INDIRIZZO DI STUDI: Amministrazione Finanza e Marketing

DISCIPLINA: English
ANNO DI CORSO: 4

QUELLA CHE SEGUE E' UNA ESERCITAZIONE SU UN ARTICOLO

COMPARSO SU UN GIORNALE ONLINE. NEL LEGGERLO TROVERAI
FORSE QUALCHE DIFFICOLTA' MA L'OBIETTIVO DELLA SEGUENTE
UNITA' DIDATTICA E' QUELLO DI COGLIERE IL SENSO GENERALE DI UN
TESTO AUTENTICO E CIOE' NON APPOSITAMENTE PREPARATO PER
UNO STUDENTE, MA DISPONIBILE NELLA CULTURA DEI MADRELINGUA.
UNA VOLTA LETTO IL TESTO E TRADOTTE LE PAROLE SCONOSCIUTE
PROVA A RISPONDERE ALLA SEGUENTE DOMANDA : HOW HAS E-BAY
CHANGED THE WORLD ?

Reading comprehension
Plain brick beginnings

On a sunny afternoon, Omidyar (pronounced "oh-MID-ee-ar"), Whitman and Griffith

gather in a conference room that looks out over that business park — plain brick
buildings perked up by eBay's primary-colors lettering.

The triumvirate seem to have an amiable, all-for-one relationship. CEO Whitman wears a
retro checked jacket. Omidyar is dressed in jeans and a denim eBay shirt, his hair gelled
skyward. Griffith, who might qualify as the patron saint of dot-com megamillionaires,
looks Santa Claus-ish with his white beard and smiling eyes. He was a barely employed
Vermont artist when he was hired in 1996 as eBay's second employee.

The conversation quickly turns to eBay's beginnings. It's become legend that Omidyar,
while working at start-up General Magic in 1995, wrote software for a Web site that
would help his girlfriend, Pam Wesley, trade with other Pez collectors. (Omidyar and
Wesley are now married.)

"It's a very good story that at its core was true," Omidyar says.

In fact, as Omidyar explains, he got thinking that the Net could be used to create a perfect

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marketplace — where everyone was on equal footing and the marketplace set the price.
He didn't have any particular love of auctions. But he thought they were a good "market
mechanism" for reaching the right value of an item.

He wrote some software and put up AuctionWeb. It was only a section of a site he had
built for some consulting work he did under the name Echo Bay Technology Group.
When he'd gone to register that site name, echobay.com was taken.

"There I was at the counter filling out the paperwork," he says. "This was back in days
when you had to fill out paper to get a domain name. So I said, 'Hey, I'll just abbreviate it.
What about eBay?' Turned out to be a lucky choice."

But what about Pez? Omidyar says that around that time, he and Pam went on a European
vacation, where she bought a number of Pez dispensers. Coming back, she started selling
and trading them on AuctionWeb. Omidyar saw "the passion that collectors have about
ordinary objects," he says.

He later told that story to eBay's first PR person, Mary Lou Song, who latched onto it as
an emotionally resonant version of eBay's beginnings. So she ran with it, creating the
myth.

By a couple of years later, AuctionWeb was taking off, and Whitman got a call to
interview as CEO. She was general manager of Hasbro's Preschool Division in Rhode
Island, overseeing product lines such as Playskool and Mr. Potato Head. The same
headhunter had tried to interest her in the CEO job at an Internet travel site, and she'd
turned it down. "And at least I'd heard of the travel site," she jokes.

The wooing of Whitman

The headhunter begged Whitman to at least consider eBay. To appease him, she flew to
see Omidyar in San Jose. The night before, she went on AuctionWeb for the first time. "It
was still in black and white and was very basic," she says. "I remember sitting there
thinking, 'Oh, this is just great.' "

But in San Jose, Whitman was impressed by Omidyar and Jeff Skoll, his business partner.
She started to see the site's potential. "By the end of that first morning, I thought, 'Hmm,
I'm glad I got on that plane,' " she says.

In retrospect, Whitman was ideal for the job, Omidyar says. Running eBay has never
been just about managing employees. It's also been about guiding and understanding the
ever-exploding community of eBay sellers. Whitman figured that out early, Omidyar
says.

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"For a traditionally trained business person, it can be hard to strike the right balance
between management leadership and letting the community lead you as well," he says.
"This is a new way of thinking about business, and Meg intuitively understood this."

Whitman jumps in, saying that moving fast and staying flexible has been a key to her
management.

"This is a completely new business, so there's only so much analysis you can do," she
says. "It's better to put something out there and see the reaction and fix it on the fly. You
could spend six months getting it perfect in the lab or six days in the lab, and we're better
off spending six days, putting it out there, getting feedback and then evolving it.

"You can't predict what's going to happen," Whitman continues. "It's another way of
saying 'perfect' is the enemy of 'good enough.' "

Crazy growth led to 'tough year'

EBay grew so quickly, did management ever feel the company was spinning out of
control?

"Ohhh, yes!" Omidyar, Whitman and Griffith say in unison, and Omidyar exclaims:
"1997!"

That was the year eBay moved from Web experiment to real company. It got venture
funding. It officially changed its name to eBay. It started looking for a CEO — Whitman
— and considered an IPO as the Internet turned red hot.

EBay's servers could barely keep up with the growth. "Mostly in 1997 and into 1998,
everyone in the community understood the Web site would probably crash today
sometime," Griffith says.

Omidyar tried to slow growth by boosting listing fees from 10 cents to 25 cents and
limiting the number of items that could be listed each day to 10,000. But then a scarcity
effect took over. Afraid of missing the 10,000-item cutoff, users got on eBay earlier and
listed more than they otherwise might have. "It was a tough year," Omidyar says.

So was 1999. "The summer of 1999," Whitman says. "June 10, 1999," she says with a
specificity that suggests the date is seared into her memory.

EBay's site crashed for 22 hours. Whitman insists it was both the worst and the best thing
that ever happened to the company.

"It humbled the company," Whitman says. "We were on a rocket ship. It was the bubble
in Silicon Valley. And that really stopped any idea of, 'Gee, aren't we special.' Which was

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really good culturally."

It was also Whitman's defining moment. She dug into the technical side of eBay and
ordered the site overhauled and beefed up. She had each of eBay's 400 employees call
lists of users to personally apologize, which won raves from the users. Coming out the
other end, eBay became the kind of company that could — and did — turn into the
world's biggest used car dealer and expand into Europe and Asia.

That's not to say that eBay left its challenges in the 1990s. It faces a different and maybe
more complex set today.

ome have made news lately. EBay recently raised listing prices and faced an outcry from
sellers. Its first-quarter profit fell short of Wall Street's expectations, the first time that's
happened. Some analysts say its revenue growth, which has averaged 70% a year since
1998, threatens to slow. Whitman, who ultimately told Disney she wasn't interested, is
likely to be courted by other companies.

Other challenges are more nuanced. Through the 1990s, eBay's sellers were mostly a
motley collection of individuals. Now, sellers range from individuals to major
corporations. All have different needs, but Whitman says she's resisted making a quilt of
rules.

"We could end up with a Web site so complicated, a mortal can't understand it," she says.

Whitman adds that she leans on Omidyar when making fundamental decisions about rules
for the site. "He's very gifted at this," she says. "When we're in a tough position on a big
policy call, we talk to Pierre. It's not something that yields to traditional market research."

What's next

Where does eBay go from here?

Whitman shifts into her presentation persona. First, she says, eBay will keep expanding
worldwide. Today, in about 15% of transactions, the buyer and seller are in different
countries. "I'd be surprised if that's not 50% to 60% 10 years from now," Whitman says.

"And think about what that means for eBay and the world — about connecting the Third
World with the industrialized world."

Second, eBay will find other means of selling beyond auctions and eBay Stores. It
recently launched a classified ad-type service overseas, called Kijiji. (It means "village"
in Swahili.)

Third, eBay will expand PayPal, the part of eBay that lets individual sellers take credit
cards for purchases. Will PayPal someday become a finance company, making loans to

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buyers similar to General Motors' GMAC? "That is a long-term opportunity," Whitman
says, but gets no more specific.

The growth of broadband Internet connections will also have a big impact on eBay's
plans, Whitman says. That probably means that eBay listings — which are now static
Web pages — will eventually have sound and video.

What's the most significant lesson learned from eBay?

"The remarkable fact that 135 million people have learned they can trust a complete
stranger," Omidyar says. "That's had an incredible social impact. People have more in
common than they think."

Omidyar, who spends much of his time in philanthropy, is looking at using the eBay
model for microfinance — the idea of making small loans to impoverished individuals so
they can start a business or plant a crop. Perhaps a Web site could link people who want
to make loans to those who need to borrow.

And, finally, do the eBay icons buy and sell on the site?

All say that they do. Whitman points out that all employees are encouraged to buy and
sell on eBay.

Whitman's assistant "may be making more money selling on eBay than being my
assistant," Whitman jokes, getting knowing laughs from her colleagues. "Which is
somewhat disconcerting."

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