, grew out of necessity. Initially, he operated the site through Best, his $30-a-month home Internet service provider. But, as traffic on AuctionWeb grew, it was slowing down Best's system. In February, Best presented Pierre with its solution—it would charge him at the corporate rate of $250. To help defray this expense, Pierre, who had resisted the idea until then, started to charge fees. But, he would not, he decided, charge buyers anything. And he would not charge sellers to list items. He would, he concluded, only charge "final-value" fees, which would be a small percentage of the final sales price. In February, Pierre also introduced a new feature designed to delegate much of the site management to AuctionWeb users themselves—message boards. The first was the Feedback Forum, where registered users would work out disputes, expose bad practices and behavior, and praise good practices and behavior. Shortly afterwards, Pierre added The Bulletin Board, so buyers and sellers could ask each other questions without having to go through him first. About this time, the site's popularity began to grow in leaps and bounds. In March, revenues from the newly levied fees passed $1,000. By May, the revenues topped $5,000, convincing Pierre that he should hire someone to handle the collections. This turned out to be Chris Agarpao, AuctionWeb's first employee. Then, when revenues passed $10,000 in June, Pierre made two fateful decisions: he quit his day job at General Magic, and he hired Jeff Skoll—a recently minted Stanford MBA who had previously founded two high-tech startups—to be the company's first president. "I had a vague idea of what I needed to do as an entrepreneur," Pierre recalls, "But I knew I wasn't going to be able to put together a business plan." In Jeff, he had someone who could. By the end of the year, two more people were also AuctionWeb employees. One was Mary Lou Song, who Pierre and Jeff considered a perfect blend of the company's two pillars of commerce and community. Officially, her title was public relations manager. But she handled numerous tasks. The other was, Jim Griffith, a user who quickly earned a reputation among message board posters both for his friendly technical advice and for his eccentric manner. The eccentricity sometimes came in handy when "Griff" stepped in to resolve disputes between posters. Once, when a dispute between two such parties had escalated into an all-out war of words, Griff offered to give one of them a feather boa and the other an elaborate hat—both from an old trunk of his mother's clothing. The gesture literally disarmed the combatants, calming them down sufficiently so they could iron out their differences in a more respectful fashion.