Airbnb is a privately held company headquartered in San Francisco founded in August 2008, operated and privately owned by Airbnb, Inc. The company is an online service that provides a platform for individuals referred to as “hosts”, generally private parties, to rent unoccupied living space and other short-term lodging to guests. As of November 2012, the company had over 250,000 listings in 30,000 cities and 192 countries.Listings include private rooms, entire apartments, castles, boats, manors, tree houses, tipis, igloos, private islands and other properties.

Users of the site must register and create a personal online profile before using the site. All properties are associated with a host whose profile include recommendations by other users, reviews by previous guests, as well as a response rating and private messaging system.

As of July 2011, the company has raised $119.8 million in venture funding from Y Combinator, Greylock Partners, Sequoia Capital, Andreessen Horowitz, DST Global Solutions, General Catalyst Partners   and an undisclosed amount from A Grade Investments’ partners, Ashton Kutcher and Guy Oseary.

Shortly after moving to San Francisco in October of 2007, Brian Chesky and Joe Gebbia created the initial concept for AirBed & Breakfast during the Industrial Design Conference held by Industrial Designers Society of America.  The original site offered short-term living quarters, breakfast and a unique business networking opportunity for attendees who were unable to book a hotel in the saturated market.

At the time, roommates Chesky and Gebbia could not afford the rent for their loft in San Francisco. They made their living room into a bed and breakfast, accommodating three guests on air mattresses and providing homemade breakfast.
In February 2008, Harvard graduate and technical architect, Nathan Blecharczyk joined as the third co-founder of AirBed & Breakfast.  During the company’s initial stages, the founders focused on high-profile events where alternative lodging was scarce.  The site, “airbedandbreakfast.com” was officially launched on August 11, 2008.

To help fund the site, the founders created special edition breakfast cereals, with candidates Barack Obama and John McCain as the inspiration for “Obama O’s” and “Cap’n McCains”. In two months, 800 boxes of cereal were sold at 40 dollars each which generated more than 30 thousand dollars for the company’s incubation  and attracted Y Combinator’s Paul Graham.

After its inauguration, the site expanded to include properties in the market between hotels and CouchSurfing. In January of 2009, Y Combinator invited Chesky, Gebbia and Blecharczyk to join the incubator’s winter session for three months of training.   With the website already built, they used the $20,000 Y-Combinator investment to fly to New York to meet users and promote the site.   They returned to San Francisco with a profitable business model to present to West Coast investors.

Name change and growth
In March of 2009, the name Airbedandbreakfast.com was shortened to Airbnb.com, and the site’s content had expanded from airbeds and shared spaces to variety of properties including entire homes and apartments, private rooms, castles, boats, manors, tree houses, tipis, igloos, private islands and other properties.
One year later, there were 15 people working from Chesky and Gebbia’s loft apartment on Rausch Street in San Francisco. To make room for employees, Brian Chesky gave up his bedroom and lived through the Airbnb service until the company moved into its first office space. 

The company continued to experience rapid growth through the year and in November of 2010 raised $7.2 million in Series A funding from Greylock Partners and Sequoia Capital, and announced that out of 700,000 nights booked, 80% had occurred in the past six months. 

By February 24, 2011, one million listings were booked through Airbnb and revenue from the month earlier had increased by 65%.   On May 25, 2011, actor and partner at A-Grade Investments, Ashton Kutcher, announced a significant investment in the company and his role as a strategic brand advisor for the company.

In May 2011, Airbnb acquired a German competitor, Acceleo. This acquisition launched the first international Airbnb office in Hamburg.   Then, in October 2011, Airbnb established its second international office in London.

Given the growth of international users, Airbnb opened 6 additional international offices in early 2012. These cities include Paris, Milan, Barcelona, Copenhagen, Moscow, and Sao Paolo.   These are in addition to existing offices in San Francisco, London, Hamburg, and Berlin where Airbnb maintains its international presence for the EMEA markets within a German incubator space.

At the beginning of November 2012, Chesky announced his focus on Australia, the second largest Airbnb market behind the United States, as well as Thailand and Indonesia. To support this effort, Airbnb opened its 11th office in Sydney.The Australian consumer accounts for one-tenth of the Airbnb user base.

Weeks after announcing the focus on Australia, Airbnb announced its strategy to move more aggressively into the Asian market with the launch of their newest headquarters in Singapore. The company's goal is to acquire an additional 2 million properties within the continent.

The Airbnb founding team acts as the key managerial staff for Airbnb Brian Chesky, Co-Founder and Chief Executive Officer; Joe Gebbia, Co-Founder and Chief Product Officer; and Nathan Blecharczyk, Co-Founder and Chief Technical Officer.
Airbnb has its twelve offices in Barcelona (Spain), Berlin (Germany), Copenhagen (Denmark), Hamburg (Germany), London (UK), Milan, (Italy), Moscow (Russia), Paris (France), San Francisco (US), Sao Paulo (Brazil), Singapore, and Sydney (Australia).

Airbnb’s primary revenue comes from service fees from bookings. Fees range between 6% and 12% depending on the price of the booking. Airbnb also charges the host 3% from each guest booking for credit card processing.

In February 2011, Airbnb announced its 1 millionth booking since its inception in August 2008.Then, in January of 2012, Airbnb announced its 5 millionth night booked internationally through the service.   Of these bookings, 75% of the business came from markets outside of the continental United States. In June 2012, the company announced 10 million nights booked doubling business in 5 months.

Since mid 2011, Airbnb has acquired several of its competitors. The first of which was Accoleo based out of Hamburg. This became the company's first international office.

Prior to the 2012 Summer Olympics, Airbnb acquired London-based rival CrashPadder, subsequently adding six thousand international listings to its existing inventory. This acquisition made Airbnb the largest peer-to-peer accommodations website in the United Kingdom.

Airbnb acquired NabeWise, a city guide that aggregates curated information for specified locations, in November 2012. This acquisition shifted the company focus toward offering hyperlocal recommendations to travelers.

In December 2012, Airbnb announced the acquisition of Localmind.Localmind is a location-based question and answer platform that allows users to post questions about specific locations online. These questions are then answered in by experts on the specified territories.

Airbnb is an online marketplace for vacation rentals that connects users with property to rent with users looking to rent the space. Users are categorized as “Hosts” and “Guests;” both of which must register with Airbnb using a valid email address to build a unique user profile on the website. Profiles include details such as user reviews and shared social connections to build a reputation and trust among users of the marketplace.Other elements of the Airbnb profile include user recommendations and a private messaging system.

In addition to providing personal information, hosts display listing details including price per night, amenities, house rules, imagery, and detailed information about their neighborhood.

Since 2008, the website has developed to include social connections pulling data from social networking services such as Facebook. As of May 2011, the site uncovered over 300 million connections between Airbnb and the Facebook user groups.

It is free to create a listing using Airbnb. Users fill out form with initial details. Changes can be made at a later date. The listing will not go live until the user is ready to publish. Pricing can be determined by the user. User can charge different prices for nightly, weekly, and monthly stays as well as seasonal pricing. Users can use the Titles and Descriptions section to advertise their space. They can outline house rules or other descriptions regarding the residence. Airbnb allows users to publish up to 24 photographs of the place. Airbnb, on a limited basis, is offering free professional photography in most of the listed areas. Profile is a place where the guests can research more about the users. This section is often used for users to display who they are as well as their philosophies on hosting.

Users can communicate easily with potential guests. Guests are required to message the user directly through Airbnb to ask questions regarding the property. Users have 100% control over who books their place. When a potential guest puts in a reservation request, the host has at least 24 hours to accept or decline the request.
 
After user accepts a reservation, they can coordinate meeting times and contact information with guests. Reviews are the backbone of Airbnb. After the reservation is complete, users are encouraged to leave a review. Reviews help build validity and references both for the guests and the users. 
In addition to the Airbnb website, the company offers mobile applications for iOS and Android customers. As of September 2012, users had downloaded the mobile application over 1 million times which accounts for over 26% of the company’s overall traffic.

Through the mobile channel users have all functionality of the website which includes private messaging making communication three times faster between users. The application also allows users to find listings based on what is available using geolocation.

In December 2012, Apple honored Airbnb with the Editor's Choice award for the Best Mobile Application of 2012 in the UK market. Airbnb was also awarded Most Disruptive Service of 2012.

Security
Airbnb user profiles contain recommendations, reviews, and ratings to build credible online reputations within the platform. Additionally, the site provides a private messaging system as a channel for users to message one another privately before booking and accepting reservations.Hosts are never required to accept a reservation. After the guest has checked out, the parties review one another to build website credibility similar to online marketplaces like eBay.
Airbnb facilitates online payments from guest to host through its Security Payments feature which processes payment transactions 24 hours after check in.   This protocol offers a guarantee for guests and helps to uphold host cancellations policies before processing payments. Additionally, the Airbnb website facilitates security deposits and cleaning fees, the former of which is held until the property is vacated.The company’s revenue comes from a 6% to 12% commission of the guest payment and 3% of what the host receives.

Wish Lists
In June 2012, Airbnb launched a wish list feature offering users the ability to create curated catalog of desired listing they would like to visit.   Co-Founder and Chief Product Officer, Joe Gebbia and his team conceived the idea of changing the website from an online marketplace to a source for aspiration. Users can curate their favorite destinations into organized lists and share these with other users.   Since the launch of the Wish List functionality in June 2012, engagement with the Airbnb website increased by 30%. 45% of users engage with Wish Lists and had added over 1 million accommodations to personalized lists.

In creating Wish Lists, the product team designed a proprietary scrolling source code which allows users to engage with these lists without the website slowing down the user experience. Additionally, Airbnb open sourced the code, Infinity.js to the software developer community.

Neighborhoods
In November 2012, Airbnb launched the Neighborhoods product.This travel guide helps travelers choose to the ideal neighborhood match based on a series of collaborative filters and attributes such as Great Transit, Dining, Peace & Quiet, Nightlife, Touristy, and ShoppingCurrently, the Neighborhoods product is enabled for San Francisco, New York, London, Paris, Berlin, Washington, D.C., and Rio de Janeiro giving in-depth information for selected neighborhoods in these cities through photos, essays, maps, tags from locals, and assessments of public transportation.

The Airbnb product team hand-mapped 300 neighborhoods within these seven cities and had local editors curate content for each neighborhood. Airbnb also added 70 street photographers who generated 40,000 photographs for the project.