eBay 10 Years - 1999

The Year that Was: 1999

"Will eBay Inc.'s customers stay loyal?"

Meg Whitman

With memories of their company's highly successful IPO fresh in their minds, eBay's employees—all 138—entered 1999 with a heightened sense of possibilities. But, in the year of U.S President Bill Clinton's impeachment trial, fears about the millennium bug, and the release of Stars Wars—the Phantom Menace (the movie that critics disliked but that still made $400 million at the box office), they faced new kinds of challenges. One was an increased emphasis on growth through acquisition and international expansion. During the year, eBay acquired such companies with capabilities that complemented its own as Butterfield & Butterfield, Billpoint, Blackthorne Software, and Kruse International. The company also launched built-from-scratch sites in the United Kingdom and Australia designed especially for community members in those countries. And, with the purchase of Germany-based Alando.de.ag, eBay did both—buying a company and turning it into an overseas subsidiary. On the whole, these developments occurred without major issues, and eBay was on its way to becoming a truly global enterprise with thriving user communities in more than 100 countries. Another challenge was much more sobering. A few minutes before 7:00 on the evening of June 10, 1999, the eBay site went down. At first, no one was alarmed—outages had occurred on the site since the company's early days, and usually the problem could be isolated and fixed in short order—at most a few hours. But, as time ticked by that night, the site wouldn't come up. In the middle of the night Meg called Sun Microsystems whose servers eBay used, and soon more than 50 engineers from both companies were working on the problem. With the site still down the next morning, Meg shared the unthinkable to the executive staff: What if the site never came up? Ultimately, however, the problems were found, and—just before 4:30 the next afternoon—the site was revived. The experience was a jolt for everyone with a stake in eBay, and the following Monday, The Wall Street Journal even posed the question: "Will eBay Inc.'s customer stay loyal?" But eBay executives responded quickly, writing a letter of apology to the community and offering to automatically refund the fees for any items listed during the outage—even if an auction had been completed. The community remained loyal. And eBay moved quickly to make sure that a problem of this magnitude would never happen again by building redundancy into the systems and bringing greater discipline to the IT operations. A major challenge met, eBay continued to grow and develop. Other 1999 highlights include the selection of Salt Lake City, Utah, for the company's new Customer Support center; the launch of eBay Motors; the addition of more than 500 new employees including such key executives as Maynard Webb, Jeff Jordan, Matt Bannick, and Lynn Reedy; the company's first stock split; and—still more solid evidence that eBay had arrived—the publication of the first edition of the bestselling eBay for Dummies. By year end, the company also marked another milestone—its 10 millionth registered user. In just three years, the eBay community had grown 244 times.