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Whitman's eBay Legacy Could Help, Haunt Bid

Former eBay CEO Meg Whitman
Former eBay CEO Meg Whitman
Source: Reuters
By the numbers, Meg Whitman's decade at eBay was a resounding triumph. The once-fledgling startup had less than $5 million in revenue when Whitman took over as CEO, but grew to a $7.67 billion business by her last full year at the helm.

Now that Whitman has thrown her hat into the ring to succeed Arnold Schwarzenegger as governor of California in 2010, it's likely that tenure could play an important role in shaping public opinion around her candidacy.

Her campaign comes as the economy remains at the forefront of political debate. California faces a budget shortfall of around $40 billion, a microcosm of the blight lawmakers are wrangling with at the federal level.

As a result, Whitman seems likely to trade heavily on the business acumen she exhibited throughout her 10 years at the helm of eBay (NASDAQ: EBAY), turning a startup with a quirky business model into a multibillion-dollar household name.

"California faces challenges unlike any other time in its history -- a weak and faltering economy, massive job losses and an exploding state budget deficit," Whitman said in a statement announcing her exploratory committee. "California is better than this, and I refuse to stand by and watch it fail."

Early polling casts Whitman, a Republican, as a front-runner in what could be a crowded field. According to a recent survey by Probolsky Research and the California newspaper Capital Weekly, 14 percent of likely Republican voters said they backed Whitman, trailing only Tom Campbell, a business professor and former congressman, with 15 percent of likely voters.

Whitman will also lock horns with California Insurance Commissioner Steve Poizner, another Silicon-Valley billionaire who has announced his candidacy.

On the Democratic side, Sen. Dianne Feinstein, who has not yet formally announced her intention to run, enjoys an early lead in the Probolsky poll with the support of 36 percent of likely voters.

A mixed legacy from the eBay years

But how much of eBay's success was inevitable? While Whitman can be expected to weave her stewardship of the firm into a rags-to-riches political narrative, her political foes might retort that eBay's winning concept, brought to market when e-commerce was only beginning to gather steam, made its meteoric rise a foregone conclusion, regardless of who was calling the shots.

"I think that there is definitely an argument that her opponents will make that she led the company when the expression inside the company was, 'Even a monkey could drive this train,'" said Ina Steiner, a long-time eBay watcher who runs the Web site AuctionBytes.com.

[cob:Special_Report]Nevertheless, Whitman, who presided over the company's international expansion, can claim credit for having the right people in the right place to ensure that eBay didn't end up on the ash heap of startups with cool concepts done in by weak management.

But eBay is not the darling of the Web that it once was. Increased competition from Amazon and a host of smaller auction sites have taken their toll, while the bruising economic climate saw the company's revenue decline for the first time last quarter.

The auction giant has also come under fire from some who had once been among its most loyal supporters -- its sellers.

Page 2: Pros and cons of tying Whitman's image to eBay