Things just keep getting better for giant online flea market

It is just a typical day on the eBay trading platform with 25 million items listed for auction and users trading $1,000 (€845…

It is just a typical day on the eBay trading platform with 25 million items listed for auction and users trading $1,000 (€845) worth of goods every second on the site.

Featured items on the world's biggest online marketplace this week included a five-acre ranch in Colorado, a new diet pill and a vintage copy of James Joyce's book Dubliners, which was printed in 1957.

Ebay's 105 million registered-users can bid for these items anytime day or night, in the process taking part in a gigantic flea market spanning 28 countries.

The firm generates cash by charging sellers a fee for listing products on the site and taking a commission on every sale. Ebay acts purely as a middleman in the sale process, with the seller responsible for delivery and the buyer responsible for payment.

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The firm, which was founded by French-born computer scientist Mr Pierre Omidyar in 1995, is one of a handful of big dotcom success stories. In less than a decade, it has grown into an internet giant, generating $8 billion trade in the first quarter.

And things just keep getting better for the Californian firm. At its last results, eBay stunned analysts by raising 2004 revenue targets by $150 million. And with internet use increasing across the globe, further growth is likely.

For Ms Meg Whitman, eBay president and chief executive, it is the vast community of buyers and sellers that is the secret of the firm's success, enabling it to generate profits worth more than $200 million in the first quarter.

"First and foremost, it is the community of users that have built eBay. We listen to them - we have built features and functionality to suit what they want," says Ms Whitman, who makes a point of responding to as many customer emails as possible to keep in touch with the community.

"They pioneer new categories for us and if they are successful then we are successful," says Ms Whitman who joined eBay in 1998 when the firm had 30 staff, and is visiting Ireland for the first time to open a new eBay office.

Back then, she was a successful general manager of the pre-school division of Hasbro, responsible for kids' brands such as Playskool and Mr Potato Head, and she initially rejected the eBay offer. But, after speaking to eBay users, she agreed to take the job, which has made her one of the highest-paid and most sought-after chief executives in the US.

A Harvard business school graduate, Ms Whitman built a successful career in what she calls the "land-based world" at firms such as Disney and Bain & Company before jumping on the internet bandwagon that was just taking off in the late-1990s. And she quickly brought her traditional business background to bear on the small start-up firm.

"Interestingly, I would say building a brand in the online world is more similar than different to building a land-based brand," she says. "You must first of all concentrate on the experience that the user has of your brand. The second thing is to make sure your communications are consistent with what you want your brand to stand for.

"Whether it is PR, marketing, online marketing or corporate communications, consistency of message is important," says Ms Whitman.

People value their reputations on eBay just as they do in the land-based world. This really does create a sense of community among buyers and sellers, according to Ms Whitman, who has introduced a range of online discussion forums such as the eBay cafe and pub to the website.

"There you can discuss your most recent beefs about eBay and it is a wide-open discussion board controlled by users. We have other community events such as the eBay university."

The eBay university is a series of company-sponsored tutorials held in cities across the US and in their new international markets. They can be taken in person or via the Web, and give eBay users tips on how to use the site better.

This growing sense of community is becoming more important as more people begin trading on the eBay platform. And, increasingly, users are talking online and then arranging meetings, such as going to the pub or going on vacation together, says Ms Whitman.

Despite having a far more traditional business background than the bosses of other dotcom giants such as Google or Amazon, Ms Whitman champions the Web.

"In less than a decade, the internet has fundamentally changed our lives. The way we communicate using email and the way we shop is different ... Everyone is now using the internet - even my 83-year-old mother is surfing it every day."

Under Ms Whitman's stewardship, eBay has rewritten the rule books for traditional retailers in the US, and eBay is now the primary distribution platform for roughly 430,000 individuals and small businesses within the US.

"Ebay in any country in the world is among the best places to start a new business. Because you can start small, you don't have to worry about marketing as the traffic comes directly to you. You don't have to worry about a warehouse or a store front.

"Lots of people start in their spare bedroom and then expand. Many have now given up their jobs to start a business on eBay."

Some of these businesses are generating $150,000 sales on eBay every month and have been awarded the title of "Titanium PowerSeller" by the auction site.

Such PowerSellers are offered a range of benefits by eBay such as free banner adverts and VIP admission to eBay's live events.

A new phenomenon in recent months has been the creation of physical shops in the US based around eBay. AuctionDrop and i-soldit are two franchise-style operations that encourage customers to leave their unwanted goods with them to be sold on eBay. They handle all shipping, payment, and customer service.

Ms Whitman says eBay is unlikely to set up its own shops in the foreseeable future. "We think our efforts are better focused around the virtual trading platform and helping firms to grow around it," she says.

But small businesses and start- ups are not the only firms that are using eBay to sell their product. Big corporations, such as Dell and Dixons, are also using its platform to shift excess stock. It started about three years ago in the US but is now becoming more prominent in international eBay markets, says Ms Whitman.

"At first, some of the small sellers are concerned, but then they realise that anything that enriches the trading platform only encourages more people to come and look for something."

This network-effect enriches eBay but also the community of users who buy and sell on it.

"We really want eBay to be a level playing field where everyone has an equal chance of success. So everyone pays the same fees and everyone has a chance that their item can be listed at the top of the page," she says.

Since cracking the US market over the past three years by outperforming rivals such as Yahoo Auctions and Amazon.com, eBay is now firmly focused on winning the war in Europe and Asia.

Non-US revenue now accounts for 44 per cent of eBay's turnover, but Ms Whitman expects it to overtake the US in the future.

"We think Europe alone will be bigger than the US," she says. "I believe that trading is in the human DNA. People love to start businesses and make personal connections. So the proposition is as relevant in Germany as it is in China or Argentina."

Ebay's new customer-support centre and its PayPal payments subsidiary in Dublin will play a crucial role in supporting the firm's expansion in Europe.

About 800 staff will work at its Irish operations in customer support, finance, fraud detection and senior management roles. It is the high calibre of skilled staff in Dublin that won the project for IDA Ireland, says Ms Whitman, who has announced a further 500 new jobs for its Dublin operation.

"We are looking for people who have degrees from a college or university, maybe have a bit of work experience, who are technically savvy, who like the internet.But, first and foremost, people who use eBay and Paypal."

Meanwhile, Ms Whitman - who last year was accorded the title of the second most-influential US businesswoman by Fortune magazine - is attracting attention as a potential future head of troubled media organisation Disney.

Asked if she would consider a move to the high-profile job, she replies with a smile: "I'm pretty happy at eBay right now. It is an awesome firm with huge growth potential so I am happy here."

But the rumours will continue and it is likely the next challenge for eBay will be retaining a chief executive who quietly steered it through the internet bubble to establish itself as an e-commerce giant with no equal.