By Greg Bensinger
After resisting calls to split itself in two, eBay Inc. in
September announced it would create two new companies, splitting
off fast-growing payments unit PayPal, which investor Carl Icahn
referred to as "the gem" of the business.
Once the firms' conscious uncoupling is complete late next year,
eBay will have to prove it can remain a dominant e-commerce player.
Devin Wenig, president of the eBay.com marketplace and the
stand-alone company's incoming chief executive, is working hard to
show the split is a good thing.
In three years running eBay's marketplace, Mr. Wenig has lured
new brands to sell on the site, and worked to transform its
reputation from an online garage sale to a fashion hub and place
for new goods at fixed prices. He has overseen a massive site
redesign, reworked its search algorithm and conducted experiments
like the eBay Now same-day delivery service.
Yet a smaller eBay could fall prey to the likes of Amazon.com
Inc., Alibaba Group Holding Ltd. and Apple Inc., which are doubling
down on their payment offerings, like the new Apple Pay mobile
service.
In a recent interview with The Wall Street Journal, Mr. Wenig,
who is 48 years old, talked about why the split makes sense, how
eBay will compete for talent and what he sells on the site. Edited
excerpts:
WSJ: In your own words, how does eBay benefit from a split with
PayPal?
Mr. Wenig: For eBay, the benefit has to be in focus and I really
want to focus on building great commerce experiences. I want to
focus on what we do and what we do is we create a global commerce
community, that's at the heart and soul of what eBay is. We'll
focus even harder on that core community.
WSJ: What will you do differently as CEO of stand-alone
eBay?
Mr. Wenig: I want to reconnect with small and large merchants, I
want to energize the eBay community, I want to build great product
experiences that are both useful and engaging. There will be
changes; there will be significant changes. I am excited about
it.
WSJ: Care to elaborate?
Mr. Wenig: No.
WSJ: Hiring top talent in the Bay Area is increasingly
competitive. Will you be able to continue to attract the best?
Mr. Wenig: I am not sure that a stand-alone eBay is that much
different. I could make an argument that it's more compelling
because as a slightly smaller company people feel like they could
make a bigger impact. You'd be surprised how many engineers we get
that say that they put themselves through school selling on eBay. I
always assume that every single one of our people has five other
job offers at any given time.
WSJ: You once intended to expand your same-day delivery service
to 25 markets, but have scaled back to just five. Does same-day
delivery have a real future?
Mr. Wenig: I am not sure, is the honest answer. And I don't know
if anybody is sure. We're still testing it; we've seen mixed
results, quite honestly.
Do I think the future of the company is instant delivery?
Certainly not and I am not sure the future of any company is
instant delivery. At least for the eBay customer, it's not clear
that very fast delivery at a premium price is what they value.
WSJ: After the split, might eBay consider adding other payments
options in addition to PayPal?
Mr. Wenig: We've got to, in this split, make sure that we're
preserving and creating value for today's eBay Inc. shareholder.
So, separating the companies and letting eBay completely move away
from PayPal wouldn't create value for shareholders. The separation
has got to provide continuity of the relationship; that's all being
worked out.
PayPal is going to be the dominant payment provider on eBay for
a long time and we want it that way, and the separation will ensure
that it is that way.
WSJ: What are your thoughts on Bitcoin?
Mr. Wenig: Both eBay and PayPal are open to it--PayPal is
experimenting with it--and through our PayPal relationship we're
likely to do the same. I am very open to it.
WSJ: How much of a threat to your business is Alibaba in the
U.S. or elsewhere?
Mr. Wenig: Alibaba's IPO doesn't make Alibaba a new company.
EBay and Alibaba go back over a decade. Alibaba's top of mind right
now because of the IPO, but there are tons of startups and an
evolving retail, brand and marketplace environment that makes this
probably among the most competitive industries around.
WSJ: Amazon seems to be gobbling up e-commerce world. What's to
be done about them?
Mr. Wenig: There is a big difference between eBay and Amazon and
it goes to the heart of the business model: we don't compete with
merchants. We enable small, medium and large merchants to plug into
a huge global buyer base. As the online and offline worlds come
together, brands and retailers are going to need a neutral
technology partner.
We're the world's biggest store, we have the most things for
sale. It's because of our neutrality.
WSJ: Would you consider adding a shipping loyalty program, akin
to Amazon's Prime?
Mr. Wenig: Whether or not our customers want a shipping program
remains to be seen. EBay customers require efficient shipping, but
they care about the cost of shipping as much as the time.
WSJ: What about taking the company private?
Mr. Wenig: It's way premature to even think about that. What the
shareholders of the company really want me to focus on is running
and improving the business.
WSJ: Do you shop on eBay?
Mr. Wenig: I shop a lot on eBay. I bought several months ago a
beautiful 1860s handcolored map of New York. The last item I sold
was a week ago--a linen shirt.
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