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Wednesday, March 4, 2015

eBay


From Wikipedia, the free encyclopedia
 
eBay Inc.
EBay logo.svg
Screenshot of eBay homepage.png
The current eBay logo and homepage
Type Public
Traded as NASDAQEBAY
NASDAQ-100 Component
S&P 500 Component
Founded September 3, 1995 (1995-09-03)
Headquarters eBay Inc.
Attn: Legal - Global Privacy Practices
2145 Hamilton Avenue
San Jose, CA 95125
United States
Area served Worldwide
Founder(s) Pierre Omidyar
Key people
Industry Internet
Products eBayClassifieds, electronic commerce, Gumtree, Kijiji, online auction hosting, PayPal, iBazar, GittiGidiyor
Services Online shopping
Revenue Increase US$16.05 billion (2013)[1]
Operating income Increase US$03.37 billion (2013)[1]
Net income Increase US$02.86 billion (2013)[1]
Total assets Increase US$41.49 billion (2013)[1]
Total equity Increase US$23.65 billion (2013)[1]
Employees 33,500 (December 2013)[2]
Slogan(s) "World's Online Marketplace."
"Connecting buyers and sellers globally."
"Whatever it is, you can get it on eBay."
"Buy it, sell it, love it"
"Buy it New, Buy it Now"
"When it's on your mind, it's on eBay"
Website eBay.com
Written in Java[3]
IPv6 support No
Alexa rank Increase 19 (March 2015)[4]
Type of site E-commerce
Registration Guest checkout available on site, registration required to sell
Available in Multilingual

eBay Inc. (stylized ebay) is an American multinational corporation and e-commerce company, providing consumer-to-consumer & business-to-consumer sales services via Internet. It is headquartered in San Jose, California, United States. eBay was founded by Pierre Omidyar in 1995, and became a notable success story of the dot-com bubble; it is a multi-billion dollar business with operations localized in over thirty countries.[5][6]

The company manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide. In addition to its auction-style sales, the website has since expanded to include "Buy It Now" shopping; shopping by UPC, ISBN, or other kind of SKU (via Half.com); online classified advertisements (via Kijiji or eBay Classifieds); online event ticket trading (via StubHub); online money transfers (via PayPal)[7] and other services.

It is not a free website, but charges users an invoice seller fee on the basis of if they have sold or listed any items.[8]

History


eBay headquarters in San Jose, California

Early years

AuctionWeb was founded in California, on September 3, 1995, by French-born Iranian-American computer programmer Pierre Omidyar (born June 21, 1967) as part of a larger personal site.[9] One of the first items sold on AuctionWeb was a broken laser pointer for $14.83. Astonished, Omidyar contacted the winning bidder to ask if he understood that the laser pointer was broken. In his responding email, the buyer explained: "I'm a collector of broken laser pointers."[10] The frequently repeated story that eBay was founded to help Omidyar's fiancée trade Pez candy dispensers was fabricated by a public relations manager in 1997 to interest the media, which were not interested in the company's previous explanation about wanting to create a "perfect market".[11] This was revealed in Adam Cohen's book, The Perfect Store (2002),[9] and confirmed by eBay.[11]

Reportedly, eBay 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 resulting price increase (from $30/month to $250) forced him to start charging those who used eBay, and was not met with any animosity.[citation needed] It resulted in the hiring of Chris Agarpao as eBay's first employee to handle the number of checks coming in for fees.[citation needed]

Pierre Omidyar, founder and chairman of eBay

Jeffrey Skoll was hired as the first president of the company in early 1996. In November 1996, eBay entered into its first third-party licensing deal, with a company called Electronic Travel Auction to use SmartMarket Technology to sell plane tickets and other travel products. Growth was phenomenal; in January 1997 the site hosted 2,000,000 auctions, compared with 250,000 during the whole of 1996.[12] The company officially changed the name of its service from AuctionWeb to eBay in September 1997. Originally, the site belonged to Echo Bay Technology Group, Omidyar's consulting firm. Omidyar had tried to register the domain name echobay.com, but found it already taken by the Echo Bay Mines, a gold mining company,[13] so he shortened it to his second choice, eBay.com.[14]

In 1997, the company received $6.7 million in funding from the venture capital firm Benchmark Capital.[15]

Meg Whitman was hired as eBay President and CEO in March 1998. At the time, the company had 30 employees,[16] half a million users and revenues of $4.7 million in the United States.[citation needed]

eBay went public on September 21, 1998,[17] and both Omidyar and Skoll became instant billionaires. eBay's target share price of $18 was all but ignored as the price went to $53.50 on the first day of trading.[18]

2000s

As the company expanded product categories beyond collectibles into almost any saleable item, business grew quickly.[10] In February 2002, the company purchased iBazar, a similar European auction web site founded in 1998 and then bought PayPal on October 14, 2002.


By early 2008, the company had expanded worldwide, counted hundreds of millions of registered users, 15,000+ employees and revenues of almost $7.7 billion.[19] After nearly ten years at eBay, Whitman decided to enter politics. On January 23, 2008, the company announced that Whitman would step down on March 31, 2008 and John Donahoe was selected to become President and CEO.[20] Whitman remained on the Board of Directors and continued to advise Donahoe through 2008. In late 2009, eBay completed the sale of Skype for $2.75 billion, but will still own 30% equity in the company.[21]

In 2012 eBay was charged with Antitrust Employment by the United States Department of Justice (.[22]

It was announced on September 30, 2014, that eBay would spinoff PayPal into a separate publicly traded company, which is taking steps that were first demanded nine months ago by activist hedge fund magnate Carl Icahn. The move will break eBay almost in half, separating it from PayPal, which eBay purchased 12 years ago and built into a giant that generates almost half of the company’s revenue. The spinoff is expected to be completed sometime in the second half of 2015. After the separation, eBay’s current chief executive, John Donahoe, will step down from that role.[23][24][25]

Corporate affairs

Board of directors

As of November 2014, the board of directors was as follows:[26]

In September 2012, eBay introduced their new logo set in Univers.[27] This new logo was installed onto the main website on October 10, 2012.

Profit and transactions

eBay generates revenue by a complex system of fees for services, listing product features, and a Final Value Fee for sales proceeds by sellers. As of November 2012, the U.S.-based eBay.com charges $0.10 to $2, based on the opening or reserve price, as an insertion fee for a basic auction-style listing without any adornments. The Final Value Fee amounts to 10% of the total amount of the sale, which is the price of the item plus shipping charges.[28] Fixed-price listings have an insertion fee of $0.30, and the final value fee varies based on category and total amount of the sale (e.g., 13% for DVDs & Movies up to $50).[29] The UK based ebay.co.uk[30] takes from £0.15 to a maximum rate of £3 per £100 for an ordinary listing and from 0.75% to 10% (writing as of June 2009) of the final price. Reduced Final Value Fees are available to business registered customers. In addition, eBay owns the PayPal payment system that has fees of its own.

Under U.S. law, a state cannot require sellers located outside the state to collect a sales tax, making purchases more attractive to buyers. Although some state laws require resident purchasers to pay use tax on out-of-state purchases, it is not a common practice.[citation needed] However, sellers that operate as a business do follow state tax regulations on eBay transactions.[31][32] However Value Added Tax (VAT), a form of sales tax in EU countries, is different. eBay requires sellers to include the VAT element in their listing price and not as an add-on and thus profits by collecting fees based on what governments tax for VAT; it not only receives fees as a percentage of the sale price "ex VAT" but also the same percentage on the VAT itself.[33] In a similar manner eBay also charges its FVF on the shipping fees charged by the Post Office (USPS) or other third party shippers, even when shipping is a separate charge.

The company's business strategy includes increasing international trade.[34][35] eBay has already expanded to over two dozen countries including China and India. Strategic international expansion has failed in Taiwan and Japan, where Yahoo! had a head start, and New Zealand where TradeMe, owned by the Fairfax media group is the dominant online auction website. eBay also notably failed in China due to competition from local rival Taobao.[36] eBay entered the Chinese market in 2002 and shut down its Chinese site in 2007.[37]

In its Q1 2008 results, total payment volume via PayPal increased 17%, but off the eBay auction site it was up 61%.[38]

For most listing categories, eBay sellers are permitted to offer a variety of payment systems such as Escrow.com,[39] PayPal, Paymate, ProPay, and Moneybookers.[40]

Escrow.com is eBay's approved escrow site. The transactions processed through Escrow.com largely are in relation to eBay Motors; they are not restricted to this type of listing however.[39]

eBay runs an affiliate program under the name eBay Partner Network.[41] eBay affiliate marketers were originally paid a percentage of the eBay seller's transaction fees, with commissions ranging from 50% to 75% of the fees paid for an item purchased. In October 2009, eBay 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 eBay and is reported as Earnings Per Click, or EPC. In October 2013, ePN launched a new pricing model. The new model is more transparent, and is based on category-level base commission rates with bonuses available for referring new and reactivated buyers.[39]

On April 18, 2012 eBay reported a 29% Q1 revenue increase to $3.3 billion compared to their Q1 in 2011. Net income was reported to be at $570 million for the quarter.[42]

Environmental record

On May 8, 2008, eBay announced the opening of its newest building on the company's North Campus in San Jose, which is the first structure in the city to be built from the ground up to LEED Gold standards.[43] The building, the first the company had built in its 13-year existence, uses an array of 3,248 solar panels, spanning 60,000 square feet (5,600 m2), and providing 650 kilowatts of power to eBay's campus.[44][45] The array can supply 15%–18% of the company's total energy requirements, reducing the amount of greenhouse gases that would be produced to create that energy by other means.[44] SolarCity, the company responsible for designing the array, estimates that the solar panels installed on eBay's campus will prevent 37 million pounds of carbon dioxide from being released into the environment as a result of replaced power production over the next three decades. Creating an equivalent impact to remove the same amount of carbon dioxide from the atmosphere would require planting 322 acres (1.30 km2) of trees.[45] The design of the building also incorporates other elements to reduce its impact on the environment. The building is equipped with a lighting system that detects natural ambient light sources and automatically dims artificial lighting to save 39% of the power usually required to light an office building. eBay's newest building also reduces demand on local water supplies by incorporating an eco-friendly irrigation system, and low-flow shower heads and faucets. Even during construction, more than 75% of the waste from construction was recycled. eBay also runs buses between San Francisco and the San Jose campus to reduce the number of commuting vehicles.[43] In 2014, eBay and several other Oregon businesses signed the Oregon Business Climate Declaration to promote local job growth and slow carbon pollution.[46]

Acquisitions

StubHub

StubHub was acquired by eBay in January 2007 for a reported $310 million.[47][48][49] According to CNN Money, 2007 was a very successful year for the company, handling five million individual transactions, more than in the previous six years combined of its history.[50] Staffing at StubHub had increased to 350 workers by the time of the sale.[49] Eight months after the acquisition, StubHub reached an exclusive agreement with Major League Baseball (MLB).[50] They get a piece of the 25% in commissions StubHub earns on either end of a season tiy in 2007, alleging "intentional interference" with Ticketmaster's contractual rights.[51]

Skype

eBay Inc. acquired Skype in 2005 and significantly expanded its customer base to more than 480 million registered users worldwide. To focus on its core e-commerce and payments businesses, eBay Inc. sold a majority stake in Skype in November 2009, retaining a minority investment in the company.[citation needed] In May 2011, Microsoft announced that it had acquired Skype for $8.5 billion.

Craigslist

In the summer of 2004, eBay acknowledged that it had acquired 25% of classified listings website, Craigslist. Former Craigslist executive Phillip Knowlton was the seller, and he insisted that his former employer was aware of his plans to divest his holdings. Initially, eBay assured Craigslist that they would not ask the company to change the way it does business. eBay spokesman Hani Durzy stated that the "investment was really for learning purposes; it gives us access to learn how the classified market online works".[52]

In March 2005, eBay launched the classifieds service Kijiji. In April 2008, eBay sued Craigslist to "safeguard its four-year financial investment", claiming that in January 2008, Craigslist took actions that "unfairly diluted eBay's economic interest by more than 10%."[53] Craigslist countersued in May 2008 "to remedy the substantial and ongoing harm to fair competition" that Craigslist claims is constituted by eBay's actions as a Craigslist shareholder.[54] In September 2010, Delaware Judge William Chandler ruled that the actions of Craigslist were unlawful, and that the actions taken by Craigslist founders Jim Buckmaster and Craig Newmark had "breached their fiduciary duty of loyalty", and restored eBay's stake in the company to 28.4% from a diluted level of 24.85%.[55] However, the judge dismissed eBay's objection to a staggered board provision citing that Craigslist has the right to protect its own trade secrets.[56][57] eBay spokesman Michael Jacobson stated "We are very pleased that the court gave eBay what it sought from the lawsuit".[55]

PayPal

On October 3, 2002, PayPal became a wholly owned subsidiary of eBay.[58] Its corporate headquarters are in San Jose, California,[59] United States at eBay's North First Street satellite office campus. The company also has significant operations in Omaha, Scottsdale, Charlotte, Austin, and Boston in the United States; Chennai in India; Dublin in Ireland; Kleinmachnow in Germany; and Tel Aviv in Israel. From July 2007, PayPal has operated across the European Union as a Luxembourg-based bank.

On September 30, 2014, eBay Inc. announced it would split into two independent public companies —eBay and PayPal— by the end of 2015.[60]

Use for data analysis

As eBay is a huge, publicly visible market, it has attracted a great deal of interest from economists, who have used it to analyze many aspects of buying and selling behavior, auction formats, etc., and compare these with previous theoretical and empirical findings.

Just as economists have shown interest in eBay's operations, computer information systems researchers have also shown interest in eBay. Recently Michael Goul, Chairman of the Computer Information Systems department of the W. P. Carey School of Business at Arizona State University, published an academic case based on eBay’s big data management and use. In the case, Goul discusses how eBay is a data-driven company which processes 50 petabytes of data a day.[61]

eBay uses a system that allows different departments in the company to check out data from their data mart into sandboxes for analysis. According to Goul, eBay has already experienced significant business successes through its data analytics. To continue improving the business through data-driven decision making, eBay employs 5,000 data analysts.[61]

Third party

The accounting software company Intuit launched in 2006 a service called ItsDeductible which is a free web-based donation tracking service. With regard to eBay, the service uses data from the site to assist users in assigning a market value to the items they donate.[62]

GCHQ

UK's GCHQ has a suite of tools for monitoring target use of eBay, named ELATE.[63]

ebay.com

Items

Millions of collectibles, decor, appliances, computers, furnishings, equipment, domain names,[64] vehicles, and other miscellaneous items are listed, bought, or sold daily on eBay. In 2006, eBay launched its Business & Industrial category, breaking into the industrial surplus business.
Generally, anything can be auctioned on the site as long as it is not illegal and does not violate the eBay Prohibited and Restricted Items policy.[65] Services and intangibles can be sold, too. Large international companies, such as IBM, sell their newest products and offer services on eBay using competitive auctions and fixed-priced storefronts. Separate eBay sites such as eBay US and eBay UK allow the users to trade using the local currency. Software developers can create applications that integrate with eBay through the eBay API by joining the eBay Developers Program.[66] In June 2005, there were more than 15,000 members in the eBay Developers Program, comprising a broad range of companies creating software applications to support eBay buyers and sellers as well as eBay Affiliates.

Controversy has arisen over certain items put up for bid. For instance, in late 1999, a man offered one of his kidneys for auction on eBay, attempting to profit from the potentially lucrative (and, in the United States, illegal) market for transplantable human organs.[67] On other occasions, people and even entire towns have been listed, often as a joke or to garner free publicity.[citation needed] In general, the company removes auctions that violate its terms of service agreement.

eBay North First Street satellite office campus (home to PayPal)

Beginning in August 2007, eBay required listings in "Video Games" and "Health & Beauty" to accept its payment system PayPal and sellers could only accept PayPal for payments in the category "Video Games: Consoles".[68] Starting January 10, 2008, eBay said sellers can only accept PayPal as payment for the categories "Computing > Software", "Consumer Electronics > MP3 Players", "Wholesale & Job Lots > Mobile & Home Phones", and "Business, Office & Industrial > Industrial Supply / MRO".[69] eBay announced that starting in March 2008, eBay had added to this requirement that all sellers with fewer than 100 feedbacks must offer PayPal and no merchant account may be used as an alternative.[70][71] This is in addition to the requirement that all sellers from the United Kingdom have to offer PayPal.[72]

Further, and as noted below, it was a requirement to offer PayPal on all listings in Australia and the UK. In response to concerns expressed by the Australian Competition and Consumer Commission, however, eBay has since removed the policy on the ebay.com.au website requiring sellers to offer PayPal as a payment option.[73]


eBay Express logo

eBay Office in Toronto

In April 2006, eBay opened its new eBay Express site, which was designed to work like a standard Internet shopping site for consumers with United States addresses. It closed in 2008. Selected eBay items were mirrored on eBay Express, where buyers shopped using a shopping cart to purchase from multiple sellers. The UK version was launched to eBay members in mid-October 2006 but on January 29, 2008 eBay announced its intention to close the site.[74] The German version, eBay Express Germany,[75] was also opened in 2006 and closed in 2008.

At the 2008 eBay Developer's Conference, eBay announced the Selling Manager Applications program (SM Apps).[76] The program allows approved developers to integrate their applications directly into the eBay.com interface.[77] The applications created by developers are available for subscription by eBay members who also subscribe to Selling Manager.

eBay maintains a number of specialty sites including the discussion boards, groups, answer center, chat rooms, and reviews and guides. eBay's mobile offerings include SMS alerts, a WAP site, Java ME clients, and mobile applications for Windows Phone, Android OS and Apple iPhone.

The initiative Choice in eCommerce was founded on May 8, 2013 by several online retailers in Berlin, Germany.[78][79][80][81][82][83][84][85][86] The cause was, in the view of the initiative, sales bans and online restrictions by individual manufacturers. The dealers felt cut off from their main sales channel and thus deprived them the opportunity to use online platforms like Amazon, eBay or Rakuten in a competitive market for the benefit of their customers.

Unusual items

Many unusual items have been placed for sale on eBay, including at least two previously undiscovered species, including the Coelopleurus exquisitus sea urchin.[87][88]

Prohibited or restricted items

In its earliest days, eBay was nearly unregulated. However, as the site grew, it became necessary to restrict or forbid auctions for various items. Note that some of the restrictions relate to eBay.com (the U.S. site), while other restrictions apply to specific European sites (such as Nazi paraphernalia). Regional laws and regulations may apply to the seller or the buyer. Generally, if the sale or ownership of an item is regulated or prohibited by one or more states, eBay will not permit its listing. Among the hundred or so banned or restricted categories:

Bidding

Auction-style listing

Bidding on eBay (old or new)'s auction-style listing is called proxy bidding and is essentially equivalent to a Vickrey auction, with the following exceptions.
  • The winning bidder pays the second-highest bid plus one bid increment amount (that is, some small predefined amount relative to the bid size), instead of simply the highest bid. However, since the bid increment amounts are relatively insignificant compared to the bid size, they are not considered from a strategic standpoint.[111]
  • The highest bidder's bid is sealed, as in a Vickrey auction, but the current winning bid (second highest plus one increment) is displayed throughout the auction to allow price discovery.[112]

Seller ratings

In 2008, eBay began using detailed seller ratings with four different categories. When leaving feedback, buyers are asked to rate the seller in each of these categories with a score of one to five stars, with five being the highest rating and one, the lowest. Unlike the overall feedback rating, these ratings are anonymous; neither sellers nor other users learn how individual buyers rated the seller.
The listings of sellers with a rating of 4.3 or below in any into the four rating categories appear lower in search results. Power Sellers are required to have scores in each category above 4.5.[113][114][115][116][117]

In a reversal of roles, on January 24, 2010 Auctionbytes.com held an open survey in which sellers could effectively rate eBay itself, as well as competing auction and marketplace sites.[118] In the survey, users were asked to rank 15 sites based on five criteria:
  • Profitability
  • Customer Service
  • Communication
  • Ease of Use
  • Recommendation
After the results were published, eBay had finished 13th overall,[119] edged out by established sites such as Amazon and Craigslist, as well as lesser-known selling sites like Atomic Mall, eCRATER, and Ruby Lane. In individual category rankings, eBay was rated the worst of all the 15 sites on Customer Service and Communication, and average on Ease of Use. A number of respondents said they would have given eBay a rating of ten 3 to 5 years ago. eBay was rated twelfth out of fifteen in the Recommended Selling Venue category.

Charity auctions

Using MissionFish as an arbiter, eBay allows sellers to donate a portion of their auction proceeds to a charity of the seller's choice. The program is called eBay Giving Works in the US, and eBay for Charity[120] in the UK. eBay provides a partial refund of seller fees for items sold through charity auctions.[121] As of March 4, 2010, $154 million has been raised for U.S. nonprofits by the eBay Community since eBay Giving Works began in 2003.[122]

Some high-profile charity auctions have been advertised on the eBay home page.[citation needed] As of June 2010, the highest successful bid on a single item for charity was for the annual "Power Lunch"[123] with investor Warren Buffett at the famous Smith & Wollensky Steakhouse in New York. The winning bid was $2.63 million with all of the proceeds going to the Glide Foundation. The winning bidder was not made public, but was able to bring up to seven friends to the lunch. In 2012, a higher bid, of $3.46 million, also going to the Glide Foundation, won a lunch with Buffet.[124]

The previous highest successful bid on a single item for charity was for a letter[125] sent to Mark P. Mays, CEO of Clear Channel (parent company of Premiere Radio Networks the production company that produces The Rush Limbaugh Show and Glenn Beck Program) by Senator Harry Reid and forty other Democratic senators, complaining about comments made by conservative talk show host Rush Limbaugh. The winning bid was $2,100,100, with all of the proceeds going to the Marine Corps-Law Enforcement Foundation, benefiting the education of children of men and women who have died serving in the armed forces. The winning bid was matched by Limbaugh in his largest charity donation to date.[126]

In 2007; eBay Canada partnered with Montreal-based digital branding agency CloudRaker to develop a campaign to raise money for Sainte-Justine children's hospital in Montreal. They aligned themselves with Internet phenomenon Têtes à claques to create an eBay auction based on popular T-A-C character Uncle Tom, an infomercial host who pitches absurd products. eBay and CloudRaker reproduced Uncle Tom's imaginary products, The Body Toner Fly Swatter, The Willi Waller Potato Peeler, and the LCD Shovel and sold them online. In 6 weeks, they raised $15,000 for Hôpital St-Justine with one fly swatter, one potato peeler, and one shovel, a world record. The Body Toner Fly Swatter sold for $8,600, the Willi Waller Potato Peeler sold for $3,550, and the LCD Shovel sold for $2,146.21.

Shipping

Before an auction, eBay lets sellers choose which shipping options to offer — regular mail, express mail, or courier service. The website lets buyers choose which option to accept.

Since 2012, eBay has also allowed US sellers to opt into its Global Shipping Program. The program works as follows: Each seller decides whether or not to opt into the program. If a seller opts in, and a non-US buyer buys an item from the seller, then the buyer pays an additional fee to Pitney Bowes. The seller ships the item to a Pitney Bowes facility in the US. After receiving the item, Pitney Bowes forwards it to the buyer. The program enhances the selection available to buyers,[127] but can considerably increase buyers' costs on low-value items.

Controversy and criticism

eBay has its share of controversy, including cases of fraud, its policy of requiring sellers to use PayPal, and concerns over forgeries and intellectual property violations in auction items. There are also issues of how negative feedback after an auction can offset the benefits of using eBay as a trading platform. eBay has also been criticised for not paying its share of UK tax: the Sunday Times reported in October 2012 that eBay pays only £1.2m in tax on sales of over £800m.[128]

2014 Security Breach

On May 21, 2014 the company revealed that the consumer database of usernames, passwords, phone numbers, and physical addresses had been breached between late February and early March. Users were advised to change their passwords; in order to expedite this a "change password" feature was added to profiles of users who had not yet done so. The Syrian Electronic Army took responsibility for the attack. The SEA said that even though the hack revealed millions of user's banking details to them, they would not misuse the data. They had replaced the front pages of the websites with their own logo, called "Defacing" in technical terms. The hack put eBay's stock share in the market rapidly in down trend. The eBay stock value crashed through intra-day trade as a result of the breach of security.[129][130][131][132]

Reddit


From Wikipedia, the free encyclopedia

Reddit Inc.
Reddit Logo
Type Private
Founded June 23, 2005 (2005-06-23)[1]
Headquarters San Francisco, California, U.S.
Area served Worldwide
Founder(s) Steve Huffman
Alexis Ohanian
Key people Ellen Pao (Interim CEO) [2]
Employees 68[3]
Slogan(s) "The front page of the internet"
Website www.reddit.com
Written in Python[4]
Alexa rank positive decrease 26 (March 2015)[5]
Type of site Social news
Advertising Banner ads, promoted links
Registration Optional (required to submit, comment, or vote)
Users 174 million (November 2014) [2]
Available in Multilingual, primarily English
Current status Active

Reddit /ˈrɛdɪt/,[6] stylized as reddit,[7] is an entertainment, social networking service and news website where registered community members can submit content, such as text posts or direct links. Registered users can then vote submissions "up" or "down" to organize the posts and determine their position on the site's pages. Content entries are organized by areas of interest called "subreddits".

Reddit was founded by University of Virginia roommates Steve Huffman and Alexis Ohanian. Condé Nast Publications acquired the site in October 2006. Reddit became a direct subsidiary of Condé Nast's parent company, Advance Publications, in September 2011. As of August 2012, Reddit operates as an independent entity, although Advance is still its largest shareholder.[8] Reddit is based in San Francisco, California. In October 2014 Reddit received $50 million in funding from Snoop Lion and other investors.[9]

Overview

Site

The site is a collection of entries submitted by its registered users, essentially a bulletin board system. The name "Reddit" is a play-on-words with the phrase "read it", i.e., "I read it on Reddit".[10]
The site's content is divided into numerous categories, and 50 such categories, or "default subreddits," are visible on the front page to new users and those who browse the site without logging in to an account. As of May 2014, these include:[11]

Category Subreddits
Educational News, Science, Space, TodayILearned (TIL), and WorldNews
Entertainment Creepy, Documentaries, Gaming, ListenToThis, Movies, Music, NoSleep, Sports, Television, and Videos
Discussion-based AskReddit, AskScience, Books, ExplainLikeImFive, IAmA, and TwoXChromosomes
Humor/light-hearted DataIsBeautiful, Funny, InternetIsBeautiful, Jokes, NotTheOnion, ShowerThoughts, StandUpShots, TIFU, and UpliftingNews
Image sharing Art, Aww, EarthPorn, Gifs, MildlyInteresting, OldSchoolCool, Pics, and PhotoshopBattles
Self-improvement DIY, Fitness, Food, GetMotivated, LifeProTips, PersonalFinance, Philosophy, and WritingPrompts
Technology Futurology and Gadgets
Meta Announcements and Blog

When items (links or text posts) are submitted to a subreddit, users (redditors) can vote for or against them (upvote/downvote). Each subreddit has a front page that shows newer submissions that have been rated highly. Redditors can also post comments about the submission, and respond back and forth in a conversation-tree of comments; the comments themselves can also be upvoted and downvoted. The front page of the site itself shows a combination of the highest-rated posts out of all the subreddits a user is subscribed to.

Front-page rank – for both the general front page and for individual subreddits – is determined by the age of the submission, positive ("upvoted") to negative ("downvoted") feedback ratio and the total vote-count.[12] Dozens of submissions cycle through these front pages daily.

As of June 2013, commentary on the site is particularly active, with several communities generating thousands of comments per day.[13]

Users

Registering an account with Reddit is free and does not require an email address to complete. Users are referred to as "redditors". When logged in, users have the ability to vote on submissions and comments to increase or decrease their visibility and submit links and comments. Users can also create their own subreddit on a topic of their choosing, and interested users can add it to their frontpage by subscribing to it. For example, as of November 2013, the Wikipedia subreddit – subtitled "the most interesting pages on Wikipedia" – has over 143,000 subscribers.[14] Reddit comments and submissions are occasionally abbreviated and peppered with terms that are understood within (and in many cases also outside) the Reddit community, ranging from OP (for "original poster" – the user who posted the submission being commented upon) to NSFW (for "not safe for work").[15] Users earn "link karma" and "comment karma" for submitting popular links and comments, which accumulate as point values on their user profile. Users may also be gifted "reddit gold" if another user has well received the comment or post, generally due to humorous or high quality content. This is also known as gilding. Reddit has also created a system of points called "creddits". Reddit gold "creddits" are like gift certificates: each creddit you have allows you to give one month of reddit gold to someone else. The points do not lead to a prize as they are meant to stand in as a badge of honor for the user among their peers, although redditors have attempted to redeem their points before.[16]
Reddit also allows submissions that do not link externally. These are called "self posts" or "text submissions". Many discussion-based subreddits allow only text-only submissions such as "AskReddit" – where users are only allowed to pose broad, discussion based questions to the community at large. Self posts do not accumulate karma points for the submitter, but they can still be voted on like other content.


Mister Splashy Pants logo used on November 27, 2007

Reddit communities occasionally coordinate to skew polls on other websites, such as in 2007 when Greenpeace allowed web users to decide the name of a killer whale it was tracking. Reddit users voted en masse to name the whale "Mr. Splashy Pants", and Reddit administrators further encouraged this by changing the site logo to a whale during the voting. In December of that year, Mister Splashy Pants was announced as the winner of the competition.[17]

Within the site, Redditors commemorate their "cake day" once a year, which is the anniversary of the day the user's account was first created. The "cake day" offers no special benefit, except a small icon representing a slice of cake appears next to that user's name for 24 hours.[18]

Redditors can "friend" one another, which gives a redditor quick access to posting and comments of their friend list. The commenting system and friend system, along with a certain "Reddit ethos" (called reddiquette on Reddit), lend Reddit aspects of a social networking service, though not to the extent of Facebook, Google+, and other websites aimed at providing social networking services.
The Reddit community socialize at local parks and bars around the world,[19] and there are many localized subreddits for local meetings.

Subreddits

Reddit entries are organized into areas of interest called "subreddits". Historically, the front page was the main subreddit, and other areas were "subreddits". There is now no main subreddit. Instead, there are multiple default subreddits dealing with topics such as books, television, and music. Any registered user may create a subreddit, although a link to do so does not appear on the user's homepage until after thirty days.[20] There are over 5,400 active subreddits to peruse,[21][22] with a default set of 50 subreddits as of May 2014.

Users may customize what is shown on their personal front page by subscribing to individual subreddits through a page that shows all subreddits available. The site's general front page is also accessible via a link to "all" at the top of the individual user's customized front page.

In an interview with Memeburn, Reddit GM, Erik Martin noted that the platform's "approach is to give the community moderators or curators as much control as possible so that they can shape and cultivate the type of communities they want".[23]

IAmA and AMA

One of the most popular subreddits is IAmA ("I Am A") where a user may post "AMAs" (for "Ask Me Anything"), or similarly "AMAAs" ( for "Ask Me Almost/Absolutely Anything") – prompts for others to ask questions about any topic. AMAs are open to all Reddit users, and use the site's comment system for both questions and answers; it is similar to a press conference, but online. This subreddit was founded in May 2009.[24]

A number of notable individuals have participated in the IAmA subreddit, including President Barack Obama[25][26] (while campaigning for the 2012 election), Dave Grohl,[27] Madonna,[28] Chris Hadfield[29] (who answered questions from the International Space Station), Bill Gates,[30] Ron Paul,[31] Stephen Colbert,[32] Psy, Arnold Schwarzenegger, Rachel Maddow, Renée Fleming, M. Shadows, Louis C.K., Roger Federer, Larry King, Philip Zimbardo, Bill Nye,[33] Stan Lee, John Mather, David Copperfield, Paul Krugman, Danny Boyle, rapper J. Cole,[34] Al Gore, Roger Ebert, Michael Bolton, Gary Johnson, Lawrence Krauss, Jill Stein, Kevin Rudd, Julie Benz,[35] Amanda Palmer,[36] and Tim Ferriss.[37] As of April 2014, Barack Obama's AMA is the highest rated on the site;[38] the increased traffic brought down many parts of the website when the AMA occurred on August 29, 2012.[39]

Celebrities participating in IAmAs have seen both positive and negative responses. Woody Harrelson's[40] AMA was criticized after Harrelson declined to answer questions that were unrelated to the movie Rampart he was promoting.[41] In contrast, rapper Snoop Lion attracted 1.6 million page views[42] after conducting an AMA that provided several candid responses to the community's questions.[43]

Other than Woody Harrelson, Bollywood actress Priyanka Chopra's[44] AMA gained a lot of criticism and negative feedback when instead of answering the questions she just attempted to promote her new album and left most of the concerns expressed unanswered. Also, among the celebrities that gained popularity recently and had a positive response is Peter Dinklage,[45] most popularly known for his role as Tyrion Lannister in the HBO drama series Game of Thrones. The reasons his IAmA was a great success, as described by redditors, include the fact that he managed to answer most of the concerns and that he stayed online much longer than he was expected to so he could spend more time with his fans. The actor departed by commenting “This feels like being interviewed by a hundred thousand news anchors at once! But much friendlier anchors...who seem to know their material... I really appreciate everyone's enthusiasm and questions. I tried to move another engagement to make more time but it's really hard during shoots. I am going to try to answer a few more short ones now. And remember: If you see me on the street and want a photo, ask! It's just weird when your kid asks for directions.“

Today I Learned (TIL)

Today I Learned (Acronym ‘TIL’)[46] is another one of the most popular subreddits on the website Reddit. As of November 23, 2014 the subreddit has over 7 million subscribers. The main purpose of the page as described by the website is to share something new that the user learned recently. Despite a simple premise, the subreddit has a set of assigned rules. The idea is to generate content that is original but it doesn’t force posts to be completely ‘new concepts’ just as long as the original poster was formerly oblivious to it and in accordance to the fact that the content wasn’t posted earlier within the subreddit. The formal rules dictate that each of the posts must begin with the letters ‘TIL’ followed by a brief idea of the content.

History

In June 2005,[47] Reddit was founded in Medford, Massachusetts by Steve Huffman and Alexis Ohanian, both 22-year-old graduates of the University of Virginia.[48]

The team expanded to include Christopher Slowe in November 2005. Between November 2005 and January 2006 Reddit merged with Aaron Swartz's company Infogami, and Swartz became an equal owner of the resulting parent company, Not A Bug.[49][50] Condé Nast Publications, owner of Wired, acquired Reddit on October 31, 2006, and the team moved to San Francisco.[51] In January 2007, Swartz was fired.[52]

By the end of 2008, the team had grown to include Erik Martin, Jeremy Edberg,[53] David King,[54] and Mike Schiraldi.[55] In 2009, Huffman and Ohanian moved on to form Hipmunk, recruiting Slowe[56] and King[57] shortly thereafter.

In July 2010, after explosive traffic growth, Reddit introduced Reddit Gold, offering new features for a price of $3.99/month or $29.99/year.[58] Reddit Gold adds a number of features to the interface, including the ability to display more comments on a page, access to the private subreddit /r/lounge, and notifications whenever one's username is mentioned in a comment. It's also possible to endow comments or submissions of other users and thereby give a gold membership to them as an anonymous present.[59]

On September 6, 2011, Reddit became operationally independent of Condé Nast, now operating as a separate subsidiary of its parent company, Advance Publications.[60]

On January 11, 2012, Reddit announced that it would be participating in a 12-hour sitewide blackout in protest of the Stop Online Piracy Act.[61] The blackout occurred on January 18 and coincided with the blackouts of Wikipedia and several other websites. In May 2012, Reddit joined the Internet Defense League, a group formed to organize future protests.[62]

On February 14, 2013, Reddit began accepting the digital currency bitcoin for its Reddit Gold subscription service through a partnership with bitcoin payment processor Coinbase.[63]

On October 29, 2014, Reddit comes to the crowdfunding field with Redditmade, a service that allows moderators to create merchandise for their subreddits.[64]

On November 2014, Chief Executive Yishan Wong resigned and co-founder Alexis Ohanian returned as the full-time executive chairman. Ellen Pao, Reddit's business and partnerships strategist became the interim chief executive.[65]

Technology

Reddit was originally written in Common Lisp but was rewritten in Python in December 2005.[4] The reasons given for the switch were wider access to code libraries and greater development flexibility. The Python web framework that former Reddit employee Aaron Swartz developed to run the site, web.py, is now available as an open-source project.[66]

On June 18, 2008, Reddit became an open source project.[67] With the exception of the anti-spam/cheating portions, all of the code and libraries written for Reddit became freely available on GitHub.[68]

As of November 10, 2009, Reddit uses Pylons as its web framework.[69]

As of November 10, 2009, Reddit has decommissioned their physical servers and migrated to Amazon Web Services.[70]

Reddit uses PostgreSQL as their primary datastore and is slowly moving to Apache Cassandra, a column-oriented datastore. It uses RabbitMQ for offline processing, HAProxy for load balancing and memcached for caching.

In early 2009, Reddit started using jQuery.[71]

On June 7, 2010, Reddit staff launched a revamped mobile interface featuring rewritten CSS, a new color scheme, and a multitude of improvements.[72]

On July 21, 2010, Reddit outsourced the Reddit search engine to Flaptor, who used its search product IndexTank.[73]

As of July 12, 2012, Reddit uses Amazon CloudSearch.[74]

There are several unofficial applications that use the Reddit API in the Google Play store, and F-Droid repository. Examples include: Reddit is Fun,[75] Andreddit,[76] F5, BaconReader,[77] Reddit Sync[78] and an Android tablet specific application called Reddita.[79] There are also several Windows apps used to access Reddit, including unofficial Reddit apps such as ReddHub[80] and Reddit To Go!.[81] An unofficial desktop application Reditr[82] exists that is compatible with Windows, OS X, Linux and ChromeOS. There are several Reddit applications for iOS. These include Alien Blue, Karma, Upvote, iReddit, and iPad-specific applications such as Reddzine and Biscuit.[83]

In September 2014, an official mobile application for browsing AMA (Ask Me Anything) threads was released for the iOS and Android platforms under the name Ask me Anything.[84]

As of October 2014, Alien Blue is now the official iOS Reddit app.[85]

Demographics

According to Google Ad Planner's estimate, as of May 2013, the median Reddit user is male (59%), 18–29 years of age, and is connecting from the United States (68%). Pewinternet.org has stated that 6% of all American adult Internet users have used Reddit before.[86]

Community and culture

The website is known for its open nature and diverse user community that generate its content. Its demographics allows for wide-ranging subject areas, or main subreddits, that receive much attention, as well as the ability for smaller subreddits to serve more niche purposes. For example, the University of Reddit, a subreddit that exists to communally teach, emerged from the ability to enter and leave the online forum, the "classroom," at will, and classes ranging from computer science to music, to fine art theory exist.[87] The unique possibilities that subreddits provide create new opportunities for raising attention and fostering discussion across many areas. In gaining popularity in terms of unique users per day, Reddit has been a platform for many to raise publicity for a number of causes. And with that increased ability to garner attention and a large audience, users can use one of the largest communities on the Internet for new, revolutionary, and influential purposes.[88]

Its popularity has enabled users to take unprecedented advantage of such a large community. Its innovative socially ranked rating and sorting system drives a method that is useful for fulfilling certain goals of viewership or simply finding answers to interesting questions. User sentiments about the website's function and structure include feelings about the breadth and depth of the discussions on Reddit and how the site makes it easy to discover new and interesting items. Almost all of the user reviews on Alexa.com, which rates Reddit's monthly unique traffic rating 125th in the United States, mention Reddit's "good content" as a likable quality. However, others raise the negative aspects of the potential for Reddit's communities to possess a "hive mind" of sorts,[89] embodying some negative aspects of group interaction theories like crowd psychology and collective consciousness.

Philanthropic efforts

In recent history, Reddit has been known as the instigator of several charity projects, some short and others long-term, in order to benefit others. A selection of major events are outlined below:
  • In early December 2010, members of the Christianity subreddit decided to hold a fundraiser[90] and later members of the atheism subreddit decided to give some friendly competition,[91] cross-promoting[92] fundraising drives for Médecins Sans Frontières (Doctors Without Borders) and World Vision's Clean Water Fund, respectively. Later, the Islam subreddit joined in, raising money for Islamic Relief. In less than a week, the three communities (as well as the Reddit community at large) raised over $50,000.[93] Most of this was raised by the atheism subreddit, though the smaller Christianity subreddit had a higher average donation amount per subscriber.[94] A similar donation drive in 2011 saw the atheism subreddit raise over $200,000 for charity.[95]
  • In early October 2010, a story was posted on Reddit about a seven-year-old girl, Kathleen Edward, who was in the advanced stages of Huntington's disease. The girl's neighbors were taunting her and her family. Redditors banded together and gave the girl a shopping spree[96][97] at Tree Town Toys, a toy store local to the story owned by a Reddit user.
  • Reddit started the largest Secret Santa program in the world, which is still in operation to date. For the 2010 Holiday season, 92 countries were involved in the Secret Santa program. There were 17,543 participants, and $662,907.60 was collectively spent on gift purchases and shipping costs.[98][99][100] In 2014, about 200,000 users from 188 countries participated.[101]
  • Members from Reddit donated over $600,000 to DonorsChoose in support of Stephen Colbert's March to Keep Fear Alive. The donation spree broke previous records for the most money donated to a single cause by the Reddit community and resulted in an interview with Colbert on Reddit.[102]
  • Reddit users donated $185,356.70 to Direct Relief for Haiti after an earthquake devastated the nation in January 2010.[103]
  • Reddit users donated over $70,000 to the Faraja Orphanage in the first 24 hours to help secure the orphanage after intruders robbed and attacked one of the volunteers, Omari, who survived a strike to the head from a machete.[104]
  • In October 2012, Shitty Watercolour, a popular Redditor known for posting watercolor paintings on the website,[105][106][107] streamed live a 12-hour painting session on YouTube to raise money for charity: water, a non-profit organization which aims to provide potable drinking water in developing countries. Redditors donated a minimum of $10 to have a photo of their choice painted in a 5 cm by 5 cm (2 in×2 in) square section of large sheets of paper.[108][109] The paint-a-thon raised $2,700.[110]

Reddit effect

Also known as the "SlashDot effect", the Reddit effect is when a smaller website has a high influx of traffic due to Reddit.[111] It is also affectionately called the "Reddit Hug of Death" among the website's users. Because Reddit is such a large site, the traffic is immense and can easily crash smaller sites. In order for users to see crashed websites, several Reddit bots have been created that take a snapshot of the website before large amounts of traffic flood the affected website.

"Restoring Truthiness" campaign

As a response to Glenn Beck's August 28, 2010, Restoring Honor rally (heavily promoted by him in his Fox News broadcasts during the summer), in September 2010 Reddit users started a movement to persuade Stephen Colbert to have a counter-rally in Washington, D.C.[112] The movement was started by user mrsammercer, in a post where he describes waking up from a dream in which Stephen Colbert holds a satirical rally in D.C.[113]

He writes, "This would be the high water mark of American satire. Half a million people pretending to suspend all rational thought in unison. Perfect harmony. It'll feel like San Francisco in the late 60s, only we won't be able to get any acid."

The idea resonated with the Reddit community, which launched a campaign to bring the event to life. Over $600,000[114] was raised for charity to gain the attention of Colbert. The campaign was mentioned on-air several times, and when the Rally to Restore Sanity and/or Fear was held in Washington, D.C. on October 30, 2010, thousands of redditors made the journey.[115]

During a post-rally press conference, Reddit co-founder Alexis Ohanian asked, "What role did the Internet campaign play in convincing you to hold this rally?" Jon Stewart responded by saying that, though it was a very nice gesture, the two had already thought of the idea prior and the deposit on using the National Mall was already paid during the summer, so it acted mostly as a "validation of what we were thinking about attempting".[116] In a message to the Reddit community, Colbert later added, "I have no doubt that your efforts to organize and the joy you clearly brought to your part of the story contributed greatly to the turnout and success."[117]

Controversies involving Reddit

The website has a strong culture of free speech and very few rules about the types of content that may be posted.[118] This has led to the creation of several communities that have been perceived as offensive, including forums dedicated to jailbait (since banned) and pictures of dead bodies; several such subreddits were the focus of an edition of Anderson Cooper 360 in September 2011.[119] However, "Suggestive or sexual content featuring minors" was not explicitly banned until February 2012.[120]
On December 16, 2010, a Redditor named Matt posted a link describing how he has donated a kidney, and included a JustGive link to encourage users to give donations to the American Cancer Society.[121] After an initially positive reaction, Reddit users began to become suspicious of Matt's intentions, and suggested that he was keeping the donations for himself. Users telephoned his home and he received death threats. Matt eventually proved that he was genuine by uploading his doctor's records.[122]

On September 10, 2011, a Reddit user posted a link to a photograph on Imgur of a bruise on her face in a thread titled: "I was sexually assaulted in the early evening while wearing jeans and a T-shirt in a 'safe' residential neighbourhood in Toronto. This is what he did to my face. Only rapists cause rape."[123] Reddit users accused her of faking the bruise using make-up, speculated that she might be an "anti-rape activist resorting to a false account of attempted rape in order to further her cause", and sent her death and rape threats. The user eventually proved her innocence by uploading a video of herself rubbing a wet cloth over her wounds.[124][125]

On October 18, 2011, IT manager nyan_all_the_links submitted a post to the subreddit r/gameswap offering Redditors to trade one of 312 codes he had been given for the game Deus Ex: Human Revolution.[126] A group of users obtained nyan_all_the_links's personal details, and began to blackmail him for the codes.[127] The Monday after uploading the post, he received 138 threatening phone calls both at home and at his job, and by the end of the day he had been fired.[128]

Following the 2013 Boston Marathon bombings, Reddit faced criticism after users wrongly identified a number of people as suspects.[129] Notable among misidentified bombing suspects was Sunil Tripathi, a student reported missing before the bombings took place. A body reported to be Sunil's was found in Rhode Island's Providence River on April 25, 2013 as reported by the Rhode Island Health Department. The cause of death was not immediately known, but authorities said they did not suspect foul play.[130] The family later confirmed Tripathi's death was a result of suicide.[131] Reddit general manager Erik Martin later issued an apology for this behavior, criticizing the "online witch hunts and dangerous speculation" that took place on the website.[132] The incident was later referenced in the season 5 episode of the CBS TV series The Good Wife titled "Whack-a-Mole".[133]

In February 2013, Betabeat published a post that recognized the influx of multi-national corporations like Costco, Taco Bell, Subaru, and McDonald's posting branded content on Reddit that was made to appear as if it was original content from legitimate Reddit users. [134]

In late October 2013, the moderators of the /r/politics subreddit banned a large group of websites. Many were left wing news websites, such as Mother Jones, The Huffington Post, Salon, Alternet, Rawstory, The Daily Kos, Truthout, Media Matters, and ThinkProgress as well as some popular progressive blog sites, such as Democratic Underground and Crooks and Liars. They also banned a number of right wing sites—Drudge Report, Breitbart, The Daily Caller, Dailypaul, Little Green Footballs, Power Line, and Reason. Salon reported that "the section's moderators explained in a post on Tuesday, the goal is 'to reduce the number of blogspam submissions and sensationalist titles.' The purge, the moderators explained, is also aimed at sites that provide lots of "bad journalism."[135] The December 2013 list of banned websites has been modified since late October, and sites with original content, such as Mother Jones and The Huffington Post, are allowed.[136] Reddit also banned the News Network RT at that time, because it was Kremlin sponsored RT said.[137] The ban wasn't received well by Reddit's site category r/news's and its 1.1 million users, they believe it’s unjustified news media censorship despite moderators telling its due to spamming.[138]

In January 2014, Mother Jones published a story describing the sale of guns on the site. The report suggested that sellers were doing so to exploit a loophole in federal law.[139] Nearly 100 AR-15s were engraved with the Reddit logo as part of licensing deal made with the page in 2011.[140]

In August 2014, Reddit users began sharing a large number of photos of naked celebrities stolen from their private Apple iCloud accounts.[141][142] A subreddit called "/r/TheFappening" was created as a hub to share these photos,[143] and contained links to most if not all of the criminally obtained explicit images.[144][145][146] Victims of "The Fappening" included high profile names such as Jennifer Lawrence and Kate Upton.[147][148] Some of the images constituted child pornography, as the photos of Liz Lee and McKayla Maroney from the leak were taken when the women were underage.[149] The subreddit was banned on September 6.[150] The scandal led to wider criticisms concerning the website's administration from The Verge and The Daily Dot.[151][152]

On December 18, 2014, Reddit took the unusual step of banning a sub reddit 'SonyGOP' that was being used to distribute hacked Sony files.[153]

Awards

In May 2010, Reddit was named in Lead411's "2010 Hottest San Francisco Companies" list.[154]

Natural science

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