The Online Garage Sale That General Magic Laughed Off Became eBay

Pierre Omidyar was the quiet guy in tech support. At General Magic, the celebrated 1990s startup trying to build a small portable device, he had a side hustle he kept showing to his colleagues.

It was a web page called AuctionWeb, and it worked like an online garage sale. You listed things you had lying around and did not want anymore, and strangers saw the listings and bid for them.

Pierre asked for help. He wondered if it could become a separate business, backed by General Magic or built with its support. The response was blunt, and typical.

“This is the dumbest idea I’ve ever heard. You’re going to get strangers to trust each other on the internet? Lots of luck,” one colleague said. “We’re not interested. Have fun.”

The objection made sense inside General Magic. The company was allied with AT&T, which was building its own closed network. General Magic’s handheld device was the Magic Link, made by Sony and released in 1994. You were supposed to use it to reach the AT&T network to do things like buy theater tickets, inside General Magic’s rich, interactive multimedia world.

Next to that, the World Wide Web in the mid-1990s looked thin, mostly simple written pages connected by links. The boss of General Magic was Marc Porat, the researcher who had coined the phrase information economy. Porat declared, “The web is passive. They could do without it.”

Pierre’s idea only seemed silly. AuctionWeb grew into eBay, and left Pierre a billionaire many times over.

Years later, former General Magic employees looked back on missing the web, laughing at themselves and shaking their heads over the mistake. Porat, the man who had predicted that information tools would change how people related to each other, had dismissed the web as passive. A colleague had rejected Pierre’s garage sale on the grounds that strangers would never trust each other online, and the company declined to back the site that became eBay.