EBay Chief Executive Officer Devin Wenig took the stage in a Las Vegas convention center with arms raised like a prize fighter after winning a stunning upset. This was the first time in eight years that EBay had gathered such a large group of sellers in one place to give them a chance to eat, drink, mingle and get the lowdown from the CEO.
Wenig, in the job for about a year, knew he had some cheerleading to do. EBay has struggled to make headway against Amazon.com, and many of these product-peddling merchants-long the lifeblood of EBay's online bazaar-have been putting their wares on the Seattle giant's site to boost their sales.
For Wenig, like his predecessor John Donahoe, EBay's perennial challenge remains confronting the Amazon threat while keeping investors, merchants and shoppers happy. But rather than beat Amazon at its own game-selling virtually everything to anyone and delivering it lickety-split-Wenig wants EBay to be the anti-Amazon, excelling in areas where Amazon lags. He's emboldened by forecasts showing that e-commerce remains in its infancy, meaning there's plenty of room for lots of players to grow and prosper. "The world doesn't have to choose between Amazon or EBay," he said in an interview in Las Vegas. "The world can comfortably have Amazon and EBay-and it will."
Wearing khakis and a blue, button-down shirt with the sleeves rolled up, Wenig paced the stage, clicking through slides and laying out his vision. He vowed to attract 100 million new shoppers with ads aimed at millennials with only a passing familiarity with EBay. He pledged to push hard into emerging markets like Turkey and chase customers wherever they congregate-Facebook, Pinterest, Snapchat.
He talked up a new search architecture that will make it easier for customers to discover new products, an effort to differentiate EBay from Amazon and its mission-shopping hordes. He vowed to respond quickly to merchants' concerns about unfair negative reviews. "We're not dropping the mic and walking off the stage," Wenig told them. "We're just getting started."
Having traveled from 42 states (and Canada), the 1,000-plus merchants in Vegas on that blistering July afternoon were true believers who rely on EBay for their livelihoods. Together, they sell more than $500 million a year on the marketplace. So they were ready for a pep talk and gave Wenig a rapturous reception, cheering and clapping once he was done.
Few in the conference hall were willing to criticize a company they love, but their loyalty isn't limitless. Eloise Holbrook, an abstract painter in Ocala, Florida, started selling her work on EBay 12 years ago. When sales stalled a few years back, she began posting her wares on Etsy and Amazon. Now she's seeing signs of a turnaround and says her EBay sales increased 15 percent last year and are her primary source of income. "The EBay ship is steadying," she said. "I can find my buyers and they can find me."
Wenig, 49, isn't your typical technology executive; this is not a guy who started a company in his garage. Just weeks after Wenig graduated from Columbia Law School, his father died and the son found himself running the family business-a publicly traded biotechnology firm called Nastech that specialized in making nasally administered drugs. He decided he wasn't right for that job, dabbled in corporate law, then in 1994 joined Reuters. Wenig rose through the ranks to run the markets division, which generated most of the company's revenue by selling news and information to the financial services industry.
About 10 years ago, he got a call from Yahoo Inc. Then CEO Terry Semel was refashioning the internet portal as a media company and needed a successor with Wenig's credentials. Wenig even picked out a house in Silicon Valley, but backed out at the last minute. Friends say he was unsure if Yahoo could be turned around (a prescient analysis, as it turned out).
In 2011, Wenig was forced out of Reuters in a management shakeup. Within days, EBay CEO John Donahoe got in touch. He was looking for someone with experience running a big global technology platform to head up EBay's marketplace. They met for beers and lobster rolls in Nantucket, where Donahoe was vacationing. Once again Wenig wasn't sure, but he didn't want to be known as the man who passed up opportunities to run both Yahoo and EBay and agreed to come on board.
His introduction to the technology industry was bumpy. After hackers struck in 2014 and exposed thousands of customers' personal information, Wenig grappled with an appropriate response. Overuling executives who wanted to wait and to see if the data was used fraudulently, he decided to ask customers to change their passwords-betting that would be less damaging to the brand.
The decision was not universally admired, inside or outside the company. Next Google updated its search-engine algorithms in an effort to make search results more relevant to the user; EBay's rankings in Google searches fell, making it harder for new customers to find the site. Then along came activist investor Carl Icahn, who began agitating for EBay to spin off PayPal. Icahn made the usual argument that the payments business be unshackled from the slow-growing parent to unlock its value. EBay fought Icahn for months and ultimately agreed to split in two; the deed was done in July of 2015.
Tapped to be CEO of the smaller EBay, Wenig wasn't sure he wanted the job. Venture capitalist Marc Andreessen, then a board member, wouldn't take no for an answer. Over glasses of bourbon, he appealed to Wenig's long-held admiration for Silicon Valley; an EBay failure would spook investors and send shock waves through the technology industry. This wasn't just about a job; it was about forging a legacy. "There are a lot of startups in the Valley that never make a difference in people's lives," says Andreessen, who breakfasts regularly with Wenig to discuss emerging e-commerce technology. "EBay is one of the small number of companies that has."
Today, Wenig's biggest challenge is refreshing the brand. When shoppers think of EBay-if they think of it at all-many imagine the online rummage sale of yesteryear, where you could snag a deal on someone's baseball card collection or video game console by bidding in an auction. And of course the occasional oddity still snatches headlines, like when a grilled cheese sandwich fetched $28,000 because the Virgin Mary's face appeared in the bread through an act of divine culinary intervention.
In fact, the auction and rummage sale is now a small part of the business. Ebay is much like any e-commerce site these days, replacing a trip to the mall by offering deals on new iPhones, Under Armour shirts and cordless drills from DeWalt. Yet, those changes haven't significantly resonated with shoppers. Despite being founded at about the same time as EBay in the late 1990s, Amazon has double the shoppers and traffic. Wenig is hoping EBay's return to television advertising this fall after dropping out in 2015 will boost sales during the crucial holiday shopping season.
Differentiating EBay from Amazon is the centerpiece of Wenig's strategy. Crucially, he has stopped competing in the area where the Seattle leviathan arguably has the biggest advantage: the speedy delivery of everyday merchandise. Instead, Wenig wants shoppers to come to EBay when they are planning vacations and need supplies, refreshing a wardrobe or curious about the latest gadgets. Amazon appeals to time-strapped shoppers with Dash buttons that let them quickly replenish laundry detergent and toilet paper when their stock is running low. Wenig wants to wow consumers with a sense of discovery as they meander through an online bazaar that makes shopping pleasurable and drives impulse sales beyond a narrowly focused online mission.
Despite being in business for two decades, EBay's search engine is still sometimes lacking. Wenig is pushing sellers to enter more precise keywords and product descriptions to make it easier for customers to find what they want. In July, EBay acquired SalesPredict, an Israeli company that forecasts customer buying behavior and can help EBay make sure inventory matches demand. The company also bought Expertmaker, a data analysis firm that gives EBay and merchants insights into what shoppers want and at what price. Wenig is now in the market for companies that make spell-correcting algorithms; turns out misspelled words are a leading cause of searches that yield no results. "EBay is going back to basics," says Webush analyst Gil Luria. "What they are doing is working."
There are bells and whistles too-which inevitably include virtual reality. Ticket buyers who use EBay's Stubhub division get a virtual view of their seats, a feature that's proving popular with shoppers. With the upscale Australian department store chain Myer, EBay created a Virtual Reality Department Store, giving away 20,000 "shopticals" that let shoppers browse merchandise via augmented reality, a flavor of VR that lays computer graphics over the real world. Wenig is looking for ways to apply that technology to other goods sold on EBay, and he created a research team called "N" that is separate from the core business and focuses on big bets for the future.
Wenig has been making slow and steady progress. On July 20, EBay announced earnings that beat Wall Street estimates and revised upward its sales forecast for the rest of the year, sending shares to their highest point since the company split with PayPal. In a still weak economy brimming with competition, potential reversals are always one quarter away, but Wenig can take comfort that so far he has proved Carl Icahn wrong. About 14 months after the split, EBay shares are up 11 percent; PayPal's have barely budged.