Meg Whitman,President and chief executive officer, eBay.Begun in 1995, eBay was the brainchild of Pierre Omidyar, a computer programmer from San Jose, California. Omidyar launched the site as a means for his girlfriend, who collected Pez candy dispensers, to contact other collectors to buy, sell, and trade. The premise was simple: for a $3 fee paid to eBay, then called Auction Web, a seller could list an item for auction. Potential buyers could then bid on the item, with the highest bidder winning the auction. Omidyar's idea proved so successful that soon people were listing items other than Pez dispensers. The site also fostered a strong sense of community among those who participated. To prevent scams and fraud, Omidyar instituted message boards where buyers and sellers could rate each other. By 1997 the site was attracting more shoppers than any other site on the Web. The company began charging a 6 percent commission on all items listed and by 1998 had grown to 20 employees.
The company became too big for Omidyar to handle by himself. In March 1998, eBay approached to Whitman. For remaking a company, one of Whitman's first tasks was to make the eBay site more professional and more profitable. One of her first personnel moves was to hire Brian Swette, head of marketing at Pepsi, to take charge of eBay's marketing division. She redid the Web-site graphics, making the designs brighter and separating firearm and pornography offerings into age-restricted areas. (eBay has since discontinued the sale of firearms along with alcohol, tobacco, drugs, and human organs.) In 1999 Whitman negotiated the purchase of Butterfield & Butterfield, a 134-year-old auction house in San Francisco that ranked a distant third behind more notable houses Sotheby's and Christies. With the purchase of Butterfield & Butterfield, eBay moved into the business of auctioning fine art and expensive collectibles. Still, Whitman's changes threatened to alienate smaller buyers and sellers who had played such an important role in building eBay.
While trying to court the small buyers and sellers, Whitman also pushed to expand the company's boundaries. She persuaded stores to sell on eBay, and began to offer specialty items under the eBay umbrella, a strategy she had developed at FTD. On September 24, 1998, eBay went public, with the initial public offering selling at $18 a share. By day's end, eBay stock closed at $47, an increase of 163 percent. Whitman was a millionaire. The initial public offering also thrust her into the limelight as the CEO of one the fastest-growing Internet companies in the world.
To help eBay move into other markets, Whitman also negotiated the purchase of Kruse International, a collectible car house, and Alando de AG, the largest online-auction house in Europe. By the end of the third quarter 1999, eBay reported sales of more than $741 million, up from just $195 million the year before. The company had also virtually cornered the online-auction business, accounting for 90 percent of all on-line-auction sales. Even though its earnings fell short of projections, the company managed to accomplish what many other high-profile Internet companies such as amazon.com could not: eBay made a profit.
Whitman credited much of eBay's success to its basic business model, which combined the elements of yard sales, newspaper classified ads, and auctions. This approach appealed to a wide spectrum of customers, from those who list yard-sale finds to large companies such as movie studios that auction off memorabilia to dealers who specialize in items from books to electronics and office equipment to collectibles and antiques. Whitman perfected the model: the company's role was simply to bring buyers and sellers together and to facilitate commerce. eBay carries no inventory nor does it ship items. The success of the site rests solely with its users. Though by auction-house standards the fees that eBay charges are low, often amounting to as little as 6 percent on each sale, almost all the monies generated are pure profit. As Whitman has pointed out, the eBay model works perfectly for Internet commerce geared as it is to high volume and low overhead. Although the business model has proven to be a gold mine, many analysts are quick to point out that eBay would likely not have succeeded had it not been for Whitman's efforts and expertise. For Whitman, the Internet and e-commerce was the wave to the future, and she continued to work to ensure that eBay would serve its customers and remain a major force in the global marketplace. 
Sources for Further Information "CBS MarketWatch Names eBay's Meg Whitman as its First CEO of the Year," Business Wire, September 18, 2003, p. 56.
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