The Perfect Store: Inside Ebay

“The financial empowerment you can bring people by giving them access to an efficient market is tremendous,” Omidyar says. “That's what it was all about.”

EBay outperformed its competitors, Whitman says, because it provided a better user experience. “The reason we were so successful against Yahoo! and Amazon was clearly focus,” she says. “This was our only business.” Whitman liked to say that every morning, she and her staff woke up thinking only about how to make online auctions better, something eB

Storefronts would allow sellers almost as much autonomy as they had on their own websites. But by tapping into eBay's millions of registered users, they could solve the problem that had doomed so many small e-commerce sites—finding customers.

EBay's success, as Omidyar liked to point out, was due in large part to the fact that sellers went where all the buyers were, and buyers went where all the sellers were. But if aggregators like Bidder's Edge caught on, buyers would no longer go to eBay—they would go to an aggregator. Sellers could put their items up for sale on any site, including

“The ability of big business to target and effectively market their product creates a playing field that is no longer level,”

With millions of buyers and sellers able to participate in every transaction, market flaws that allowed goods to sell for more or less than they should have were being corrected. EBay was now a price-setting mechanism—a stock market for everyday goods.

“Brands are quick-drying cement,” she liked to say. Amazon had hardened in the public's mind as a fixed-price book, music, and video destination—not a place to go for auctions.

Young had become one of thousands of Americans—the New York Times would later put the number at 75,000—running businesses entirely on eBay. EBay had empowered her in just the way Omidyar had hoped when he created AuctionWeb. It enabled her to start a business in her own small town, selling to customers around the country and the world. It also gave

Skoll made some initial inquiries into how it could be done, from handing out shares to eBay's biggest buyers and sellers, to creating a mechanism for the entire eBay community to buy pre-IPO stock. But the idea ran into resistance from the investment bankers and lawyers. The investment bankers had selfish reasons for opposing the plan. Pre-IPO sha