AN JOSE, Calif. -- Ten heads nodded in unison around a long conference table as Rob Veres pointed to a large computer display. The scene was the latest of eBay's "Voice of the Customer" sessions, a brainchild of its chief executive, Meg Whitman. A cross-section of those who buy and sell over this huge online bazaar had been invited to eBay's headquarters here to spend two days talking to its executives.
In one session, Mr. Veres, a product manager, showed proposed improvements to a feature called "Mr. Lister," which lets users put dozens of items up for sale at the same time. There were murmurs of praise. Then Mr. Veres brought up an option that would let sellers specify that an auction would not start until a later date.
That was fine, too, the group said, until Mr. Veres said eBay was thinking of charging 10 cents for each delayed auction.
Cries of outrage erupted.
"Ten cents means a lot to me," said George Ward, who sells jewelry and aviation headsets over eBay.
A dime? Who cares about a dime these days? On eBay, where grandmothers in nursing homes sell side by side with I.B.M., someone cares about everything. Ms. Whitman has forced eBay to care about them.
That goes a long way to explaining why eBay, on Ms. Whitman's watch, has become what Lauren Levitan, a Robertson Stephens analyst, calls "the most successful Internet company left."
During the Internet boom, the precise and low-key Ms. Whitman was upstaged by flamboyant technologists and entrepreneurial visionaries in other companies. But eBay's diverse and ornery community of buyers and sellers provided all the color the company needed, as well as its engine of growth and the source of the auction fees that made it profitable from the start. As it turned out, what eBay — like a lot of dot-coms — needed most was the sort of disciplined management practiced by Ms. Whitman, now 45. She steered clear of many seemingly lucrative opportunities, and instead kept eBay focused on nurturing its trading community, expanding its ranks and the scope of goods it deals in.
So as eBay ponders how high it can go, the ultimate question is just how much business can truly be done by people in attics and garages.
EBay certainly benefited from the great idea of its founder, Pierre M. Omidyar, and the powerful forces that draw buyers and sellers to the most active marketplace. But Ms. Whitman's many fans say she did much more than ride the rocket ship.
"There are a lot of guys who had good ideas, were first, and raised $1 billion who are now out of business," said Richard Perry, president of Perry Capital, the New York hedge fund that hired Ms. Whitman to be chief executive of FTD, the flower company, in 1995. "What Meg has done has taken a brilliant idea, and with execution, monitoring and constant improvement, made it infinitely bigger."
Indeed, today eBay is far more than a fad, far more than what it started as — a trading post for Beanie Babies and other collectibles. Now two-thirds of the site's sales are for practical goods. This year, eBay expects to sell $2 billion worth of used cars and $1 billion worth of computers. Coming next are event tickets, food, industrial equipment and real estate. Last week you could buy a five-acre parcel in Hualapai Highlands, Ariz., for $3,000 and a classic 1966 Caterpillar D9 bulldozer to clear it for $12,000.
Even as growth has slowed for the handful of dot-coms that survived the explosion of the Internet bubble, Ms. Whitman remains committed to the goal she set in the froth of 2000: Revenue in 2005 of $3 billion and profits of $600 million. That implies that eBay will have to see total sales of $30 billion to $40 billion, more than those of J. C. Penney.
To reach her target, Ms. Whitman will need to continue to expand the range of merchandise eBay sells and build its network of sites in 14 foreign countries. More difficult, she wants a third of eBay's business to be fixed-price sales, offering the convenience and instant gratification offered by Amazon.com, rather than the excitement of auctions. So far results are mixed. Some 20 percent of eBay's sales use its new instant-purchase "buy it now" feature. But Half.Com, a site it bought that sells used books and such at fixed prices, is being trounced by a copycat offering by Amazon.
Then again, eBay has enviable profit margins and no debt, compared with the heavily indebted Amazon. It may be nothing more than a coincidence, but eBay's managers are largely in their 40's. At Amazon, a majority of the top executives are in their 30's, reflecting the generation of its 37-year-old founder, Jeff Bezos.
Experience is the hallmark of Ms. Whitman, who, after getting an economics degree from Princeton and an M.B.A. at Harvard, stamped her corporate passport at Procter & Gamble, Disney, Bain & Company, Stride Rite, FTD, and Hasbro before coming to eBay in 1998. She had already developed a reputation as an able manager when Mr. Perry recruited her to try to soothe the feathers ruffled when FTD converted from an association to a profit-making company. She developed an emotional advertising campaign and then sold it to FTD's affiliates.
"Meg was willing to mix it up with florists all over the world," said Mr. Perry. "She would shake their hands and kiss their babies." As eBay has thrived, Ms. Whitman has moved into the corporate mainstream. She was invited to be on the board of Goldman Sachs, and accepted. And in February she promised to give $30 million to Princeton to build Whitman College, a new undergraduate dormitory. She and her husband, Griffith R. Harsh, a professor of neurosurgery at Stanford, have two teenage sons.
At eBay, Ms. Whitman is known for delegating responsibility to other managers and focusing on strategic issues. But she will dive into details when things go awry. For example, she took over eBay's computer operations in 1999 after a series of computer crashes threatened to derail its business.
At management meetings, Ms. Whitman insists that all the other executives voice their opinions on troublesome issues before she expresses her own. By all accounts she listens carefully but does not hesitate to overrule her colleagues. In 2000, for example, she vetoed a deal to buy iBazar, a European auction site that was beating eBay in France and Italy. The price tag approached $1 billion — too much, she felt. The next year, eBay was able to buy it for closer to $126 million.
Financial prudence, in fact, is another Whitman hallmark. Earlier this year, she began a round of cost cutting with some modest layoffs. There was no budget hole that needed to be filled, she insisted. Rather, any company that had grown from 50 to 3,000 employees in four years was bound to have some fat that could be trimmed. But most of all, Ms. Whitman understood that eBay needed to limit its expansion to areas that also benefited customers, or the "community."
"People were worried that auctions were becoming the Wild West," said Rodrigo Sales, chief executive of AuctionWatch.com, which provides tools to eBay sellers. "Ebay has walked the fine line between being a free venue and creating regulation to rein in the excesses."
Ms. Whitman, in fact, has made tough choices. She turned down advertising deals in the late 1990's that could have doubled eBay's revenue because advertisers competed with eBay sellers. (EBay does take some advertising.)
"Meg never got seduced by the easy money," said Robert C. Kagle, a partner at Benchmark Capital, which provided the early financing for eBay. "She understood that if you put up too many billboards in a neighborhood, people wouldn't want to be there."
And in 2000, she walked away from a $30 billion buyout offer by Yahoo hours before it was to be announced because she felt the eBay community was not going to be given enough prominence. "We didn't just want to be auction functionality for Yahoo's shopping channel," Ms. Whitman said.
