eBay Inc, the internet-based one-to-one auction service has appointed an experienced consumer brand manager as its president and chief executive with company founder and former CEO Pierre Omidyar becoming chairman. The new CEO, Meg Whitman was formerly general manager of Hasbro Inc’s preschool division, responsible for management and worldwide marketing of brands such as Playskool, Mr Potato Head and new kids on the bloc, Teletubbies. Prior to that she was president and CEO of FTD Inc, and oversaw the transition of the company from a florist-owned concern to a private company. She also launched the company’s online service. However, Whitman does not claim to be any internet expert, but that is not why she was hired. Omidyar, who conducted the search himself, said Whitman was brought on board purely for her consumer brand management experience. eBay is a forum for auctions between collectors and hobbyists. It differs from rival Onsale Inc, which concentrates on business-to- consumer transactions. It also differs from Onsale, says Omidyar, because it is bigger, but it has only overtaken Onsale in the quarter just ended in terms of sales. The company claims some 750,000 registered members and recorded gross merchandise sales of $100m in the first quarter of this year. That’s compared with $44m in the previous quarter and $94m for the whole of last year. The company has enjoyed a compound monthly growth rate in terms of sales of 30% since its launch on Labor Day 1995. In comparison, Onsale recorded gross merchandise sales of $115.9m last year, but only $50m last quarter. Onsale has about 250,000 fewer members at the moment. Also, Onsale is now recording small losses, while Whitman claims eBay has been profitable since nine months of launch. She said the company is not looking for financing at the moment. We don’t need the money, she said, adding that there is no need at the moment to make any decision about whether or not to go public. Whitman, who is relocating from the east coast to eBay’s San Jose base said the company has enormous growth prospects and an enormous depth of attachment among its user community. She intends to concentrate on the marketing message for the next six months, including internet advertising and traditional print, radio and TV ads. The focus will be on raising the profile among the hobbyists and collecting communities that have been the mainstay so far. She also intends to build out the organization, particularly below the vice president level. The company currently has 62 employees plus about 30 customer service contractors. Onsale recently announced its move into the one-to-one auction market from its many-to-many commercial operation with its Onsale Exchange site. Whitman didn’t think there was a risk of inventory drying up by being spread too thin, considering eBay gets 60,000 new items a day posted for sale. Plus eBay has the advantage of being first out of the blocks, she said. It gets about nine million page views a day and only carries minimal advertising at the moment. She does not intend to expand the level of on-site advertising much at present for fear of alienating the online community and slowing the site down. Omidyar said the company will expand each sector’s web site over the coming months. He admitted the site might be a bit slow at the moment: he said it’s incredibly difficult to build a scalable system to handle the kind of traffic eBay gets. Media Metrix puts it third behind yahoo.com and aol.com in terms of the amount of time spent on its site at present. Incidentally, the company’s contract with America Online Inc expires in 30 days and the company must then decide whether to renew it. At present eBay is featured in AOL’s hobby and classifieds area, although the former has been more successful for eBay, said Whitman.
