California Insurance Commissioner Steve Poizner, right, answers a question during a debate with former eBay executive Meg Whitman for the California Republican gubernatorial primary Monday, March 15, 2010 in Costa Mesa, Calif. (AP Photo/Jae C. Hong)
That nasty web ad (you can see it at Conan Nolan's post here) from Steve Poizner's gubernatorial campaign would seem to be about pornography. I suspect that a big part of the intended message is really about guns. Concerns about firearms regulation has been, for decades, a driver of conservative turnout in California elections. Pornography doesn't have a record of swinging votes. With this ad, Poizner is seeking to appeal to conservatives by suggesting that his rival Meg Whitman was willing to keep gun sales off eBay while she was CEO there even as she permitted the sale of pornography (albeit over a separate site).
Here's the context, from an excellent Harvard Business School case study of Whitman's management of eBay, authored by Linda A. Hill and Maria T. Farkas in 2005. It's not available online so I apologize for not having the link. I obtained the case study more than a year ago, independent of any political campaign.
The lesson of the study: eBay had a libertarian ethos. It had a "historical hands-off approach," and didn't want to limit what was sold on the site. From the beginning, eBay struggled with how and whether to police the site. Eventually, the company decided to get involved with removing items that were fradulent or illegal. Under these rules, permitting the sale of pornography was an easy call -- just one of the many things sold on eBay. Guns was a more difficult subject, and to this day there is second-guessing about Whitman's decision in that area.
According to the case study, Whitman decided to go against eBay's established policy in late January 1999 and eliminate all auctions of guns and ammunition from eBay. This came after significant public criticism of gun sales on the site. In 1998, eBay had tried to limit problems with gun sales by requiring credit card verification for anyone who wants to buy or sell firearms. She was worried that Pierre Omdiyar, eBay's founder, might disagree, but he had come to the same conclusion. Financially, it wasn't hard to walk away--legal firearms represented less than 0.25 percent of the items on eBay, and other Internet auction sites either limited the sale of firearms or banned them all together. But they worried about what might happen if a gun the company sold ended up in the wrong hands.
At a company meeting with leading executives described by Whitman in the case study, "I was very honest with them. I told them, 'We have made this huge change in strategy. Don't be confused. Yesterday, we had this policy about items on our site; we have now thought it through and decided we have to eliminate the gun category. We feel we have tomake this change in policy for the long-term health of the company and because it is the right thing to do.' I also said, 'What are we going to do when we wake up and read that someone has bought a gun on eBay and done real damage? We can't live with that.'"
In retrospect, Whitman did right by her company. Industry analysts backed her, suggesting she was keeping her growing company, which was in the process of adding thousands of jobs, out of trouble. The stock price rose. But the online community of eBay sellers was "largely" opposed to the decision. Which is probably one reason why Poizner is picking at it with this ad.
What might this tell us about Whitman? Her instincts appear to be libertarian and deregulatory--but she will make exceptions when it's in her interests.