During the first years after eBay's appearance, several other online auction sites started appearing. Some followed a “business-to-business” approach. Some focused on “business-to-consumer” auctions. But eBay ran away with the “person-to-person” auction market and left its other competitors gaping — and gasping — at its numbers.

On its third anniversary, eBay issued a press release on September 15, 1998, acknowledging the pending emergence of a new competitor, Yahoo! Auctions. The release also noted pointedly that eBay now had more than one million registered users, with some 700,000 available items and about 70,000 new items being listed for auction each day. Meg Whitman, eBay's chief executive officer, cautioned Yahoo! and other would-be competitors that “any company entering this space must understand the level of personalized support and attention the online person-to-person trading community demands.”

This was not simply self-defensive posturing by eBay. Almost from its outset, eBay had zeroed in on four key factors that would drive its success: customer support, trust and safety, community, and choice.

Customer Support

By 1998, as its new competitors tried to gain traction, eBay already was running a twenty-four-hour/seven-day-a-week customer support department and hosting two live public forums. There, eBay support personnel fielded questions from eBay users and posted the answers so all other users could learn from them. Ms. Whitman stated, “eBay takes care of its registered users.” It was not an overblown boast. It was a warning to would-be competitors that they would have to do better to overtake eBay's huge lead.

Trust and Safety

It takes a leap of faith and trust to buy items sight unseen from distant strangers. Early adopters of the online auction concept were rewarded with a remarkably convenient way to buy and sell. Unfortunately, fraudsters showed up, too, and began taking buyers' money but shipping goods that did not meet the online descriptions. Sometimes, nothing was shipped at all. Buyers could not always trust sellers, and honest sellers sometimes ran into dishonest buyers who schemed ways to get merchandise for free or unwarranted refunds.

To help fight this trend, eBay pioneered the Feedback Forum, where buyers and sellers can post comments — good, bad, or neutral — about their dealings with each other. This feature, along with the ability to block or cancel bids from questionable buyers, quickly leveled the playing field. Today, on eBay and many other online auction sites, a strongly positive feedback score is a precious commodity. Good sellers and buyers work very hard to keep their ratings high. The comments posted for their transactions are available for all to read. Fraud still happens. But the instances are rare.

Community

In 1998, Meg Whitman told Business Week magazine that eBay's management did not set the direction of the multibillion-dollar company. The “community” of buyers and sellers on eBay determines where it goes next. She called eBay both a “self-regulating marketplace” and “an economy” where different categories of goods go from hot to cold and back to hot again in constantly changing marketplace cycles, driven by eBay's massive and steadily growing membership.

Choice

Both eBay's creator and its early management team knew that the site's growth would be driven by the number of auction categories it could offer. The more choices eBay could make available, the more buyers and sellers would show up and draw other buyers and sellers. By its third year of operation, 1998, eBay had swelled to more than 700,000 concurrent auctions, and more than 70,000 new items were being added each day.

Seven years later, in mid-2005, eBay was reporting a record 440.1 million auction item listings, just in one quarter, and it had more than 157 million confirmed registered users. Many thousands of new auction listings were being added each second, and eBay was expanding its overseas markets to include China's burgeoning economy and massive population.