The story of the online auction monopolist eBay

eBay. A firm which in 2011 had a net income of more than 3.2 billion. A website which almost everyone has heard of.

In an article I recently posted which explored whether there is really that much diversity online, I noted how eBay owned four websites in Alexa’s top 100 ranking – eBay.com, eBay.de, eBay.co.uk and PayPal.com.

There is no doubt that eBay holds a monopoly on the online auction market. But how did it get there? On September the 2nd 1995, eBay didn’t exist. One day later on September the 3rd it did, and after just over 3 years and 6 months, the site made its first major acquisition, the auction house Butterfield & Butterfield which it purchased for the price of $260,000,000 USD. A spend of 260 million after less than four years trading? eBay’s rapid early growth set it up to become a global internet phenomenon.

eBay kept buying up smaller firms, but not spending nearly as much as it had on its first purchase until mid-2000 when it forked out 318 million (USD) to buy Half.com. This was an amazing investment at the time, as even today it stands as eBay’s 6th largest ever investment, and it has made hundreds.

PayPal's logoThat said, the purchase of Half.com was to prove small fry to PayPal, which the now giant auctioneer purchased 2 years later in July 2002 for an astounding $1.5 billion. PayPal integration with eBay is (in my opinion) one of its greatest ever business moves. eBay is now able to seamlessly integrate processing credit card payments without having to pay millions every year to third parties. Fees eBay would have lost to PayPal are now extra revenues.

eBay wasn’t done though, going on to make the biggest purchase in its history, by buying Skype Limited for more than $2.5 billion. The auction site purchased the Luxembourg based company in 2005, only to sell 70% of its shares in 2009 for $2 billion – a healthy profit. Later, in May 2011, Microsoft bought Skype in its entirety for $8.5 billion, an investment which I am not sure it will see great returns on in the near future at least.

Skype's LogoeBay started to turn into a Microsoft and a Google. It was fast becoming an internet giant which bought up pretty much anything it could see turning it a bigger profit, or anything which posed a threat – in terms of competition. Just some of its purchases include StumbleUpon, Bill Me Later and Magento, the ecommerce web application.

Many say that eBay is one of the most notable successes the dot-com bubble, and I have to agree. Without the internet, eBay would be nowhere. It got in early and grew from the start, giving its competition very little chance.

Like it or hate it, eBay is an internet phenomenon, and also an internet giant. In my opinion it is successful down to luck: a good idea at the right time. Had it been thought of a year later, eBay might not be what it is today, had the internet not really taken off as it has and still is doing, eBay would again might not be where it is today.

What are your views on eBay? Were you aware of how much it owns and how rich it is? Is its monopoly unfair, or don’t you mind?

Three blog contest winners announced

On the 10th of July, we launched our second competition, which saw three blogs (Technology Bloggers, Blogging Fever and TechAtLast) join together, to give you, the readers of Technology Bloggers the chance to win one of three $50 USD prizes.

The competition was a huge success, with a total of 6,590 entries!

I had initially set a personal target of 10,000 entries, however soon realised this was probably a little out of reach. I changed the target to 5,000 entries which I thought we could just about achieve, however we smashed this, gaining close to 7,000!

Entrants could achieve a total of 59 entries, and then a further 5 entries every day, were they to revisit and share the giveaway again.

In total 342 people took part in the competition, which works out at an average of 19 (19.269) entries per person.

On Saturday I used the Rafflecopter widget to randomly select the winners. The winners were:

  • Asha Marie Pena – winning with her entry “Follow @TecBloggers on Twitter”
  • Peter Lee – winning with her entry “Follow @Blogging_Fever on Twitter”
  • Arjun Yadav – winning with her entry “Subscribe to Blogging Fever Via Email”

Asha, Peter and Arjun all won a $50 USD prize – or equivalent amount – to be paid via PayPal.

Technology Bloggers three blog $150 USD giveaway winnersAsha’s winnings are to be paid by Olawale Daniel and Arjun’s are to0 be paid by Alan Tay.

I was left with Peter, and I have already sent him his winnings – I am unsure whether Alan and Olawale have yet.

Here is what Peter had to say:

“Dear TechnologyBloggers.org, BloggingFever.com and TechAtLast.com,

Congrats to you all for doing such a great contest… it was very well done (especially since all of you are from different corners of the world), easy to enter and I enjoyed it very much.

It is such a pleasant surprise to hear that I am one of the contest winner! I joined the contest because it was organized by my fellow blogging friends, Christopher and Alan. I never thought that I would be one of the lucky winners and become $50 richer. For that, I thank you and keep the contest coming! 🙂

Best wishes,
Peter Lee”

One happy customer 🙂

It is good to see that people from our blogs that won the contest. The loyal readers/subscribers among you will probably recognise Peter Lee. He is a regular reader and often comments. He also reads Alan’s blogs and has his own, called Computer How To Guide. Recognise his avatar?

Peter Lee's Avatar

Peter’s Avatar

Arjun is also a member of the Technology Bloggers community. Arjun first commented on my article about the online profile maker About.Me. He has been a loyal reader ever since, and occasionally drops a comment if he has something to say. Another very worthy winner.

As for Asha, I am unsure how she found out about the contest, maybe she reads Alan’s blog, or maybe she found us on a contest site, or via social media. She could well be a reader who just chooses to lurk, rather than be one who comments. Who knows.

Congratulations to the winners, and thank you very much to everyone who entered, I hope you enjoyed the contest.

Watch this space, as maybe soon we will have another contest on the way…