Inside The Attic of e


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Omidyar wrote some code and over Labor Day weekend of 1995 launched what he called AuctionWeb, which was supported on the $30-a-month Internet service provider he was hooked up to from home. (The site's domain name was and eBay was the name that stuck.) There were no Pez dispensers--that came later--but there were listings for a whole lot of computer hardware. eBay started out free, but it quickly attracted so much traffic that Omidyar's Internet service upped his monthly bill to $250. Now that it was costing him real money, Omidyar decided to start charging. He concocted a fee scale similar to the one eBay uses today: a nominal fee for listing an item (10[cents] back then, as little as 25[cents] now) and a percent of the final sale price.

The payments that arrived with Omidyar's daily mail were small--in some cases dimes and nickels taped to index cards. But those little payments were coming in piles. eBay took in $1,000 the first month, more than it cost to run. Omidyar really knew he was onto something when he put up a listing for a broken $30 laser pointer that he was about to throw out. He fully disclosed that it didn't work--even with new batteries--and started it at $1. Inexplicably, a bidding war ensued, and someone ended up taking it off his hands for $14. Meanwhile, the site's revenues kept doubling: they were $2,500 the second month, then $5,000, then $10,000. Omidyar eventually had another insight. "I said O.K., I've got a hobby that's making me more money than my day job," he recalls. "So it might be time to quit the day job."

As eBay's only full-time employee, Omidyar soon found himself thrust into a new and unwanted role: grievance officer. Buyers and sellers with complaints about each other were e-mailing him personally and asking him to step in. Omidyar urged them to work things out amicably between themselves. But if eBayers really had to gripe, he decided, they should do it publicly on the site. "I wanted to reinforce the notion that if you're going to bring a complaint about someone, do it out in the open," says Omidyar. "You can't come running to Daddy." He had one other proviso: if traders are going to complain about people they don't like, they should be willing to say something nice about people they do.

That was the genesis of the Feedback Forum, one of eBay's most distinctive and popular features. Omidyar kicked it off with a Founder's Letter in February 1996 in which he laid out a philosophy that still guides eBay: that people are basically good, that they make mistakes, and that they should be given the benefit of the doubt. "I was afraid it would turn into just a gripe forum, but as I watched it develop, I was amazed to realize that people enjoy giving praise." In fact the feedback eBayers posted about one another was overwhelmingly positive.

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