Charlie john done a hoe is here. He became ceo of ebay in march of 2008 but he is not a founder of ceo like zucker man, page. He rose to the ranks before moving to ebay. Under his leadership ebay has gone from strength to strength including a 75 rally in share price. The Company Started off as an Online Auction house but it became a giant of e commerce. 70 of its sales and also owns pay pal an online payment system. I am pleased to have him here at this table. Welcome. Thank you, charlie. A pleasure to be here. Charlie my pleasure. So when you arrived at ebay and had the kinds of responsibilities you had before, what did you see . Well, the fascinating thing about Technology Businesses in the internet is that a company can become a global brand and get global reach in a stunningly quick period of time. Thats what ebay did in its first five to ten years. He became a global phenom in a stunningly short period of time. Just as you can disrupt, you can be disrupted. Ebay when i got there was beginning to be disrupted itself. Charlie by . The way disruption happens it doesnt come directly at you. Product search didnt exist when ebay started. Google had started. Craigslist had started. What we needed to do was to face up to the reality of the change and in essence reinvent ebay with todays tech, what was todays technology and internet and reimagine, reinvent the company. Charlie did some people come to you and say if you do this, youre going to cannibalize what we have. Absolutely. At some point you have to choice. The dilemma in technology is either you cannibalize yourself or someone else is going to do it. We took the tough medicine, labeled it a turn around. No one liked it at first. That allowed us to focus on fixing the fundamentals of the business which have now turned beautifully. Charlie as you led those conversations, what was your definition of what you wanted ebay to be . Well, ebays purpose has never really changed. Our ebay founder said he measures success by positively impacting hundreds of millions of peoples lives around the world and connecting them through trade. And so what we needed to do was to update that into todays internet and tomorrows. For instance, one of the key bets we made very early on was on mobile. We saw that mobile technology was going to be a profound force in peoples lives. So we bet early on mobile and we bet hard. Charlie what did you see about mobile and what year are we talking . We first started in 2008 end of 2008 early 2009 we saw that the smart phone was changing how people behaved. Charlie heres the interesting thing. It didnt seem that way necessarily for everybody because everybody would have done it. If we now look back it seems obvious even in 2008 that smart phones would dominate the internet. Well, it did. Back then, you could see them being used for things other than shopping. And so what was the bet we made was that people would not just use them to send email oncore seum news but they would increasingly use them in all parts of their lives. The smart phone would become the Central Control device of our lives sniem i want to understand the risk that you took. What did nay sayers say to you when you said mobile is going to dominate . Were there people who said no its not because it has these limitations. People would say theyll never shop on a mobile device because for a minimum they wouldnt feel safe putting Payment Information on. It wasnt safe. People would still want to go into stores or a larger form factor like a computer. We understood mobile to be just another screen. It was another screen by which consumers could access the web seven days a week 24 hours a day. Reporter has it happened faster than even you imagined. Absolutely. I never could have imagined the sea change in Consumer Behavior over the last three to four years around the mobile devices. I mean, charlie, people are buying,000 cars a week on ebays mobile app. 8,000 cars a week on a mobile app. Well do over 20 billion of mobile commerce and 20 billion of mobile payment volume this year. Thats closing on a mobile device. So the shift in Consumer Behavior is enormous. Its having a transformative effect on the two industries. We compete in retail and payments. Charlie but also take facebook. They understand mobile is important. They also are trying to figure out a strategy to advertise on mobile. Thats one of the big issues for them, correct . Yes. But were blessed in that we embrace mobile. Not concerned about cannibalization. We monetize the same on mobile as we two on the web. We only get paid if someone buys something. Weve been able to embrace mobile with absolutely no hesitation. We monetize the same way. Were just trying to focus on following the consumer in many ways. Charlie when you made these decisions and you look forward, what worried you about it . Anything . Did you simply look at it and say, we have no choice . Much more the latter. We were in the midst of turning around the core of ebay business and injecting innovation back into the company. I knew we had to make a couple of big bets. We made two mobile and pay pal. There was no choice about making sure both of those were successful. In hindsight both have turned out as well or better than i could have guessed. Charlie pay pal was disruptive when it came on. Some people worried that pay pal is vulnerable to being disrupted by square or Something Else. Do you worry about that . Sure. I worry about disruption every day. Are you kidding me . I mean if youre a tech. Charlie you get up every morning. If youre a techy youre constantly, i dont care who you are, founder or not founder, youre worried about disruption. Thats what spurs you to do innovation, that what is what spurs you to consistently make change. The biggest change with pay pal is driven by the mobile device. Whats happening in the world of retail and payments is that mobile device has blurred if not obliterated between online and off line between what used to be called e commercial and whats now called retail. Charlie eliminate the e from e commerce. We call it commerce. Charlie because you can go into the store and therefore take your smart phone and do your shopping. Do your shopping. Or that you have total choice. Consumers feel like they have a mall in their hands now. The analogy i use is take your industry, media. Charlie take mine. People talked about the digitization of media. In reality other than music not much really changed until the ipad. I dont know about you but i consume my media very differently. I want my news, my entertainment when i want it, how i want it, where i want it. So do millions of people. Theres been a sea change of Consumer Behavior in the media. The ipad is less than three years old. The same thing is about to happen to retail and payments. The same kind of transformative shift in how consumers behave. Whats similar is technologies enabling consumers to be in charge. Its no longer the retailers saying you can only do this in my store or even an e commerce site saying you can do this on my site. Consumers say i want to do what i want when i want how i want it. Charlie you can go on your splatter phone and say no, thats way out of line because i can go across the street and get it. Really whats happening is people are starting shopping on a mobile device or on a web. Retail last year, the Offline Retail business, there 10 trillion. In over half of all retail transactions the consumer accessed the web at some point in the shopping experience. Think about yourself. How many times do you go into a store now where you havent already done some homework on the web . Youve done a search to say what product would i want . Let me read reviews . Charlie you ask your friends. Ive looked on facebook. And then the choice is, the Consumer Choice were trying to give consumers is do i want to buy it and have it shipped home to me tomorrow . Do i want to buy it and pick it up in the store . Charlie some say you want to be amazon. No, no. We have a very different approach. Amazon is a retailer. Were a Technology Platform that is helping retailers and Small Businesses all over the world. Charlie you might want to be Something Else tomorrow or the next day. I dont think well ever be handling the goods. Well never be a retailer. Charlie the transaction first. Commerce and payments platform that partners with retailers all over the world, large and small, to help them compete in this changing commerce environment. And we will never compete with them. Thats a very important point to these retailers. They dont view us. Charlie retailers will never compete with you. We want to enable you to succeed. Charlie in mobile and in your business and in many other businesses, is Software King . Is that what makes the difference . You have the Better Software . Well, i think the software is the tool that allows you to build a better user experience. And a better endtoend user experience. Software and the internet, the fact that youre connected, is enabling experiences we never could have imagined before. For instance, two experiences. One, i can right now. Lets say i want to get a sandwich downstairs. You want to get a sandwich. You go to a deli. Theres always a long line in the deli so you open your pay pal mobile app. You in essence check in. You preorder what sandwich. When they walk downstairs, now theyll recognize you but if you were an average consumer theyd say hello, youd like the usual. Its waiting for you right there. Youre getting permized service. Youre avoiding the line. And payment is done right there. Reporter you dont have to do anything. So payment will be. You wont even know youre paying. Charlie when you look at the landscape in terms of mobile where will it not go . Is it going to go everywhere . Is anything that you still do on your whatever version of p. C. You have or whatever desktop you have, do you still do anything . Sure. Sure. The way we think about it and the way i think consumers are going to think about it is theyre going to have multiple screens in their lives. Theyll have the mobile device as a screen. Theyll have a tablet. They may have a laptop. Their tv. Their car. Store front windows are going to be screens, right . The screens in the subway. So any of those screens a consumer can access the web and the screens that they control theyll want seamlessness across the screens. The actual smart phone itself may become the Central Control device for all of them. Were working to provide an experience across all of those screens. Understand this simply to be one more screen. Charlie do you expect to grow by acquisition or internal growth. A combination of growth. Were organically growing in roughly 16 to 20 . But well make acquisitions where we see an opportunity to add to that. Charlie, the really interesting thing is the acquisitions have been an enormous source of talent for us. In particular. Charlie bringing in smart people. Smart people and in particular bringing in good disruptive thinkers as weve injected more innovation back into ebay one of the things weve tried to do is buy teams where you have founders who are great disruptive thinkers who have been working hard to build their business but now inside a business they get a chance. They get to a chance to innovate. They get a chance to have access to 120 Million Consumers and 25 million retailers. Charlie how much of your time is about resource management, Human Resource management . Oh, id say a third to half. Charlie half at least . Just basically making sure that you have the right people in the right place and theyre motivated to do their best . Absolutely. Getting the right people. Coaching them. Developing them. Thats probably a quarter or a third of what i do. Interfacing with people around product reviews, around business vee views, around getting out where our people all over world. Thats the people element. So, you know, its the only way you can build an enduring company. Reporter how come you guys couldnt make skype. Skype wasnt the right fit. So when we. Charlie right fit in terms of . When we initially bought skype, ebay is all around connecting buyers and sellers. Our platforms connect buyers and sellers to do commerce, to do trade. Connected commerce and trade. We thought skype would be another way that it could be used in commerce and trade. It turns out skype was an incredible way to connect people but well didnt want to trade over skype. They just wanted to talk. Charlie heres whats interesting. There was a bad decision. You looked at it. Everybody said at the table, thisco is great. Will you skype to connect people with product . Right . Charlie you were wrong. Fundamentally wrong. Absolutely. Charlie when you look back at that, the lesson is . Its a risk that i think was worth taking. Who knew . I mean at that time. Technology is changing so fast. We got more for it than we paid for it. And the important point is once i recognized that it didnt have synergy with our core businesses we divested it. Charlie microsoft owns it now . Its a great fit for microsoft. In the meantime its allowed us to focus our core business and focus on the commerce and payments and connecting people where its our strength. Charlie is it likely youll be in businesses we dont know five years from now . Or is your model simply to do what you do better and better and better . Were in two enormous markets commerce. Then the payments part of commerce. So i think well continue to be in those markets. Those are two of the largest, oldest markets in the world. Whats going to be different, i think, is how were doing commerce and payments. You know, the fact that we can now. Well be able to walk into a store and theyll know who we are. Well be able to have a personal relationship with retailers and with stores and. Charlie does that mean that tark it and walmart love you . Well, were increasingly partnering with retailers to help them because retailers recognizing that theyve got to reach consumers online, on mobile devices and on the web. Charlie they need you because you have that many people depending on you through your own mobile, through your own applications and software. And our Technology Platforms. Pay pal is a Technology Platform that enables you to pay online on a mobile device or in the store. Pay pal is going to be a mobile technology where the notion of your physical wallet is going to seem like an arcane thing three or four years from now. Youre going to upload all those cards in your pay pal wallet. Youll be able to pay whether youre in a store or on a mobile app or at home on the couch. Pay pal will enable that. Charlie pay pal has interested me because of the number of people who came out of that to go and do really great things in the text sphere. Those guys who were founders of pay pal have gone on to do other interesting things. An astounding group of people. Charlie dabbing dorsey . No, not jack. And theyve all gob on. Elon musk. Very disruptive grew of thin thinkers. Charlie how do you find disruptive thinkers . Theyre young because they dont know any better. If you look at. Charlie if they knew better they wouldnt start. They wouldnt start. They grew up with the technology that maybe we didnt grow up with. They grew up with mobile. They can imagine things that we cant imagine. And then they perhaps most importantly they dont know any better so they go for it. They try. You know, i love watching Companies Like uber. You would say, renting out . Renting out your apartment . How could that be safe . Charlie the first time i saw that presentation i thought really . And then they have more rooms than many hotels. Very much like when ebay was founded. Two human beings who had never seen other trading from different parts of the world. Charlie and one trusting to send the product and the other trusting to send the money. The same thing is happening now in this collaborative consumption economy. Charlie how much of the auction business remains a part of your dna some. Well, auctions is just a format now in the core ebay business. Charlie its the declining part of revenue as this other thing grows. Exponentially faster. We offer Consumers Choice of how they want to pay. Charlie are people doing less of that then or not or is it just simply less compared to the volume of the increasing thing. The volume compared to the increasing thing. Charlie there are still a lot of people who want to go and rummage in the auction world and find something they like rather than go to a store and find something new. Yes. Auctions are good for things that are. Have uncertain value. So a used item. Or a really scarce item. Auctions are a great format for that. But for most of things, people would prefer to have a fixed price because they want the satisfaction of buying it immediately. Charlie did you have. I mean, if you look at the role that you play today, one of the leading technology companies, do you wish you had a different kind of experience . Or did you have in your judgment looking back the best possible kind of experience . You know, i think the best possible kind of experience in the following way. What drove me to ebay was pierre told me he had two criteria of success. Charlie hes no longer running it. One is that he wanted to measure ebays success on how do we positively hundreds of millions of peoples lives through trade. Two, he wanted to do it over decades. He was Crystal Clear he wanted to build an enduring company. He said to me, john, i dont want just a hospital company. I want one that endures 20, 30, 40, years. To do that he stepped back. He did what many founders do. There are brilliant founders that have grown their companies enormously beings pierre because he wanted it to endure. He first empowered meg. Then he empowered me to take it forward. And to build an enduring company. Charlie the exciting thing about him. Hes an innovator in so many ways but what is, i think, to build an Enduring Technology business, it fakes an incredible focus, an intense focus on the Disruptive Innovation that is unique to technology. I spend a lot of my time on that. But, charlie, the timeless principles of leadership in a business also apply. Those dont get talked about in Silicon Valley. Silicon valley we just spend all of our time talking about the disruption