Do We Still Buy the Myth of the Can-Do Celebrity CEO?
Ex-EBay Chief Whitman, Now Running for California Governor, Clearly Does. And She's Got $150M to Spend
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.
"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
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"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." - Ronald Reagan
There has been more "strive," during her tenure than at any other time.
Period.
Anyone out there disagree?
I have been able to put aside the page after page tribute to Obama early in the year as the magazine returned to it societal roots of actually reporting on Advertising and Media as I again enjoyed the flow of solid actionable information.
But todays hit piece; out of nowhere is totally inappropriate. My god the woman is running to save this bankrupt state from further demise. She has achieved front runner status and the entire piece is opinion about acquisitions at Ebay and how much this republican is willing to spend to win the office. Suddenly you care about campaign finance? Please check Mr. Obama' coffers.
What about her marketing, media and advertising campaigns? What about the team of media pros assembling for this candidate. All good angles for a media mag. But no. Instead we get this hit piece...inappropriate at this time and on these pages. Americans all over the country are cancelling daily newspapers because of biased reporting I was tempted to do the same when my Ad Age subscription came due but I'll stick it out for another year. Warning: here come the post healthcare debate 2010 congressional and senatorial elections. You will not like the result I promise. I hope you will cover the media, marketing and ad angles and leave the vitriol to MSNBC.
This is a major, fundamental issue that transcends any media or PR coverage that is currently being put into place. The folks behind her campaign might want to start thinking about reinventing her image through some very careful, honest, and strategically innovative outreach.
Gunther Sonnenfeld
@goonth
who hasn't voted in 28 years now deciding
that being a governor is cool. Oh, we also
have Carly Fiorina running for something out
here in California. But that's OK, California
is already in the dumper so two ineffective
ex CEO's fit right in.
The benefits of electing successful CEO's tends to similar to the advantages you get from wealthy scions like the Rockefellers, Roosevelts, and Kennedys. They are self sufficient, and therefore less likely to be susceptible to bribes and financial influence. They also tend to be incredibly driven and hardworking people. The drawback is that they may tend to towards autocratic rather than decision making: The "I am the Decider" factor. But in times of crisis, that can be be an asset.
Re Whitman: I can't argue that she will make a good governor, and she certainly had a lackluster performance at the RNC...but lets be clear: she did an incredible job at eBay. eBay's business was under constant attack by YHOO, AMZN, and a number of other competitors (AuctionWatch, Classified Ventures, etc...). It was a business with basically no switching costs besides network effects. But Whitman basically manuevered eBay into a monopoly position in the auction space. Her greatest asset, very possibly b/c she was a woman, was her ability to retain and attract a core group of eBay Power Sellers. She did so largely by listening to her community, and innovating.
Whitman made her share of mistakes, like Skype and missing the chance to buy Paypal for less than 1.2 billion. But overall in my book she is in the top 5, and possibly the most successful female CEO in history. Moreover, she kept her marriage intact, has been philanthropic w. her wealth, and raised two normal children. Contrast that with the moral failings of, say, Gavin Newsom.
California's biggest crisis right now is financial. California tends to vote financially conservative and socially liberal, and Whitman isn't far from the mold.
Overall, she definitely lacks the charisma and sparkle of a Schwarzenegger or Newsom, but assuming you agree with her positions, I think she makes an extremely strong choice for the Republican candidate for governor.