Who Got Rich This Week: Omidyar Gets A Bump As Ebay Stock Surges, Paypal Inks New Partnership

After posting expectation-beating second quarter earnings on Thursday, Ebay’s share price reached a record high since its separation from Paypal last year. The online auction site reported quarterly revenue of $2.23 billion, while its 43 cents for earnings per share is higher than analysts’ estimates of 42 cents. Founder Pierre Omidyar, who holds a 7% stake in the e-commerce giant, has seen his net worth climb by $330 million as the company’s stock shot up 15% in the past week. Meanwhile, Paypal has been making waves of its own, striking a deal with Visa that would allow both companies easier access to each other’s platforms.

Born in Paris to Iranian parents, Omidyar came to the U.S. as a child when his surgeon father scored a residency at Johns Hopkins. The self-described “typical nerd or geek” became interested in computers early, skipping his elementary school gym classes to tinker with a computer that the teachers kept in a closet. The youngster soon put his programming skills to good use, creating a program for his high school that printed out library cards for cataloging books.

Following his graduation from Tufts University, Omidyar worked for an Apple subsidiary, but soon became interested in the fledgling world of online commerce. On Labor Day weekend in 1995, he launched a prototype site called Auction Web. The first item sold was a broken laser pointer -- a broken laser pointer collector had stumbled upon the listing -- and soon business took off. In 1997, Omidyar renamed the business Ebay, and the site was hosting 800,000 auctions a day before the end of the year.

“It was just an idea that I had, and I started it as an experiment, as a side hobby basically, while I had my day job,” Omidyar recalled of Ebay to the American Academy of Achievement. “Within nine months the revenue was more than I was making on my day job, and that's kind of when the light bulb went off.” In 2002, shortly after Paypal listed on the NASDAQ, Ebay made its first big name acquisition, purchasing the online payment processor for $1.5 billion. Ebay subsequently built up a formidable portfolio, bringing Skype (now owned by Microsoft), StubHub and Craigslist into the fold. Omidyar, who owns a 7% stake in Paypal in addition to his Ebay holdings, enjoys a fortune of $8.1 billion.

As Paypal became a dominant player in its own right, calls for a spinoff increased, and the San Jose, Calif. based business separated into its own publicly traded company in July 2015. After a sometimes contentious relationship with Visa -- the card network has long been annoyed that Paypal encourages its users to fund their transactions with bank accounts instead of debit or credit cards -- the two buried the hatchet this week with a new partnership. Paypal will make it easier for consumers to pay using Visa cards, and customers could transfer funds from Paypal or Venmo to their bank accounts via Visa debit cards. In return, Paypal account holders could pay for in-store purchases using Visa’s contactless sales terminals, and the company will also receive undisclosed financial incentives for their cooperation.