In Whitman, HP gets a CEO used to the spotlight
After heading up eBay and making a run for California governor, Whitman won't be deterred by the intense scrutiny sure to be endured by the next chief executive of HP.
Meg Whitman's ascendency to CEO at Hewlett-Packard may be surprising, but this onetime eBay chief executive and California gubernatorial candidate is hardly unaccustomed to the limelight.
From building eBay up from a dot-com startup to an established Internet company, to her recent failed run to become California's governor, Whitman has proven herself as someone willing to take bold action, even if it doesn't always pay off. Having lived under the microscope of both Wall Street investors and the political media, she won't easily be deterred.
That's a good thing, because after a string of disastrous flameouts from the last three CEOs of HP, the next head of the technology giant will face intense scrutiny. Whitman takes the reins of a company amid a transformation, shifting away from its consumer PC business and toward a more software and business-centric focus.
Whitman, 55, worked for Procter & Gamble and the Walt Disney Company after graduating from Princeton University and Harvard Business School. She went on to work at DreamWorks, Stride Rite, and Hasbro before joining eBay in 1998 as chief executive officer.
Whitman's years at P&G and Disney helped established a consumer-centric mentality that would help her later on at eBay, according to Trip Chowdhry, an analyst at Global Equities Research. He added that knowledge would be helpful if HP were to decide to keep the PC business.
Whitman was a relative unknown when she was asked to run eBay, then a tiny company pioneering online auctions. Like many dot-com startups at the time, eBay's backers were hoping to bring in the proverbial adult supervision to guide the company. That's not to say there weren't speed bumps. In its early, high-growth years eBay was plagued by outages and other technical snafus.
She was at eBay for 10 years and guided the company into the online auction giant that it is today. Annual revenue grew from $4 million to $8 billion during her tenure along with employees and the creation of the "eBay economy" of devoted merchants. In addition, eBay had moved beyond simple auctions and operated as a store in competition with the likes of Amazon.com, although never reaching that level of broad usage. Rather than just dusty collectibles in the home, merchants began selling regular products.
Much of eBay's foundation was built by Whitman, Chowdhry said.
Beyond taking eBay public, Whitman left her mark on the company through two major acquisitions. In October 2002, eBay acquired PayPal, an online payment system that was already widely used by its merchants. The $1.5 billion deal is seen as a success for Whitman, as it allowed the company to get a larger piece of each transaction that took place on the site.
Now, PayPal is eBay's way of getting into the burgeoning area of mobile payments. The unit recently laid out its vision for enabling transactions both online and at physical stores using its service.
Her second acquisition, however, didn't fare so well. Whitman led the head-scratching purchase of Internet video and voice calling service Skype for $4.1 billion in stock and cash. Whitman had a vision of merchants and customers communicating and driving sales, a trend that failed to materialize.
Throughout her tenure and for several years after her departure, Skype was seen as an albatross hanging on eBay, a separate business that never really fit with the rest of the company.
Last year, eBay sold 70 percent of Skype to various private equity firms in a deal that valued the business at $2.75 billion. In May,.
Whitman almost left in 2005, according to a report by The Wall Street Journal. Disney's board interviewed her to succeed then-CEO Michael Eisner, but she reportedly withdrew her name from the running because she suspected the company was favoring then-Disney President Robert Iger, who eventually was named CEO.
Whitman stepped down as eBay chief executive in 2008 after running the company for 10 years, and was succeeded by John Donahue, who she recruited in 2005.
"Many of you know I've said in the past that 10 years was about the right amount of time for any CEO to stay at the helm of a company," she wrote on eBay's blog after stepping down. "Now that I've reached that milestone myself, I still believe this."
Whitman then began a foray into politics. After serving as an adviser to Sen. John McCain's presidential campaign, she announced her candidacy for governor of California in 2009. She won the Republican primary in 2010, but lost the election to Democrat Jerry Brown, despite spending a record $144 million of her own money on her campaign.
Whitman joined the HP board in January, just a few months after the company named Leo Apotheker as CEO. Over the past month, she and the rest of the directors have had to deal with the shareholder fallout that came from the company's decision to spin off its PC business and shutter its mobile devices business.
After Mark Hurd resigned after an expense account scandal and an investigation into a sexual harassment claim last year, and Carly Fiorina stepped down in 2005 under fire, Whitman has a lot of work to do to shape up the public perception of HP.
"She can cut through the politics," Chowdhry said.
Updated at 2:44 p.m. PT to include additional background and analyst comment.