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Last Updated: Friday, 16 May, 2003, 16:07 GMT 17:07 UK
eBay: Bidding for success
By Andrew Walker
BBC News profiles unit

As a major survivor of the dot.com meltdown, the internet auction house, eBay, is going from strength to strength. But could the spectre of fraudulent users cloud what should be a glittering future?

eBay: What next for the phenomenally successful online auction house?
What links the following? A human skeleton, a packet allegedly containing a flu virus caught from Sir Paul McCartney, a human soul and Kurt Cobain's childhood home.

No? Well, they have all been put up for auction on the internet's very own car-boot sale, eBay.

While many other dot.com companies, like the fashion e-tailer Boo, Etoys and the health food company, clickmango, went to that great superhighway in the sky, eBay has soldiered on.

The dot.com war has been long and hard and there have been few survivors. But for those still standing today, most notably eBay and Amazon, the good times have returned.

Beanie soft toys
Beanies paved the way to success
With an estimated 85% share of the online auction market, 69 million registered users in 27 countries worldwide and profits of $250m in the past year, the company is now worth more than Gap and the Sears department store empire combined.

Dave Wilby, editor of Internet Magazine, told BBC News Online: "eBay is awesome as a force online. The idea of an auction house is perfectly suited to the internet as a medium.

"People who would never go to an auction will use eBay. They can buy and sell at work, at their desk or at home."

From small beginnings...

The company, which has up to 16 million items for sale at any one time, was founded in 1995 in California by a French-Iranian computer programmer, Pierre Omidyar.

He built a small website to advertise a broken-down laser printer. Someone splashed out 15 bucks on it and the seed of the eBay phenomenon was planted.

eBay is awesome as a force online
Dave Wilby, editor of Internet Magazine
Omidyar's original, slightly hippyish, ethos still steers the company. There are community members - not users - and feedback ratings, of both sellers and buyers, are given by those they deal with. eBay makes its money by taking a cut of every transaction it facilitates.

The company, originally called AuctionWeb, was re-launched in 1997, just in time to capitalise on the Beanie Baby craze of the following year.

Interest in collecting the soft toys reached fever pitch and eBay was the perfect place to buy, sell and generally obsess about Beanie Babies.

Bogus sales

Omidyar took a backseat three years ago to enjoy the good life - and philanthropy - in France and the US, leaving day-to-day control in the hands of Meg Whitman, formerly of Procter & Gamble, Disney and the company behind Mr Potato Head.

BBC Television's antiques expert, David Dickinson
David Dickinson, eat your heart out
With 5% of the company's stock, Whitman is notionally worth about $900m in her own right and, on paper at least, is one of the world's wealthiest women.

Her strategy, to reposition the company from being primarily a site for collectors to one featuring a wide range of often big ticket items, seems to be paying off.

But not everything in the eBay garden is rosy. In February, debris from the recently-destroyed Columbia space shuttle turned up on the eBay site, before being promptly removed by the company.

A book is sold every four seconds, a laptop every 30 seconds and a motorbike every 18 minutes
eBay spokesperson
And eBay has recently had to fight off challenges from its rivals Amazon, Yahoo and Lycos.

As well as this there have been increasing reports of fraud, the selling of stolen goods and ticket touting by some users. Many of these criminals use multiple false IDs, making them difficult to trace.

"You have the same inherent problems as offline auctions," says Dave Wilby. "Most users are not experts in the goods they are buying or selling, and there are no guarantees about the goods which are being sold."

Buyer beware

Problems with internet auctions in general have prompted the US Federal Trade Commission to produce detailed advice for buyers and sellers.

Among other things, the commission says buyers should understand the auction site and its rules, find out about the seller and save all information about the transaction.

A young man surfing the internet at home
Buy from home but beware of fraud
For its part, eBay understands the nature of the problem and says it is taking steps to actively combat it.

"It is an incredibly safe place to trade with fewer than 0.01% of transactions resulting in a confirmed case of fraud," a company spokesperson told BBC News Online.

But fraud can and does occur when trading online and those caught out are covered by the company's Buyer Protection Programme, which reimburses victims of fraud up to 120.

There is no doubt that, as long as buyers are aware of the potential pitfalls, the eBay experience can be rewarding for all concerned.

Whether you fancy becoming the proud owner of a used glass eye, a 1986 UK pound coin - offers above 3.08, please - or a $4.9m Gulfstream jet, this is the place to get it.






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