Meg Whitman

Among Whitman's key achievements was fending off the competition. As authors David Yoffie and Mary Kwak point out in their book "Judo Strategy," Whitman was mindful of America Online, Amazon.com and Yahoo, because any one of these might have plunged into online auctions and crushed eBay early on. So when Whitman's team deepened the company's relationship with AOL to eventually make eBay AOL's exclusive auction provider, it wasn't just a great way to connect to AOL users -- it also forestalled AOL from becoming a rival.

That bought eBay time, which was crucial because the site was building critical mass. The large customer base meant eBay was the place to sell; more sellers attracted more buyers; that attracted more sellers; and so on. eBay achieved what business pundits call "The Network Effect": the network becomes more valuable to its users simply by adding more users. The Internet is the perfect example of this, but eBay may be a close second.

Yahoo threatened the company in late 1998 by offering free auctions. But eBay didn't drop its costs. Whitman and her team discovered that eBay's small fees discouraged people from listing any old junk, so it provided a measure of quality control that Yahoo didn't have. By the time Amazon.com tried auctions in 1999, eBay already had a solid lead. To Whitman, Amazon.com's only advantage was its prodigious credit-card processing capabilities. So later that year, Whitman decided to buy Billpoint, an online system that allows payments by e-mail.

Although eBay has been under the gun for years, Whitman remains a steady presence. Colleagues describe her as consistently upbeat. It seems she draws strength from her other passion, her family. Fortunately, her husband now works at nearby Stanford University Medical Center. She likes to escape to his family farm in Sweetwater, Tenn. She goes fly-fishing a few times a year -- and yes, she's bought fly-fishing equipment on eBay. That's in addition to the Beanie Babies, Pokemon cards and even a car that she purchased there.

Whitman may be calm, but she's ambitious. So even as she moves quickly to defend her company's turf, she's also looking to broaden it. For example, she wants to expand eBay overseas; just this year she bought iBazar (which has online auction sites in eight European countries) and made moves in New Zealand, Korea and other countries.

Still, she eschews top-down command tactics that assume she knows everything. Instead, she remains open to opportunities. For example, customers gravitated toward the fixed-price sales of Half.com, as opposed to auction sales. So Whitman championed fixed-price sales on the site, and those may one day put eBay on top of Amazon as the Web's biggest retailer.

Even eBay isn't immune to hubris. Whitman says eBay aims to more than triple its annual revenue to $3 billion by 2005, and Wall Street considers that implausible. Yet in her professional hands, that claim isn't so much a dot-com boast but a CEO setting the bar high for her team. So let others try to revolutionize media or make bookstores obsolete, while Whitman keeps her eye on the bottom line. Because in the long run, Meg Whitman's success reminds people that this e-commerce thing may just work after all.

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