Born in Paris, France to Iranian parents, Omidyar moved to the US at the age of six. Growing up in Washington, D.C., he developed an interest in computing while at St. Andrew's Episcopal School in Potomac, Maryland. He graduated from St. Andrew's in 1984, and in 1988, he graduated with a degree in computer science from Tufts University. Shortly after, Omidyar went to work for Claris, an Apple Computer subsidiary, where he helped write MacDraw. In 1991 he co-founded Ink Development, a pen-based computing startup that was later rebranded as an e-commerce company and renamed eShop.
Omidyar was 28 when he sat down over a long holiday weekend to write the original computer code for what eventually became an Internet sulang-farand — the auction site eBay.eBay stands for e-commerce Bay area. 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. This was revealed in Adam Cohen's 2002 book and confirmed by eBay.
The site was launched on Labor Day, Monday, September 4, 1995, under the more prosaic title of "Auction Web"; it was hosted on a site Omidyar had created for information on the ebola virus. Auction Web was later renamed "eBay". The service was free at first, but started charging in order to cover Internet service provider costs.