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Monday, Nov 9, 2009
The CEO of eBay presides over a company worth more than four times as much as Kmart. Maybe there's something to this e-commerce thing after all.
Nov 27, 2001 | When Meg Whitman took over as chief executive of eBay some three years ago, she set about her work with her usual mixture of know-how and curiosity. She knew she had to build the eBay brand. But she also listened to the auction site's founders and conferred closely with them. Her style -- collaborative yet decisive, serious but loose -- set the tone for the company.
Sure, Amazon.com founder Jeff Bezos was Time magazine's man of the year, and Tim Koogle was the new-media savant who made Yahoo the top Web portal, but Whitman was the old-fashioned, low-key manager. And the tortoise has beaten the hares. Yahoo has slipped from profitable to unprofitable, and Wall Street wonders if the never-profitable Amazon.com will survive. But eBay is doing fine; Wall Street complains that its stock is too expensive, but the company is worth more than four times as much as Kmart, and Whitman is leading it into its sixth very profitable year in a row.
Now, the down-to-earth Whitman is starting to get her due. Worth magazine named her No. 5 on its list of "best" CEOs. Fortune magazine ranked her the second most powerful woman in business, behind Hewlett-Packard chief Carly Fiorina and right ahead of Oprah Winfrey. All this, without the star-quality charisma of Fiorina or the electric energy of Amazon.com founder Jeff Bezos. Instead, Whitman still works in what amounts to a large cubicle, dresses casually and sometimes responds personally to customer e-mails. That's despite owning more than $600 million worth of eBay stock.
While dot-com bubbles are bursting all over, Whitman runs an international e-commerce giant whose customers used eBay's person-to-person auctions to sell $2.36 billion worth of Beanie Babies, baseball cards and other merchandise in the three months ended Sept. 30 (which means the eBay economy is larger than that of Iceland). Meg Whitman stands as the most successful Internet executive of all.
Although Whitman didn't invent eBay, she did usher it from a start-up to a powerhouse. Since taking over as CEO in May 1998, she kept eBay focused on its core competencies. Any expansion was gradual and auction-related, from acquiring similar online-auction companies overseas to buying Half.com, a marketplace for selling used goods at set prices. She kept the company concentrated on what users would want, either as a permanent enhancement or a one-day special offering. From the start, she understood what makes the company tick. "What is really interesting about eBay," she told one interviewer, "is that we provide the marketplace, but it is the users who build the company. They bring the product to the site, they merchandise the product and they distribute it once sold."
Indeed, Wall Street observers claim that eBay runs so smoothly, it's difficult to point to what management has done. Whitman's contribution is, to some extent, taken for granted. Her lack of dot-com flamboyance shouldn't obscure the fact that she's always been driven -- even in college she had the Wall Street Journal delivered to her Princeton dorm room. Her low-voltage but efficient style is precisely what makes Whitman a business executive worth praising.
Margaret C. Whitman took an offline route to her online triumph. Born in 1957, the Long Island native graduated from Princeton University in 1977, then got her MBA at Harvard in 1979. She started her career in brand management at Procter & Gamble, a sort of school for brands and a great breeding ground for future Internet executives, including America Online co-founder Steve Case. Whitman then worked for eight years at consulting firm Bain & Co. From 1989 to 1992, she was an executive at Walt Disney, where she opened the first Disney stores in Japan and learned the basics of how to make a business run smoothly. She then moved to shoemaker Stride Rite, where, among other accomplishments, she helped revive the Keds brand.
Whitman got her first real taste of the spotlight in 1995, when she joined Florists' Transworld Delivery (FTD), initially as president and then as CEO. Whitman oversaw FTD's conversion from a money-losing, florist-owned cooperative to a profitable private company, and she rejuvenated the FTD brand. But infighting at FTD frustrated her, and she left to head Hasbro's Playskool division. About a year later, a headhunter approached her about a top job at eBay.
