On September 3, 1995, computer programmer Pierre Omidyar launched AuctionWeb from his home in San Jose, California, over the Labor Day weekend. It was a side project, not a company. He wrote the code himself. Two years later it was renamed eBay after his consulting firm, Echo Bay Technology Group, whose preferred domain, echobay.com, was already held by a gold mining company.
The first item sold was a broken laser pointer. It went for 14.83 dollars. Omidyar e-mailed the winning bidder to check that he had understood the item did not work, and got back the reply that the buyer collected broken laser pointers. That exchange is why the story is still told: an open listing page found a price for an object with no conventional market at all.
The design choice that mattered most was the feedback forum added in 1997, which let buyers and sellers rate one another after every transaction so that an accumulated score became the thing people traded on in a market where nobody met in person. It solved the problem that an anonymous marketplace had no way to punish a cheat.
The company took a share of each sale and never had to hold inventory, so it grew without the capital costs that broke other internet retailers of the 1990s. Meg Whitman became chief executive in 1998. It went public that September.