Meg Whitman has helped take eBay (EBAY) to dizzying heights from the time she joined the company.
When she was chosen for CEO of the company in 1998, she took the company public six months later for an initial market value of $700 million. Today the company is valued at $46 billion, and extraordinary performance by any measurement.
Another great part of this story is that she did it by serving her customers well, increasing shareholder value and retaining her ethics.
There are some challenges ahead though as Whitman looks at a slow-moving Skype, which she purchased for $2.6 billion, yet is only bringing in a tiny $240 million over the last twelve months, and a slower growth rate for the overall company.
Whitman's major challenge now is that the core business, Ebay marketplace, is slowing down. Listings for the last quarter in the U.S. were down 2 percent. Part of that is said to be the result of moves made to add to the quality of the listings and its profitability i.e. prices were raised. Even with that it looks like the growing competition is saturating the market as other companies are offering many more opportunities to sellers than was there when Whitman took over the company.
At this time eBay is sitting on $3.5 billion in cash and analysts believe that Whitman will probably have to go the way of a merger or acquisition to spur growth in the company.
Some of the thoughts on that is that it would probably be in the travel industry with a company like Expedia (EXPE) or possibly Priceline. Other targets could be the online jobs sector or a highly trafficed auto site like Autobytel (ABTL).
Hopefully whatever is done won't be for the purpose of short-term share increases. While the pressure is always on by Wall Street to look at the quarterly prices of companies, the great companies only operate with long-term objectives in mind.
Whitman has taken that stance with eBay as shown by her patience with Skype, which she things will eventually take off, citing that Paypal also took time to become a great benefit to eBay's bottom line.
As she said recently: "I love who we are as a company and what we stand for. It's fun to have built such a successful company and done it with a nice character, in a way most people would be proud of."
If she keeps this attitude, I think that eBay should be in good hands for a while and decisions will contiually be made based upon her core values. Her customers and shareholders will be happy she does.
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