eBay 10 Years - 1998

The Year that Was: 1998

"Pierre isn’t going anywhere, is he?"

Meg Whitman

As they looked to 1998, eBay's leaders Pierre Omidyar and Jeff Skoll did something many entrepreneurs fail to do—they took a clear-eyed look at the future and concluded that someone else was needed to take their small but booming enterprise to the next level. They wanted to preserve and protect the unique company—and community— culture they had created. But, they also wanted to see eBay take the logical next step in its development—to make its initial public offering (IPO). For this, they knew they needed outside talent, someone with the right business experience and savvy who also understood what it was to be, as Pierre called it, "eBaysian." After enlisting a headhunter, eBay executives and Benchmark partner Bob Kagle considered a long list of candidates, gradually whittling the list down to a handful for interviews. As the process continued, one candidate—a Harvard MBA with impeccable credentials from consumer companies such as Proctor & Gamble and Disney—became the runaway favorite. According to Pierre, Meg Whitman was "the perfect person." Bob Kagle was also impressed by a question Meg asked during her interview. "If this is something I decide to do," she said, "Pierre isn't going anywhere, is he?" For Kagle, this showed a quality many incoming CEOs lack—the ability to fully recognize and value the contributions of the people who had started a company from scratch. Meg, he felt, would be an excellent complement to Pierre and Jeff. Meg came onboard as eBay's new CEO in March 1998, and the company set its sights on a September IPO. In the meantime, much was happening. In June, a charitable fund known as the eBay Foundation was established. In July, eBay acquired Jump, Inc. and its person-to-person online trading site, Up4Sale, and hired Rajiv Dutta as director of finance. In August, the company also entered into a three-year strategic partnering arrangement with AOL, a step many considered essential to a successful IPO. And in August—while Elvis week was celebrated in Memphis with candlelight vigils and karaoke contests—eBay launched "All the King's Things," its first Elvis site. The prime mover behind the site, which included an Elvis chat room along with numerous Elvis-related auction listings, was “Rockin” Robin Rosaan, a long-time Elvis fan and eBay employee. On the last day of August, eBay's executive team began the "road show," a traveling investor pitch that hit more than a dozen U.S. cities leading up to the planned IPO in late September. The presentations went over well across the country. And, as the team arrived in New York to watch the company go public on September 24, momentum—and anticipation—were building. The stock opened at 53 1/4, much higher than expected. At that moment, the company that Pierre had begun as a hobby just three years before was worth $2 billion. As the management team celebrated in New York and the rest of eBay's staff joined in from the San Jose offices, the listings, auctions, and surreal growth continued. During 1998, $700 million in sales were transacted over eBay—a jump of more than seven times the previous year. Registered users—which had totaled 341,000 at the end of 1997—now surpassed 2.1 million.