Meg Whitman's Exit Interview

meg-whitman.pngI just got off the phone with Meg Whitman, eBay’s departing CEO, and John Donahoe, her successor. Whitman talks about her biggest successes (going global and buying Paypal) and her biggest mistake (losing Japan), gets a dig in at Skype’s founders, and ruminates about whether Facebook can become a platform for commerce. Donahoe talks about eBay’s renewed focus on fixed-price items, its commitment to distribute listings across the Web, and how he sees those listings as a huge advertising inventory. Here is the interview:

Q: If you had to pick one thing you did over the past decade, what was your best move?

Meg Whitman: I would say that the best move was that Pierre’s idea was a really good idea: using the Web to empower regular people and small businesses to do commerce. For me, the international expansion of eBay was the best idea. We are now in 35 countries, and have a huge global network. The second best one was the acquisition of PayPal—the wallet on eBay.

Q: What was your biggest mistake?

Whitman: I am not one for regrets, but I still regret we don’t have a presence in Japan.

Q: What about buying Skype?

Whitman: We liked Skype and still like Skype as a standalone business—a $400 million, four-year-old. Skype is doing more business as a four-year-old than eBay, Yahoo, or even Google did. We saw potential synergies between Skype and eBay. The next year or so will prove out if we were right. We’ve only had our management team in there for three months. Prior to that we had the founders, who are brave individuals, but were motivated by the earn-out.

Q: If you were starting out at eBay now in 2008 instead of 1998, what would you do differently?

Whitman: Guess what? The world changes. eBay has defined e-commerce. But John recognizes we are going to in many ways reinvent eBay.

John Donahoe: Buyers and sellers have more choices and higher expectations than in 1998, but the guiding principles are the same—the best values, the widest and most abundant selection, and a fun shopping experience. We will make it easier and safer to shop on eBay. The second thing we are going to do is build on this fabulous auctions business that is unique and is the best format for many items.

But we have used an auction approach for fixed price. We are not optimized to get those values in fixed price. Time-ending-soonest makes sense in auctions, but does not surface the best items in fixed price.

Q: eBay, along with Amazon and Yahoo, is now one of the elder statesmen of the Web. Do destination sites matter anymore?

Whitman: My view is that, just as in many businesses, brands really matter. There will always be a role for destination sites. Eighty million users come to our destination. I think that will be the vast majority of our future business.

That said, we must be in distributed commerce in the future, taking listings for auctions and and distributingthem to other sites. If they ar not going to come to us, we are going to come to them. We are not at all averse to distributed commerce.

Donahoe: In many ways, our buyers will lead us there. We are making it much easier to bring eBay listings to your Facebook page, Myspace page, and shopping listings to various sites. eBay’s unique inventory offers better alternative [than other sources].

Whitman: Here is the interesting thing that I wonder about. You look at the tremendous success of Facebook. To my mind there is not a lot of commerce going on in these social networking sites. eBay is a community anchored in commerce. It is a commerce site that built a community around it. What has not been proven is if the reverse can happen and people will go to community sites to do commerce.

Donahoe: In payments, we are enabling faster checkout and easier payment on thousands of Websites off of eBay. In reputation, we think that reputaion is something we can increasingly outtake.

Whitman: We wonder if there is a way to embed reputation into Paypal. Is there a way to travel across the Web with your Paypal wallet and some other aspect of reputation?

Q: Do you want to get into the advertising game?

Donahoe: You could say we are already in the advertising game with millions of listings a day and expanding that with other advertising on eBay and off. We have our Yahoo and Google partnerships and we will continue to find ways to get our listings out there.