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In his responding email, the buyer explained: "I'm a collector of broken laser pointers." The frequently repeated story that e Bay was founded to help Omidyar's fiancée trade Pez candy dispensers was fabricated by a public relations manager, Mary Lou Song, in 1997 to interest the media, which were not interested in the company's previous explanation about wanting to create a "perfect market".

Reportedly, e Bay was simply a side hobby for Omidyar until his Internet service provider informed him he would need to upgrade to a business account due to the high volume of traffic to his website.

The company officially changed the name of its service from Auction Web to e Bay in September 1997.

Originally, the site belonged to Echo Bay Technology Group, Omidyar's consulting firm.

The website is free to use for buyers, but sellers are charged fees for listing items after a limited number of free listings, and again when those items are sold.

In addition to its original auction-style sales, the website has since evolved and expanded to include "Buy It Now" shopping; shopping by UPC, ISBN, or other kind of SKU number (via Half.com); online classified advertisements (via Kijiji or e Bay Classifieds); online event ticket trading (via Stub Hub); and other services.

The new model is more transparent and is based on category-level base commission rates with bonuses available for referring new and reactivated buyers.Omidyar had tried to register the domain name echobay.com, but found it already taken by the Echo Bay Mines, a gold mining company, By early 2008, the company had expanded worldwide, counting hundreds of millions of registered users as well as 15,000 employees and revenues of almost .7 billion.After nearly ten years at e Bay, Whitman decided to enter politics.In October 2009, e Bay changed to an affiliate payout system that it calls Quality Click Pricing, in which affiliates are paid an amount determined by an undisclosed algorithm.The total earnings amount is then divided by the number of clicks the affiliate sent to e Bay and is reported as Earnings Per Click, or EPC.

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