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Meg Whitman, who retires Monday, to join McCain's presidential campaign
Grace Leong
Meg Whitman, the Silicon Valley corporate legend who helped make eBay a household name worldwide, had serious misgivings when she took her first look at the San Jose, Calif. company's then fledgling online auction site in 1997.
At the time, half of the eBay Web site was dedicated to the Ebola virus, a passion of eBay founder Pierre Omidyar, while the other half was an online auction site where people sold collectibles such as Beanie Babies. But she was hooked when she saw how users were so addicted that they slipped out of business meetings to monitor their auctions.
"Pierre's vision enabled people to trade without regard to time and distance on a system based on trust," Whitman said at a luncheon hosted by Utah Technology Council at the Salt Lake Community College on Friday. "And that was the magic."
Making one of her final public appearances as eBay's president and CEO before retiring from the position on Monday, Whitman, 51, shared lessons and strategies she has learned during her career with more than 250 Utah business and government leaders on Friday. She will remain on the board for eBay, whose revenues are projected to be between $8.5 billion and $8.75 billion in 2008.
"Disruptive ideas are vital," she said, describing the concept of eBay as a "disruptive" force that has resulted in the creation of a global online marketplace that sells $2,039 of merchandise per second, or $16.2 billion in gross merchandise volume in the fourth quarter of last year. "It is a challenge to constantly redefine ourselves. But we have to or we risk having someone else do it for us."
Today, that "disruptive" idea has mushroomed into a thriving business that enables 276 million people worldwide to trade, pay and communicate online, and is also the world's ninth largest retailer with $59 billion in merchandise volume last year.
Citing a June 2006 survey by ACNielsen, Whitman said there are about 1.3 million sellers worldwide including 2,500 in Utah who make their living selling their products on eBay. There were 637 million new listings added to eBay worldwide in fourth quarter 2007. At any given time, there are about 113 million listings worldwide, and about 6.7 million listings are added per day, with eBay users trading in more than 50,000 categories.
Also critical to eBay's dramatic growth was its acquisition of related companies including PayPal, an online payment service, in 2002, and Skype, an Internet phone service, in 2006.
PayPal, which today accounts for 40 percent of eBay's $30 billion market capitalization, provided an online payment system that made it easier for eBay's users to make their purchases, while eBay provided the person-to-person transactions that PayPal needed to grow. Skype, which also saw enormous user growth, accounted for $115 million of eBay's total revenues in 2007.
But how did eBay continue to grow its business over a long period of time?
By keeping its work force nimble, and to do that, reorganizing early and often is key, Whitman said.
"Every three to six months, we will change a large chunk of our workforce. That is not always popular with people, because most of them don't like change. But when you change people out, you get a fresh set of eyes or perspective," she said. "What we try to do is give people what we call a career adventure. We select people who like change and ambiguity."
Case in point, the e-commerce company earlier this month reorganized employees so they work on global teams that report up to one person. Under the new structure, groups that had once worked separately -- such as the customer-service groups for the auction and marketplaces business unit and the PayPal online payment unit -- are merged.
As part of the restructuring, 125 people were laid off.
But the restructuring shifts more people and resources into areas aimed at improving eBay's auction marketplace. The reorganization of the customer-service group, for instance, helps make the auction Web site more appealing to merchants, who pay fees that generate revenue for eBay, and buyers, who need to return to the site to keep attracting sellers, the company said.
Whitman also emphasized the importance of "hiring the right person for the right job at the right time, and who has the right values." This can be a challenge when the company is rapidly growing and job responsibilities multiply.
To that end, it is critical to hire "ahead of the curve" or hire people who can handle a bigger job than what they're required to do initially, so that as the company grows, they'll be able to manage the growth. "You have to hire people to whom your company can grow to. That makes all the difference," she said.
And with eBay growing from a trading site with just 30 workers and $4.7 million in revenues in 1998 to a company with 15,500 workers and $7.7 billion in revenues today, maintaining both internal and external communications at all levels becomes more critical, she said.
Wallace Harkness, director of sales and marketing at Wolf Electronix in Orem, found Whitman's tips on hiring and managing growth interesting.
"I loved her focus on mixing things up every three or four months, and her views on hiring ahead of the curve were insightful, especially since it helps your perspective take on a new depth. But we're a much smaller company, not an $8 billion company like eBay. Reorganizing often, and moving leadership roles among different divisions -- I don't know if we can implement that at Wolf," said Harkness, who attended Friday's event.
"But we can definitely implement better internal and external feedback channels. In fact we're doing that already. Wolf recently spent $2 million in upgrades after listening to feedback from its workers and customers," he said.
Now that her career at eBay is drawing to a close, what's next for Whitman?
"2008 is all about [Republican presidential candidate] John McCain, and we'll see what happens after that," she said on Friday.
Whitman was tapped earlier this month by Sen. McCain, R-Ariz., to join his November presidential campaign as national co-chair in an effort to boost his economic credentials and fund-raising abilities. Former Hewlett-Packard CEO Carly Fiorina, who campaigned for McCain in the primaries, was also tapped to lead the party's fundraising efforts for the campaign.
Whitman is also said to be quietly exploring the possibility of a 2010 run for California governor, after getting her first taste of politics fundraising for former Massachusetts Governor Mitt Romney, who dropped out of the presidential race in February. Her association with Romney dates back to his days at consulting firm, Bain & Co., in the late 1970s.
"He and I worked at Bain & Co. for 10 years," Whitman said. "When his campaign folded, John McCain called me to join his campaign and so, I signed on." |
