eBay took many years to shake-off its reputation as an iffy online car boot sale full of Del Boy Characters out to make a few bob. Now the stories of eBay fraud are limited to a low murmur, with the auction site finally winning the mainstream respectability it always craved: it is, according to Fortune, the fifth most admired company in the internet services and retailing sector.
Auction sellers may argue that eBay has salvaged its reputation by offloading liability for fraud onto them – the site’s Money Back Guarantee policy has led many sellers to claim that it’s too easy for fraudulent buyers to claim goods haven’t arrived and earn a refund from the site. Yet, there’s no sign of sellers deserting – live listings passed the one billion mark for the first time last year. But then where would sellers go?
eBay is as synonymous with online auctions as Google is with search.
eBay deserves credit for its parenting of PayPal. Bought for $1.5 billion in 2002, eBay turned PayPal into the site’s payments provider – an unpopular decision at the time, but one that has borne fruit. PayPal was again spun-off as a separate business last year, earning a valuation of $46.6 billion – more than 30 times the price eBay paid for it.
eBay behaves like users of its site – buying firms before selling them on for profit, It paid $2.5 billion for Skype in 2005. It failed to get users to communicate by phone but still managed to sell 70% of Skype to a cbnsortium for $1.9 billion; when Microsoft paid $8.5 billion for the service in 2011, eBay’s 30% stake converted into a cool $2.55 billion.
Nice work if you can get it and know where to find it.