welcome to watchmojo.com in today’s
business school bit we’ll be continuing
our series on successful companies and
successful startups and one of the
original names our synonymous with the
web was none other than ebay now ebay is
a very interesting case because it was
founded in nineteen ninety-five by a
computer programmer piya o media who was
a french iranian living in boston
realized was that the web would be
perfect for a global marketplace that
would match sellers and buyers from
everywhere from sydney to sarasota the
legend goes that he realized when he was
in Boston that the place to be for web
startups was actually San Francisco
rightfully so so he basically picked up
from Boston went to San Francisco and
establish ebay over in San Jose and the
legend goes that he realized that his
girlfriend who was a collector of pez
dispensers no longer had her trading
partners who were still left out on the
East Coast so lo and behold mr. o media
decided to go out and launch this
company called eBay this global
marketplace now like most legends that’s
not really true that was concocted
ebays PR agency in 1997 to basically put
a good spin an altruistic sort of spin
on the success story that was eBay while
the legend might not be true the fact of
the matter is that eBay as a business
model is arguably one of the best ever
developed a couple years ago I was
working on a business deal with the
company out of Utah called overstock and
this isn’t really confidential it’s just
an interesting little anecdote and as I
was trying to understand their business
model a bit more I said well let me get
this straight you guys are essentially
trying to compete an ebay space I was
told immediately no no no we don’t
really want to compete with ebay because
ebay has got the best business model the
reason is very simple it collects a cut
of all transactions made on the website
and it carries absolutely no inventory
because the transactions are made
between two people so low overhead good
margins essentially they have eighty
seventy percent profit margins which
makes investors very happy now
throughout the years ebay has slowed
down a bit mainly because while
transactions are still very much a
high-growth area on the web ebay never
really positioned itself to take
advantage from online advertising which
is an area that is growing like wildfire
these days so eva has gone out over the
past few years and made some very key
acquisitions one of them being paypal a
very popular payment processing that a
lot of individuals and some merchants
use and recently ebay went out and
acquired another company that we will be
profiling in our series called skype
which is essentially a p2p communication
tool that is very very successful they
pay two billion dollars for skype once
again some people say that they overpaid
but the bottom line is that with ebays
coffers they could afford to essentially
by growth in the form of the next
generation of communication so eBay is
one of the many many examples of a
company that launched over 10 years ago
that continues to be a force to be
reckoned with both in offline and online
commerce that’s been this week’s
Business School bit eBay
watchmojo calm
business school bit we’ll be continuing
our series on successful companies and
successful startups and one of the
original names our synonymous with the
web was none other than ebay now ebay is
a very interesting case because it was
founded in nineteen ninety-five by a
computer programmer piya o media who was
a french iranian living in boston
realized was that the web would be
perfect for a global marketplace that
would match sellers and buyers from
everywhere from sydney to sarasota the
legend goes that he realized when he was
in Boston that the place to be for web
startups was actually San Francisco
rightfully so so he basically picked up
from Boston went to San Francisco and
establish ebay over in San Jose and the
legend goes that he realized that his
girlfriend who was a collector of pez
dispensers no longer had her trading
partners who were still left out on the
East Coast so lo and behold mr. o media
decided to go out and launch this
company called eBay this global
marketplace now like most legends that’s
not really true that was concocted
ebays PR agency in 1997 to basically put
a good spin an altruistic sort of spin
on the success story that was eBay while
the legend might not be true the fact of
the matter is that eBay as a business
model is arguably one of the best ever
developed a couple years ago I was
working on a business deal with the
company out of Utah called overstock and
this isn’t really confidential it’s just
an interesting little anecdote and as I
was trying to understand their business
model a bit more I said well let me get
this straight you guys are essentially
trying to compete an ebay space I was
told immediately no no no we don’t
really want to compete with ebay because
ebay has got the best business model the
reason is very simple it collects a cut
of all transactions made on the website
and it carries absolutely no inventory
because the transactions are made
between two people so low overhead good
margins essentially they have eighty
seventy percent profit margins which
makes investors very happy now
throughout the years ebay has slowed
down a bit mainly because while
transactions are still very much a
high-growth area on the web ebay never
really positioned itself to take
advantage from online advertising which
is an area that is growing like wildfire
these days so eva has gone out over the
past few years and made some very key
acquisitions one of them being paypal a
very popular payment processing that a
lot of individuals and some merchants
use and recently ebay went out and
acquired another company that we will be
profiling in our series called skype
which is essentially a p2p communication
tool that is very very successful they
pay two billion dollars for skype once
again some people say that they overpaid
but the bottom line is that with ebays
coffers they could afford to essentially
by growth in the form of the next
generation of communication so eBay is
one of the many many examples of a
company that launched over 10 years ago
that continues to be a force to be
reckoned with both in offline and online
commerce that’s been this week’s
Business School bit eBay
watchmojo calm
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