eBay Inc. is an American Internet company that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell goods and services worldwide.

 In addition to its original U.S. website, eBay has established localized websites in thirty other countries. eBay Inc. also owns PayPal, Skype,StubHub, Kijiji, and other businesses.
Origins and early history
The online auction website was founded as AuctionWeb in San Jose, California, on September 3, 1995, by French-born Iranian computer programmer Pierre Omidyar  as part of a larger personal site that included, among other things, Omidyar’s own tongue-in-cheek tribute to the Ebola virus.In 1997, the company received approximately $5 million in funding from the venture capital firm Benchmark Capital.The very first item sold on eBay was a broken laser pointer for $14.83. Astonished, Omidyar contacted the winning bidder to ask if he understood that the laser pointer was broken. In his responding email, the buyer explained: “I’m a collector of broken laser pointers.” The frequently repeated story that eBay was founded to help Omidyar’s fiancée trade Pez Candy dispensers was fabricated by a public relations manager in 1997 to interest the media. This was revealed in Adam Cohen’s 2002 book, The Perfect Store, and confirmed by eBay.
Chris Agarpao was hired as eBay’s first employee and Jeffrey Skoll was hired as the first president of the company in early 1996. In November 1996, eBay entered into its first third-party licensing deal, with a company called Electronic Travel Auction to use SmartMarket Technology to sell plane tickets and other travel products. The company officially changed the name of its service from AuctionWeb to eBay in September 1997. Originally, the site belonged to Echo Bay Technology Group, Omidyar’s consulting firm. Omidyar had tried to register the domain name echobay.com (the domain has recently been put up for sale) but found it already taken by the Echo Bay Mines, a gold mining company, so he shortened it to his second choice, eBay.com.
eBay went public on September 21, 1998, and both Omidyar and Skoll became instant billionaires. The company purchased PayPal on October 14, 2007
Items and services
Millions of collectibles, decor, appliances, computers, furnishings, equipment, vehicles, and other miscellaneous items are listed, bought, and sold daily. In 2005, eBay launched its Business & Industrial category, breaking into the industrial surplus business. Some items are rare and valuable, while many others are dusty gizmos that would have been discarded if not for the thousands of eager bidders worldwide. Anything may be offered for sale as long as it is not illegal and does not violate the eBay Prohibited and Restricted Items policy.[26] Services and intangibles can be sold, too. Large international companies, such as IBM, sell their newest products and offer services on eBay using competitive auctions and fixed-priced storefronts. Separate eBay sites such as eBay US and eBay UK allow the users to trade using the local currency. Software developers can create applications that integrate with eBay through the eBay API by joining the eBay Developers Program.In June 2005, there were more than 15,000 members in the eBay Developers Program, comprising a broad range of companies creating software applications to support eBay buyers and sellers as well as eBay Affiliates.
Controversy has arisen over certain items put up for bid. For instance, in late 1999, a man offered one of his kidneys for auction on eBay, attempting to profit from the potentially lucrative (and, in the United States, illegal) market for transplantable human organs. On other occasions, people and even entire towns have been listed, often as a joke or to garner free publicity. In general, the company removes auctions that violate its terms of service agreement after hearing of the auction from an outsider; the company’s policy is to not pre-approve transactions.
PayPal-only categories
Beginning in August 2007, eBay required listings in “Video Games” and “Health & Beauty” to accept its payment system PayPal and sellers could only accept PayPal for payments in the category “Video Games: Consoles”.[28] Starting January 10, 2007, eBay said sellers can only accept PayPal as payment for the categories “Computing > Software”, “Consumer Electronics > MP3 Players”, “Wholesale & Job Lots > Mobile & Home Phones”, and “Business, Office & Industrial > Industrial Supply / MRO”.eBay announced that starting in March 2008, eBay had added to this requirement that all sellers with fewer than 100 feedbacks must offer PayPal and no merchant account may be used as an alternative. This is in addition to the requirement that all sellers from the United Kingdom have to offer PayPal.
Further, and as noted below, it is a requirement to offer Paypal on all listings in Australia and the UK.
eBay Express
In April 2006, eBay opened its new eBay Express site, which is designed to work like a standard Internet shopping site for consumers with United States addresses (eBay Express). It closed in 2008. Selected eBay items were mirrored on eBay Express, where buyers shop using a shopping cart to purchase from multiple sellers. The UK version was launched to eBay members in mid-October 2006 but on January 29, 2008 eBay announced its intention to close the site.The German version was also opened in 2006 and closed in 2008 (eBay Express Germany).
eBay Specialty Sites
In June 2006, eBay added an eBay Community Wiki (eBay Wiki is now closed) and eBay Blogs to its Community Content which also includes the Discussion Boards, Groups, Answer Center, Chat Rooms, and Reviews & Guides. eBay has a robust mobile offering, including SMS alerts, a WAP site, J2ME clients, and an Apple iPhone application available in certain markets.
Best of eBay was a specialty site for finding the most-unusual items on the eBay site. Users could vote on and nominate listings that they found. It is now closed.
eBay Pulse provides information about popular search terms, trends, and most-watched items.
Bidding
Auction-style Listings
Bidding on eBay’s auction-style listings is called proxy bidding and is essentially equivalent to a Vickrey auction, with the following exceptions.
The winning bidder pays the second-highest bid plus one bid increment amount (i.e. some small predefined amount relative to the bid size), instead of simply the second-highest bid. However, since the bid increment amounts are relatively insignificant compared to the bid size, they are not considered from a strategical standpoint. (eBay’s explanation of bid increments)
The current winning bid is not sealed, but instead is always displayed. However, at any given moment, the highest bidder’s bid is not necessarily displayed, since this amount may be higher than the amount required to win the auction.
Example of bidding on an auction-style listing
Suppose bidding for an item starts at $1.00 and that the bid increment amount in this price range is $.25. Emily bids $3.00 for the item, and since no one else has bid yet, eBay displays that the current winner is Emily, with a bid of $1.00, and that the minimum allowable bid is $1.25, which is equal to one bidding increment above the winning bid. Suppose then that Tom bids $2.00 for the item. Since Emily has already bid more than Tom, eBay will display that the current winner is Emily, with a bid of $2.25, which equals the second-highest bid ($2.00) plus the bid increment amount ($.25). Again, eBay will also display that the minimum allowable bid is $2.50, one bid increment above the winning bid. Suppose that Tom bids again, this time at $2.75. Again, since Emily’s bid is higher than Tom’s, eBay will display that the current winning bidder is Emily, with a bid of $3.00, which is equal to the second-highest bid ($2.75) plus the bid increment ($.25). eBay will also display that the minimum allowable bid is $3.25, one bidding increment above the current winning bid. Suppose Tom bids one more time, at $10.00. Since Tom’s bid is now higher than Emily’s, eBay will display that the current winning bidder is Tom, with a bid of $3.25, which is equal to the second-highest bid ($3.00) plus the bid increment ($.25). If Tom were to win the auction, he would have to pay the amount equal to the winning bid ($3.25), even though his previous bid was much larger than that.
Dutch Auctions
For Dutch Auctions, which are auctions of two or more identical items sold in one auction, each bidder enters both a bid and the number of items desired. Until the total number of items desired by all bidders equals the total number of items offered, bidders can bid any amount greater than or equal to the minimum bid. Once the total numbers of items desired by all bidders is greater than or equal to the total number offered, each bidder is required to bid one full bidding increment above the currently displayed winning bid. All winning bidders pay the same lowest winning bid.
The Dutch Auction format is scheduled to be discontinued in May 2009; statistically, it is not widely used, having been supplanted by other formats such as Fixed Price auctions.
Seller Ratings
In 2007, eBay began using detailed seller ratings with four different categories. When leaving feedback, buyers are asked to rate the seller in each of these categories with a score of one to five stars, with five being the highest rating and one the lowest. Unlike the overall feedback rating, these ratings are anonymous; neither sellers nor other users learn how individual buyers rated the seller. The listings of sellers with a rating of 4.3 or below in any of the four rating categories appear lower in search results. Power Sellers are required to have scores in each category above 4.5.
Profit and transactions
eBay generates revenue from a number of fees. The eBay fee system is quite complex; there are fees to list a product and fees when the product sells, plus several optional fees, all based on various factors and scales. The U.S.-based eBay.com takes $0.20 to $80 per listing and 5.25 percent or less of the final price (as of 2007). The UK based ebay.co.uk (ebay.co.uk offices) takes from GBP £0.15 to a maximum rate of GBP £3 per £100 for an ordinary listing and from 0.75 percent to 5.25 percent of the final price. In addition, eBay now owns the PayPal payment system which has fees of its own.
Under current U.S. law, a state cannot require sellers located outside the state to collect a sales tax, making deals more attractive to buyers. Although some state laws require purchasers to pay sales tax to their own states on out-of-state purchases, it is not a common practice. However, most sellers that operate as a full time business do follow state tax regulations on their eBay transactions.[citation needed] However for the tax called Value added tax (VAT), eBay requires sellers to include the VAT fees in their listing price and not as an add-on and thus eBay profits by collecting fees based on what governments tax for VAT.
The company’s current business strategy includes increasing international trade.[citation needed] eBay has already expanded to over two dozen countries including China and India. The only places where expansion failed were Taiwan and Japan, where Yahoo! had a head start, and New Zealand where TradeMe, owned by the Fairfax media group is the dominant online auction website.
A more recent strategy involves the company increasingly leveraging the relationship between the eBay auction site and PayPal: The impact of driving buyers and sellers to use PayPal means not only does eBay turn buyers into clients (as a pure auction venue its clients used to be predominantly sellers) but for each new PayPal registration it achieves via the eBay auction site it also earns offsite revenue when the resulting PayPal account is used in non-eBay transactions. In its Q1 2008 results, total payment volume via PayPal increased 17 percent, but off the eBay auction site it was up 61 percent.
For most listing categories, eBay sellers are permitted to offer a variety of payment systems such as Paypal, Paymate, ProPay, and Moneybookers
www.ebay.com