On September 24, 1998, Ebay held its IPO at $18 per share, reaching $53 per share in its first day and making founder Pierre Omidyar and president Jeffrey Skoll instant billionaires. Ebay’s first annual report listed the company’s dependence on the continued strength of the Beanie Baby market as a risk factor. Needless to say, Ebay overcame both the Beanie Baby bubble bursting and the dotcom bubble bursting, coming out on the other side as one of the few survivors of the dotcom era.
Ebay’s meteoric growth in 1998
Ebay gained a big boost by the popularity of Beanie Babies, a brand of stuffed toy that had been on the market since 1994. When its maker started restricting production and retiring characters after a certain period of time, they turned into a popular fad.
Reselling Beanie Babies became a big business. And Ebay was a convenient place to resell them. Conveniently, Ebay opened up for business right around the time Beanie Babies became the hot new collectible.
Beanie Babies accounted for 10 percent of Ebay’s sales in the early days. When the craze started declining in 1999, Ebay had a problem.
But fortunately, you could sell just about anything on Ebay, and there was plenty of growth left in the Internet in 1999. Half the US population still wasn’t online. So Ebay enjoyed steady revenue from people discovering the Internet for the first time, finding out about Ebay, and finding out they could buy whatever oddball thing their heart desired that they couldn’t find anywhere else.
Emerging as a dotcom survivor
Even before the dotcom bust, Ebay was widely considered one of the four safest dotcom investments, alongside Amazon, AOL, and Yahoo. It wasn’t as big as the other three. But it had steady traffic and arguably the highest profit margins of the three. The brilliance of its business model was that it didn’t have to hold any inventory and it didn’t have to bother with logistics. Its sellers held the inventory and arranged the shipping. Ebay just had to provide reliable hosting and make sure the purchaser got what they paid for.
Ebay didn’t end up as big as Amazon, and it didn’t rise to the heights AOL did, but it didn’t fall like AOL or Yahoo either. In 2024, it had $10 billion in revenue and $1.98 billion in profits, against $5.16 billion in equity and $19.4 billion in total assets. It employed 11,500 people. In 2025, it had $11.1 billion in revenue and $2 billion in profits against $4.8 billion in equity, $17.6 billion in total assets, and $750 million in debt.
In 2003, Fortune listed Ebay as the 8th fastest growing company. By 2006, it had cracked the Fortune 500, landing at number 458. Ebay’s growth paralleled the growth of the Internet, so Ebay lost its shine as the number of new Internet subscribers tailed off, bringing down the number of new Ebay users along with it. Investors punished its stock once it was clear Ebay’s rocket ride was over.
Comparison with Microsoft and other tech startups
Ebay’s status as a dotcom survivor makes it a rare bird. It didn’t eclipse Microsoft in size like Amazon or Google did, but reaching the Fortune 500 and maintaining a position on it is an achievement not many other dotcoms attained. It emerged as a steady performer with a sustainable business model and good name recognition.
One of the things that fueled the dotcom era was a previous tech boom that happened around 1986. That year saw Microsoft, Oracle, Adobe, Sun Microsystems, and Silicon Graphics Inc. going public.
While Ebay didn’t reach Microsoft or Oracle heights, it did outperform Sun and SGI, two other glitzy 1986 tech IPOs. Sun lasted 28 years before selling out to Oracle in 2010. Silicon Graphics also lasted 28 years, going into Chapter 11 bankruptcy in 2009 and selling most of its assets to Rackable Systems, who took on the Silicon Graphics name. Ebay is now 31 years old and still profitable.
David Farquhar is a computer security professional, entrepreneur, and author. He has written professionally about computers since 1991, so he was writing about retro computers when they were still new. He has been working in IT professionally since 1994 and has specialized in vulnerability management since 2013. He holds Security+ and CISSP certifications. Today he blogs five times a week, mostly about retro computers and retro gaming covering the time period from 1975 to 2000.