posted on February 21, 2007 10:28:21 AM
Stirring Up the Cubicles at eBay
By BRAD STONE
Published: February 21, 2007
SAN JOSE, Calif. — By the end of February, most of the employees at eBay’s San Jose headquarters will collect their possessions, wave a final goodbye to their landline telephones and change cubicles.
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Jessica Brandi Lifland for The New York Times
John Donahoe, eBay's president, is weaning employees off land-line phones to get them to use the Internet calling service Skype.
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But what John Donahoe, president of one of eBay’s most important divisions, really wants is for his colleagues to change the way they work. “I’m a big fan of breaking patterns,” he said.
Mr. Donahoe, 46, is a deputy to eBay’s chief executive, Meg Whitman, 50, and, many people in the industry say, her likely successor when she ultimately steps down. In his two years as head of eBay Marketplaces — a division responsible for 70 percent of the company’s revenues and an even greater percentage of its profits — he has set out to change the company’s colors substantially.
Mr. Donahoe has led the acquisition of companies like the ticket exchange StubHub, helping eBay morph from a single auction-oriented marketplace into a portfolio of retail sites. This year, revenue-sharing deals brokered by Mr. Donahoe with Yahoo and Google will bring online advertisements to the auction site on a large scale for the first time.
His newest move, the cubicle swap, is intended to bring together the engineers and the businesspeople who work on specific projects, while weaning employees off their landline telephones and getting them to use the Internet calling service Skype, which eBay acquired for $2.6 billion in 2005.
Whether or not these initiatives work may determine whether eBay can build on a healthy holiday season and combat competitive threats like Google’s recent inroads into e-commerce.
“All our businesses need to do well, but John’s success and the success of Marketplaces is absolutely essential to the company,” said Ms. Whitman, who met Mr. Donahoe when they were consultants working in the San Francisco office of Bain & Company in the early 1980s.
Mr. Donahoe joined eBay at the end of 2004 from Bain, where he had risen through the ranks over two decades to become its chief executive. At 6 feet 5 inches, he towers over colleagues while wooing them with a friendly, accessible demeanor.
Thomas Tierney, an eBay director who is also a Bain alumnus, said Mr. Donahoe had “an uncanny ability to connect with everyone from receptionists to chief executives.”
Mr. Donahoe, the father of four, is known at eBay for his boundless energy, waking every morning at 4:30 a.m., often appearing in the eBay gym before 7 and working 70-hour weeks.
But he will need more than energy to reinflate eBay’s stagnant stock price. Despite a recent boost from strong fourth-quarter earnings, eBay stock has dropped by half from an early 2005 high, on concerns that the company has stopped growing as Internet users are enticed by buying opportunities elsewhere on the Web.
His division is posing the largest problems. Since he arrived, the rate of new users joining eBay has fallen. Subtract the eBay autos business, analysts say, and the average selling price of goods on the service has been stagnant at best, even as eBay increases the amount it charges sellers to list items on the site.
A result has been greater discord than usual among large sellers who use eBay to run their businesses and who feel as if their profit margins are getting steadily squeezed. Steve Grossberg, who sells video games on eBay, met Mr. Donahoe at the company’s eCommerce Forum in January and told him he was looking to sites like Amazon.com and Google to expand his business.
He said he was buoyed by Mr. Donahoe’s response. “I got the sense from him that anything goes and nothing is sacred,” Mr. Grossberg said. “He’s determined to fix it. He’s the only one at the company who gets it, because he’s not entrenched in eBay culture.”
Mr. Donahoe’s plan for eBay began, paradoxically, with getting certain products off its main auction site. When he joined the company, he said, sellers put anything and everything on the service, which is best suited for the sale of used items at bargain prices.
Selling newer products on eBay “didn’t make any sense,” he said. “It watered the experience down.”
Much of his effort over the last two years has focused on creating what he calls — with a consultant’s zeal for sloganeering — “tailored shopping experiences.” Aside from Shopping.com, which eBay bought in 2005 to allow shoppers to search for newer, in-season items, Mr. Donahoe led the acquisition of StubHub in January for $307 million. Last year, he rolled out eBay Express, a site for buying new products more efficiently, which many analysts say does not yet have much traction. He also has helped eBay either create or buy a worldwide network of local online classified advertising sites similar to Craigslist in the United States.
That was the first step. Now, Mr. Donahoe hopes to reverse trends like declining member growth by improving the overall experience of shopping on the site. “I think when we are really objective with ourselves, we have to admit our user experience has not kept up with other e-commerce sites all around us,” he said.
Last year, he cited fraud and abuse on eBay as major problems — an overdue admission, in the view of many company critics who contend that eBay tends to sweep such problems under the rug.
In one of several recent moves to address fraud, the company introduced an expanded feedback system in January, allowing buyers to rank the performance of sellers more comprehensively after a transaction.
Mr. Donahoe is also planning other ways to improve the user experience on the site, like paring down eBay’s notoriously cluttered pages and rebuilding its search engine.
On a rainy morning in February, he received additional confirmation that such an overhaul was needed. He accompanied two members of eBay’s research group to the San Jose apartment of Kanvasi Tejasen, a 30-year-old Lockheed Martin engineer who had agreed to have her online buying habits studied by the company in exchange for $200.
With Mr. Donahoe (who makes $800,000 a year and has received around $10 million worth of eBay stock) sitting on her sofa taking notes, Ms. Tejasen shopped for a TV tuner and visited rival sites like Amazon and Google. In one crucial moment, she plugged the term “4G iPod Nano” into the eBay search engine and received 1,700 results, which she said she found confusing. That set Mr. Donahoe scribbling furiously.
“We have to do a better job getting her what she wants,” he said afterward. “If we improve search efficiency even 1 percent, it’s worth hundreds of millions of dollars.”
To make those changes, Mr. Donahoe recently hired Matt Carey, the former chief technology officer of Wal-Mart Stores. Mr. Carey, who spent more than 20 years at Wal-Mart, said he was working on building computer systems that could look at customers’ past purchases and make educated assumptions about what they might be looking for.
Mr. Carey is also working on another initiative — what Mr. Donahoe calls “bringing eBay to the Web.”
Today, Web publishers can put eBay listings on their pages only by using a set of relatively complex software tools, called the eBay editor kit. Mr. Donahoe wants to streamline that process, making it easier for, say, fans of the New York Mets pitcher Pedro Martinez to put eBay and Shopping.com listings of Martinez-related items right on their Web pages. “John and I talk about this every time we’re together,” Mr. Carey said.
They are also working on ways to let large organizations create their own eBay-style marketplaces. Last year, for example, the Association of National Advertisers, a trade group, began testing such an auction service (letting advertisers buy and resell air time). But the largest customer is soon likely to be the social networking leader MySpace.
For the last six months, people close to the conversations in both companies say, eBay and MySpace have talked about letting MySpace users put eBay and Shopping.com listings on their pages. The partnership would expose eBay to a younger audience that came to the Web after eBay burst onto the scene.
Ms. Whitman and Mr. Donahoe declined to comment on any MySpace negotiations, but said bringing eBay listings to other Web sites was a priority. “If people don’t come to eBay, we will bring eBay to them,” Ms. Whitman said.
In the meantime, Mr. Donahoe has other targets for his energies. He says he is thinking about ways to assist sellers further in buying advertising keywords on the Web’s search engines, and about finding ways to help eBay exploit the Skype software, which has been downloaded 140 million times.
“Sometimes I wish we could make things happen faster than we can,” he said. “But one thing I’ve learned is that you don’t do anything sudden on the eBay ecosystem.”
He is not eager to rush, however, when it comes to addressing the delicate question of who will succeed his boss. Ms. Whitman says she has no plans to retire and regrets making a statement eight years ago that she foresaw staying at eBay for 8 to 10 years.
Mr. Donahoe says he does not think about it. “I have an awful lot of work on my hands just running the marketplace business,” he said. “Plus, I love working with Meg and I’m learning a lot.”
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_____________________
People who want to share their religious views with you almost
never want you to share yours with them.
posted on February 21, 2007 10:44:00 AM
I'm completely unimpressed.
Sadly, there is much evidence to indicate that Donahoe doesn't get it after all and is in fact quite a bit behind the curve:
“We have to do a better job getting her what she wants,” he said afterward. “If we improve search efficiency even 1 percent, it’s worth hundreds of millions of dollars.”
NS, S. (No sh*t, Sherlock.) Companies around Silicon Valley (not to mention ME) have been saying that for YEARS. Improving Search is THE web challenge. Search is way too hard to use and returns too many irrelevant results, whether it's Google Search or eBay Search.
Donahoe is the brain trust behind dead-on-arrival eBay Express. Please, Meg, don't plan on retiring any time soon. But if you must, you can pay me $800,000 a year instead and I'll tell you how to make Search easier. It's so simple, you'll slap yourself in the forehead.
fLufF
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[ edited by fluffythewondercat on Feb 21, 2007 01:10 PM ]
posted on February 21, 2007 01:08:54 PMMr. Carey, who spent more than 20 years at Wal-Mart, said he was working on building computer systems that could look at customers’ past purchases and make educated assumptions about what they might be looking for.
You mean, like, um, AMAZON?
Welcome to the party, Carey. You're eight years too late.
It's called an emotionally intelligent interface. The virtue of being so far behind the curve that you don't even know there's a curve is that now you can see how dismally EII has underperformed on Amazon. An EII cannot suggest to you products that are completely unrelated to anything you have purchased or looked at before.
Where does Meg GET these people? Oh, right. Wal-Mart.
posted on February 21, 2007 01:51:08 PM“We have to do a better job getting her what she wants,” he said afterward. “If we improve search efficiency even 1 percent, it’s worth hundreds of millions of dollars.”
To make those changes, Mr. Donahoe recently hired Matt Carey, the former chief technology officer of Wal-Mart Stores. Mr. Carey, who spent more than 20 years at Wal-Mart, said he was working on building computer systems that could look at customers’ past purchases and make educated assumptions about what they might be looking for.
Now the Demomorons will have to leave eBay. They are against Wal-Mart and now that eBay has Wal-Mart ties, they will have no choice but to leave eBay.
posted on February 21, 2007 04:32:59 PM
"But he will need more than energy to reinflate eBay’s stagnant stock price. Despite a recent boost from strong fourth-quarter earnings, eBay stock has dropped by half from an early 2005 high, on concerns that the company has stopped growing as Internet users are enticed by buying opportunities elsewhere on the Web."
posted on February 22, 2007 04:24:14 AM
Ebay hired an ex WalMart employee. In what way does that mean they have "WalMart ties"? I think maybe your WalMart tie is tied a bit too tight, stone. You're just looking for an argument. This article is about a whole lot more.
posted on February 22, 2007 07:32:01 AM
I didn't find anything substantial in this article, no plan, no new ideas, na da.
What does this mean?
"Mr. Donahoe’s plan for eBay began, paradoxically, with getting certain products off its main auction site. When he joined the company, he said, sellers put anything and everything on the service, which is best suited for the sale of used items at bargain prices.
Selling newer products on eBay “didn’t make any sense,” he said. “It watered the experience down.” end quote
So what is he saying? No new merchandise, only the former core items of antiques and collectibles?? Or garage sale items? Sometimes I think these guys should keep quiet until they really have some new ideas.
[ edited by merrie on Feb 22, 2007 07:32 AM ]
posted on February 22, 2007 10:23:39 AM
Merrie: I agree that they should keep quiet until they have substantive things to say. I posted the article just for some of the "interesting" quotes-with-no-real-meaning, typical of what comes out of eBay HQs.
_____________________
People who want to share their religious views with you almost
never want you to share yours with them.
posted on February 22, 2007 06:17:57 PM
I'm going to add my 2 cents. I cannot believe that they are that stupid! Skype? 140 million users downloaded it when it was free. It's not free anymore. No one is going to pay for it. DUH! Instead of looking back and realizing what they WERE doing right, they are too busy focusing on stuff that won't work. I saw this happen with Avon as well. They brought in a new CEO who changed everything. As a result, Avon wasn't doing as well. Well, now that they got rid of that CEO, Avon is doing better because it went back to what was working. Why do companies feel that they have to fix what isn't broken? Look at how many listings are down. My category is way down and it's across the board even in the UK site. I can tell them what they are doing wrong, but it will cost them much more than $200. Geez ....
