David and Tom Gardner recently interviewed eBay CEO Meg Whitman on The Motley Fool Radio Show on NPR. This is the third of five parts.
TMF: Yahoo! Auctions (Nasdaq: YHOO) got an early start in Japan, Meg, taking a lead that became insurmountable. eBay(Nasdaq: EBAY) Japan, by contrast, floundered. Update us on your international operations.
Whitman: International is now about a third of our total gross merchandise sales and slightly less of revenues because not every country has listing fees and final value fees, which is the fastest growing part of our business and a very profitable part of our business. We are No. 1 in every country of the world with the exception of Japan, as you pointed out. So we are really, really pleased with our overall international operations. You might have read just last month that we acquired the remainder of the equity interest in EachNet, which is the largest eBay-like trading community in China.
TMF: I want to hear a little bit more about that. Can eBay do some good business through EachNet in China? Is it possible to really make that work?
Whitman: We think so. It is a very large country with a trading history. EachNet is off to a very fast start and we think there is really an opportunity to create a transparent, level-playing field market in what will ultimately be the largest Internet market in the world. So, it is a long-term play. You have to have, I think, a 10- to 15-year horizon, but we are excited about the long-term prospects of EachNet in China.
TMF: How different are the business conditions in China? What do you face there that you might not face in another country or in the U.S.?
Whitman: First of all, Internet penetration is lower although gaining very fast. The infrastructure in terms of payments and the postal service and delivery is not as well developed as it is in the United States or Europe, but again that is changing incredibly fast. Package delivery has gone from being quite difficult three or four years ago to being now actually very efficient. So the infrastructure has some catching up to do, but I am so impressed with the strides that have been made in the Chinese market. I think in a few years the infrastructure will be equivalent.
TMF: Meg, perhaps I can infer your answer from a previous answer, but ultimately do you see eBay with more revenues internationally than domestically?
Whitman: Yes. Ultimately, we think eBay outside of the United States will be even bigger than eBay inside the United States.
TMF: We know you are... [you] must be an active buyer and seller on eBay or at least a buyer or seller.
Whitman: Yes.
TMF: Are you more active as a buyer or a seller on eBay and what have you been buying or selling lately?
Whitman: Oh, it changes from time to time. About twice a year, we go through the house and say what do we need and what could we sell on eBay? We just finished that process actually about a month ago so I have about 20 or 30 items up for sale. Everything from ski boots that were too small, snowboards, snowboard boots that were too small for the kids, an old rowing machine that we no longer use anymore, some clothes and shoes and things like that. Then I am always a buyer. I always check eBay first whenever we are thinking about buying things for the kids or for ourselves. Our most recent purchase in fact last night on eBay was a digital camera.
TMF: Meg, what is your member name?
Whitman: Actually, I don't release that.
TMF: What is your home phone number, Meg and your credit card number? (Laughter) Let me ask you this then: Before you sell something, do you think, "Honey, what the heck? Why don't I just sign it and then it will go for $100 more?"
Whitman: You know, I don't usually do that, either. I sign things for charity only.
Tomorrow: The "tipping-point" moment in eBay's history.
