Oh, geez, talk about bad timing.
Last week, former eBay CEO Meg Whitman officially launched her campaign for governor of California, hoping to clinch the Republican nomination.
Also last week: News broke, thanks to proceedings in a London court, of a worldwide scam involving potentially millions of dollars and thousands of customers duped into buying counterfeit golf clubs, of all things, as well as clothing, airline-lounge passes and other luxury goods sold on eBay.
“Nearly every major golf brand has been affected by the sale of counterfeit goods through the eBay accounts,” the Times of London quoted the prosecutor as saying of “the single-largest counterfeiting conspiracy yet uncovered” on the auction site. “This is a conspiracy of a truly global nature,” the prosecutor added. It went on for four years, until early 2008 — all on Whitman’s watch. (She left in March 2008.) In the past, luxury brands have accused eBay of being a cesspool of counterfeit goods, and have claimed that the site doesn’t do enough to protect its customers from fraud. So much for Whitman running as a law-and-order candidate.
Oh, but wait — also last week: The founders of Skype, which eBay purchased in 2005 for $3 billion ($2.1 billion up front, plus shareholder incentives that ultimately jacked up the total payout), filed suit against eBay. It’s a complicated lawsuit having to do with the alleged improper use of confidential trade information, but it could derail eBay’s recently announced plan to sell 65% of Skype for $1.9 billion in cash (including, oddly, a $125 million loan from eBay) to a group of private investors — a valuation that has eBay taking a considerable loss on its acquisition. Whitman’s decision to buy Skype in 2005 was largely seen as a head-scratcher even then — looking back, she clearly overpaid to block fellow bidders Google and Yahoo — and once Whitman was out the door, her replacement, new CEO John Donahoe, made no secret of his intent to reverse that part of her legacy. But get this: Skype’s founders also have a separate lawsuit going, claiming that Skype doesn’t actually own the underlying technology that powers it; read the fine print and the founders still own that technology, according to the suit. If they prevail in court, questions about Whitman’s purchase of Skype will take on additional drama.
And yet now she wants a second act as a politician — she wants to run California. Why?
Because Meg Whitman still believes in a formerly powerful media myth: the omnipotence of the Celebrity CEO. Meg Whitman got rich — she’s a billionaire — running eBay, and during the boom years, at least, she got endless gushing coverage from the then-hagiographical business press. Back then, of course, CEOs were pretty much automatically rock stars (particularly tech CEOs). They were gods, “wealth creators,” kings and queens of both the economy and the culture — choose your metaphor.
In retrospect, did Whitman run eBay particularly well? Uh, let’s not go there. (An itinerant corporate operator who spent time in various management roles at Procter & Gamble, Stride Rite, Disney, and Hasbro — she was in charge of, I’m not kidding, Mr. Potato Head — she joined eBay in March 1998, when it had only 30 employees, just as it was really taking off and just six months before its IPO. Unlike some other tech billionaires, she didn’t create the company that made her rich; Pierre Omidyar, eBay’s founder did.)
Not that long ago, the media pretty much automatically thought of non-heir billionaires as hyper-capable — geniuses, even. If they banked a billion or more, the thinking went, they must have been doing something right — right? Now, of course, the media regards a lot of corporate billionaires and megamillionaires as automatically suspect.
The irony here is that Whitman was herself a media executive; regular readers of this column know that I’ve always argued that eBay is essentially a media company. Most people mistake it for a merchant, but of course, in reality, it has no inventory, and doesn’t even really control the marketing (right down to the product descriptions and product photographs) of the stuff that people “buy on eBay”; individual independent merchants do all the selling, then pay a cut to eBay. Like Facebook or Twitter, eBay basically runs a giant spreadsheet that users fill with information — in eBay’s case, about products. Like media-mogul-turned-New-York-Mayor Mike Bloomberg, Whitman was in the data business.
Contemplating Brand Meg (her campaign bumper sticker — MEG 2010: A NEW CALIFORNIA — encourages that first-name intimacy) requires a rewind to CEO Whitman and a simple question: Was she really such a great leader? Like, billionaire great?
Those are the sorts of questions that the business press largely punted on over the years, so now it’s California voters who have to decide — with a curious addition: Is she good enough to now lead us?
Annoyingly, the answer may not matter: Whitman has announced her intention to spend $150 million — including “as much as it takes” from her own pocket — to buy the governorship. Er, I mean, run for office.
The beautiful thing is that if Whitman clinches the Republican nomination, the party machinery, which of course professes to hate much of the media (except Fox News), will gladly trade on the media-created mythology surrounding Whitman’s eBay years — spending tens of millions of dollars of Whitman’s own insane wealth to buy … more media (mostly TV commercials, presumably) to reinforce that very media mythology.
The funhouse mirrors of the boom years continue to distort in fascinating ways, don’t they?
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Simon Dumenco is the “Media Guy” media columnist for Advertising Age. You can follow him on Twitter @simondumenco