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Sunday, June 01, 2003

D: Interview with Meg Whitman and Barry Diller

The following are my notes from the May, 28, 2003 interview with Meg Whitman and Barry Diller, conducted by Kara Swisher at D: All Things Digital. (Again, please don't mistake these jottings for a verbatim transcript or a complete portrayal. I'm a highly selective listener and a most imperfect note-taker.)


Swisher: Why have your companies been successful?
Whitman: eBay was just a brilliant idea, a marketplace that couldn't exist without the Internet.
Swisher: (Asks about "USA Interactive.")
Diller: I was intrigued by interactivity really early. A mixture of serendipity and curiosity.
Swisher: (Asks about what's to come.)
Whitman: The next five years will see as much change as the last five. UI changes. "I assure you my mother calls me [for help as she gets lost on the site] all the time." eBay is user generated content, and will always reflect the dynamic community of users. Changes will involve improvements to navigation, etc.
Diller: Regarding, initially it provided a serious service for people to meet each other with the goal of being together, not flirting. We broadened it to make it more about "flirt." Added voice and video features. (Brief discussion of what's in the voice and video.) "We don't want anything to do with it, it's pure point to point. And I guess you can toss out 'pure.'" We think it's about every kind of match you can imagine. We match people. (Hmm, dating services as social software?) There's a personality test that's very interesting. "I think this word content is a stupid word. It's the product. The product gets richer as you learn things and find out things and do what you do."
Swisher: Asks about feedback, what do your consumers want?
Whitman: Ours break down into two categories. Sellers want a platform that helps them build their business, merchandise their own brand. They were screaming for PayPal. That was a catalyst of PayPal and eBay to do the deal. PayPal was the de facto payment standard on eBay, and we kept hearing, it would just be better if you integrated. Sellers want more help with overseas transactions. On the buyer side, two of our growth areas are home and business and industrial.
Swisher: (Asks about importance of the Buy It Now/fixed purchase price option.)
Whitman: It accounts for about 26% of our sales. Some buyers like it.
Swisher, to Diller: You have a lot of businesses that lend themselves to broadband.
Diller: Any time you need pictures and data and a pipe going two ways broadband is important, but there's no point yet in spending a lot of money getting products ready just yet. Everything we do is digitalized. HSN is complete video, 24/7, all through a digital process. Pretty soon when the pipe is big enough the video and online sides will come together.
Whitman: Broadband is great for eBay, but we have not yet invested very much in developing products that take advantage of it. 80% of our users are still on dial-up. We'll take advantage of broadband as it becomes more prevalent. Korea is the most wired country in the world. In Korea, we do have some unique programs that take advantage of some of this.
Swisher: Will the shopping experience become more immersive, or just a souped up version of what you're doing now?
Diller: It will, of course. All the things you can do will be fluid. There's an hour drama in Korea with 1.7 million subscribers, each paying a dollar an episode to watch. Editorship will shift from the old system, of having people do it for you, to your doing it yourself. We're at the first leg of all this. In Hollywood, this has people quite scared but this is good, hopefully it will lead to better programming. Whenever you can get a small number of people to more than pay for the production, this is better than straight broadcast. (To Whitman, referring to an earlier mention of eBay television show efforts.) If you went to your users, you could get enough subscribers to support an eBay show.
Swisher: (Asks about importance of WiFi to their businesses.)
Diller: Citysearch is perfectly suited to seamless WiFi.
Whitman: WiFi access is good for us, although the initial uptake on the eBay cell phone/PDA software far underdelivered on our expectations. Again (echoing Jobs), eBay's not perfect for a small screen. We'll keep offering services as WiFi becomes more pervasive.
(There's a funny moment when Barry Diller notices Kara Swisher has notes written on her hand—per Diller, "in complete, declarative sentences.")
Swisher: What is eBay doing now?
Whitman: It's a worldwide marketplace. In 27 countries today, can be in many more. Strategic decision is to stay focused on this very large opportunity. What we're good at is running a marketplace.
Diller: Our strategy is the be the largest and most profitable ecommerce company in the world using multiple brands.
Swisher: So, we've been asking folks what would interest them if they were seventeen and starting over again today...
Whitman: Probably biotech or stem cell research.
Diller: It's most important to follow your curiosity. I don't think you go into stuff because there's an opportunity there, but because it arouses your curiosity.

Audience Questions

Audience member, to Diller: You've been outspoken about media concentration. [More.] What's the impact going to be if control gets tighter?
Diller: You're referring to the FCC's June 2 rulemaking, and loosening restrictions on cross-ownership. The issue is not about consolidation, it's this: there are 5 entities that control 90% of what you see and here. What we need is sensible, wise regulation that will make it so you can still hear independent voices. It's not about size, but when you have size you have to have careful oversight and regulation or you get in trouble. If these entities control the broadband types as well, they'll sit on the tollbridge. The size issue can't be met by just tossing everything out.
Audience member: (Interjects the conference's first blog reference.) Along these lines, Larry Lessig has written recently on his blog that the Internet is dying. What do you think?
Diller: Not enough people are saying enough about this. We need to get it out there.
Audience member: regarding eBay, what about letting people sell themselves, their loyalty. "I'll be your customer, for X months." Whitman: We've experimented with a broader range of saleable items, but what eBay reacts to is the demands of its users. The "services" category has only been moderately successful.
Esther Dyson, from audience, to Whitman: Are you experiencing tension between serving the small guys and the more wholesale side of market?
Whitman: Wholesale is a new category, and we think they coexist quite nicely, the pricing is consistent no matter how large or small the seller is. Sellers can get nervous when changes occur. For example, Disney selling on the site caused concern among collectors, but it wound up helping them and being embraced. The site is an economy, it's a marketplace that is self-regulating.
Audience member: (Asks about sniping.)
Whitman: It's an economy, and that was an innovation that occurred. Fixed price is an alternative.
Audience member, to Diller: (Asks about shopping models.)
Diller: The thing you've got to get to is it's on all the time, will become a shopping medium for daily needs, commodities of life. (It was either here or earlier that Swisher mentioned a well-known Barry Diller quote about the convenience of buying underwear in your underwear.)
Audience member: (Asks about marketplaces v. portals: Yahoo, Google.)
Whitman: Google does an awesome job for us, we buy words on behalf of our users. We in turn help the richness of their services. We have to be nimble as well, think about what the right thing to do is over the long haul. We're not the only place to buy goods on the 'Net, never thought we were. Will continue to navigate through the changes that take place.

(Unfortunately, I missed most of Dr. Richard Klausner's remarks, but I understand he was excellent. Next up in my notes: Yahoo's Terry Semel.)

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