eBay: An investor’s guide to the world’s largest marketplace


Nov. 20 2020, Updated 2:49 p.m. ET

eBay (EBAY) is a global commerce and payments company, providing a robust platform where merchants of all sizes can compete and win. Founded in 1995, the San Jose, California-based connects millions of buyers and sellers and enabled $212 billion of commerce volume in 2013. After being relatively flat in 2013, company’s shares rose more than 9% last month after its 4Q earnings results but more so due to activist investor Carl Icahn acquiring a 0.82% stake in the company.

For the full year, eBay’s enabled commerce volume (ECV) increased 21%, accelerating two points to $212 billion. ECV is the total commerce and payment volume that runs through all the company’s platforms.

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Initially viewed as an an online auction house, eBay now considers itself as the world’s largest online marketplace. Under CEO John Donahoe, who took over from Meg Whitman in 2009, eBay embarked on a three-year turnaround strategy in 2009 and transitioned from an auctions site to an e-commerce and mobile payments business. Whether online, through the mobile channel, or in the physical world, the company is primarily a transaction-based business that generates revenue from the transactions and payments that it successfully enables. The company enables commerce through three reportable segments: Marketplaces, Payments, and Enterprise.


This segment includes the core global e-commerce platform, eBay.com and other localized sites around the world, such as eBay.de and eBay.co.uk. Marketplaces also has related commerce platforms, including vertical shopping websites, such as StubHub, the world’s largest ticket marketplace; and classifieds websites, such as Marktplaats.nl and mobile.de. The company has also built specialized experiences for certain vertical formats, such as Daily Deals, Fashion, Motors (vehicles, parts, and accessories) and Electronics. This segment also includes an advertising services business. As of December 31, 2013, the Marketplaces segment had more than 128 million active users and more than 550 million listings globally.


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This segment includes core payments brand PayPal, which enables individuals and businesses to securely, easily, and quickly send and receive payments online and through a broad range of mobile devices in approximately 193 markets worldwide and in 26 currencies as of December 31, 2013. eBay has a related consumer credit business, Bill Me Later, which enables U.S. merchants to offer, and U.S. consumers to obtain, credit at the point of sale for e-commerce and mobile transactions through Bill Me Later’s relationship with one or more chartered financial institutions. The Payments segment had 143 million active registered accounts as of December 31, 2013. U.S. consumers may be offered an opportunity to defer payments under some promotional arrangements offered on select merchant sites. Interest on such purchases can be deferred for up to 18 months.

The Enterprise segment was previously known as GSI Commerce, Inc., or GSI. Enterprise operates three primary lines of business: commerce technologies, omnichannel operations and marketing solutions.

In addition, eBay also has created an open source platform that provides software developers and merchants access to its applications programming interfaces, or APIs, to develop software and solutions for commerce.

Early history

eBay was founded as AuctionWeb in 1995 by French-born Iranian computer programmer Pierre Omidyar. 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 site saw phenomenal growth; in January 1997, the site hosted 2,000,000 auctions, compared with 250,000 during the whole of 1996. The company officially changed the name of its service from AuctionWeb to eBay in September 1997. In 1997, the company received $6.7 million in funding from the venture capital firm Benchmark Capital. When Meg Whitman was hired as eBay President and CEO in March 1998, the company had 30 employees, half a million users and revenues of $4.7 million in the U.S. eBay went public on September 21, 1998, and both Omidyar and Skoll became instant billionaires. eBay’s target share price was $18 but went up to $53.50 on the first day of trading.

To know more on investor’s takeaways, see Must-know: Why Carl Icahn bought $1 billion more in Apple shares.


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