>> charlie: welcome to the program. tonight john done a hoe, the president and the ceo of ebay. >> as we've injected more innovation back to ebay one of the things we tried to do is buy teams where you have founders who are great disruptive thinkers who have been working hard to build their business. now inside a business they get a chance. inside a business they get a chance to innovate. they get a chance to have access to 120 million consumers and 25 million retailers. >> charlie: we conclude with alan blinder, the princeton professor whose latest book is called after the music stops the financial crisis the response and the work ahead. >> i thought like many of us americans today that our new president coming in 2009 looked like a great communicator. he was eloquent. he was a role model.

he spoke and he understood. it's not like he was not really understanding what was going on. he understood. but he gave very very few speeches. only one really major one. on the financial crisis. explaining what in the world happened to us. what are we going to do about it? why does that make sense? and hang on, folks, this is going to take a while. >> charlie: john done a hoe and alan blinder next. funding for charlie rose was provided by the following.

captioning sponsored by rose communications from our studios in new york city, this is charlie rose. from our studios in new york city, this is charlie rose. >> 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 on-line auction house but it became a giant of e commerce. 70% of its sales and also owns

pay pal an on-line 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. that's what e-bay 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 doesn't come directly at you. product search didn't 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 e-bay

with today's tech, what was today's technology and internet and reimagine, reinvent the company. >> charlie: did some people come to you and say if you do this you're 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, ebay's purpose has never really changed. our ebay founder said he measures success by positively impacting hundreds of millions of people's lives around the world and connecting them through trade. and so what we needed to do was to update that into today's internet and tomorrow's. 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 people's 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: here's the interesting thing. it didn't 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 it's not because it has these limitations. >> people would say they'll never shop on a mobile device because for a minimum they wouldn't feel safe putting payment information on. it wasn't 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 ebay's mobile app. 8,000 cars a week on a mobile app. we'll do over $20 billion of mobile commerce and $20 billion of mobile payment volume this year. that's closing on a mobile

device. so the shift in consumer behavior is enormous. it's 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. that's one of the big issues for them correct? >> yes. but we're 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. we've been able to embrace mobile with absolutely no hesitation. we monetize the same way. we're 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 e-bay 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 you're a tech... >> charlie: you get up every morning... >> if you're a techy you're constantly, i don't care who you are, founder or not founder you're worried about disruption. that's 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. what's 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 what's 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 i-pad. i don't 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. there's been a sea change of consumer behavior in the media. the i-pad 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. what's similar is technologies

enabling consumers to be in charge. it's 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, that's way out of line because i can go across the street and get it. >> really what's happening is people are starting shopping on a mobile device or on a web. retail last year, the off-line 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 haven't already done some homework on the web? you've done a search to say what product would i want? let me read reviews? >> charlie: you ask your friends. >> i've looked on facebook. and then the choice is the consumer choice we're 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. we're 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 don't think we'll ever be handling the goods. we'll 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. that's a very important point to these retailers. they don't 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 end-to-end user experience. software and the internet the fact that you're connected is enabling experiences we never could have imagined before. for instance, two experiences. one, i can right now... let's say i want to get a sandwich downstairs. you want to get a sandwich. you go to a deli. there's 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 they'll recognize you but if you were an average consumer they'd say hello you'd like the usual. it's waiting for you right there. you're getting permized service. you're avoiding the line. and payment is done right there. >> reporter: you don't have to do anything. >> so payment will be... you won't even know you're 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 they're going to have multiple screens in their lives. they'll have the mobile device as a screen. they'll 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 they'll want seamlessness across the screens. the actual smart phone itself may become the central control device for all of them. we're 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. we're organically growing in

roughly 16 to 20%. but we'll 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 we've injected more innovation back into ebay one of the things we've 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, i'd say a third to half. charlie: half at least? just basically making sure that you have the right people in the right place and they're motivated to do their best? >> absolutely. getting the right people.

coaching them. developing them. that's 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. that's the people element. so, you know, it's the only way you can build an enduring company. >> reporter: how come you guys couldn't make skype. >> skype wasn't 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 we'll didn't want to trade over skype. they just wanted to talk. >> charlie: here's what's interesting. there was a bad decision. you looked at it. everybody said at the table thisçó 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? >> it's 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 didn't have synergy with our core businesses we divested it. >> charlie: microsoft owns it now? >> it's a great fit for microsoft. in the meantime it's allowed us to focus our core business and focus on the commerce and payments and connecting people where it's our strength. >> charlie: is it likely you'll be in businesses we don't know five years from now? or is your model simply to do what you do better and better and better? >> we're in two enormous markets: commerce. then the payments part of commerce. so i think we'll continue to be in those markets. those are two of the largest, oldest markets in the world. what's going to be different, i think, is how we're doing

commerce and payments. you know the fact that we can now... we'll be able to walk into a store and they'll know who we are. we'll be able to have a personal relationship with retailers and with stores and... >> charlie: does that mean that tark it and wal-mart love you? >> well, we're increasingly partnering with retailers to help them because retailers recognizing that they've 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. you're going to upload all those cards in your pay pal wallet. you'll be able to pay whether you're 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 they've all gob on. elon musk. very disruptive grew of think thinkers. >> charlie: how do you find disruptive thinkers? >> they're young because they don't know any better. if you look at... >> charlie: if they knew better they wouldn't start. >> they wouldn't start. they grew up with the technology that maybe we didn't grow up with. they grew up with mobile. they can imagine things that we can't imagine. and then they perhaps most importantly they don't 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: it's 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: he's no longer running it. >> one is that he wanted to measure ebay's success on how do we positively hundreds of millions of people's 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 don't

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. >> he's 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 don't get talked about in silicon valley. silicon valley we just spend all of our time talking about the disruption and the innovation. that is the heart and soul but the timeless principles of management still apply. i learned many of those timeless

principles when i was at bane. >> charlie: from the whole group of partnerships you had at bane or who you were consulting with. >> absolutely. working with different clients. bane's experience. it comes to mind i read an interesting article over the weekend on lincoln's school of management. with the movie lincoln. and it was so striking that the... some of the principles are lessons that president lincoln practiced back then. still apply today. if you want to build an enduring company. the ability to confront and overcome adversity. resilience. the ability to listen thoughtfully, listen to people with all different points of view. and form a perspective. the ability to have enough emotional intelligence that you can stay committed to a broader purpose. and yet have the flexibility to make tough choices and challenges. so many of those things i learned earlier in my career i still apply today at ebay.

>> charlie: is that the culture you want to see at ebay? >> i want a culture that cares about its purpose and people join e-bay because of our purpose. i want a culture of innovation and i want a culture of learning and growth. where each of our people are living up to their full potential. they're learning, whether they're an engineer or whether in marketer or whether they're one of our customer support representatives. >> charlie: take meg whitman for example, with respect. before she left to go into politics and do other things, ebay was a declining company. does that say that terrific managers have a window in which they can do great things but they shouldn't stay too long? >> i wouldn't say that at all. let me comment on meg. then i'll comment... look, meg was a great ceo for ebay's first ten years. look at what it accomplished. >> charlie: and then? the second most important job for a ceo is to pick their successor. and meg found me. she said, you know i know

there's a technology shift going on. the next person, it's time to lead it. and i think we had probably the most seamless success you'll find in silicon valley. so i had a fresh set of eyes. i hadn't been part of the past success. i can bring an objectivity and a knowledge that was the future that i had to create. hopefully i'll be the right... >> charlie: the second set of eyes before you think about succession even. you should be thinking constantly about how to bring a fresh set of eyes in to help us to grow. >> absolutely. charlie: there are two interesting stories about you. it has to do with the family and one i think this was at bain. finish the story. your wife was an attorney correct? >> yes. charlie: she was going to san francisco. and you were with great love for the idea of family wanted to take the kids to school. and so you wanted to be there in san francisco. bain did not have a single client in san francisco. but you were therefore going to

resign and go do something in san francisco. there was a guy named teerny and he said what to you? >> we were actually living... we were living in san francisco. we were both living in stanford. my wife had just finished law school and she was a clerk for a federal judge in san francisco but she had to be the judges' chambers. we had two young kids at the time. our oldest two kids were i think 3 and 5. so i had to take them to school every morning. i was on the fast track at bain. i made the... i was traveling constantly. so i walked in to tom teerny who was the head of bain san francisco office. he is now the independent lead director. he's been mentor my whole career. i said tom i have to quit because i've got to be at home year to take the kids to school. he looks at me and says done a hoe you idiot. you don't have to quit. i said i have to take the kids to school every morning. he said, well we'll put you on a local client. i said, tom, we don't have any

local clients. he said we'll go out and get the local client. sure enough we got a local client. i was able to work part time that year. what tom reinforced afternoon what i think is so important about leadership is it can't be all work work work. you've got to be... >> charlie: reinforcing that idea it also reinforces the idea that, let's think about this and maybe there's an alternative solution we haven't thought about rather than just simply accept ing what is on the table. therefore, i can't just serve clients around the world. i have to serve clients. we don't have any clients. therefore it's over. it's not over if you can find clients in san francisco. what do you do to inform yourself? when i sat down i said how much do you read and where do you get it? you said how much is online and we talked about that. is everything you read having to do with simply being an informed citizen or an informed leader come online? >> a lot of either the benefit of living in silicon valley because i what i need to be

paying attention to is where is technology going? where is the internet going? where are the start-ups? i spent a lot of time with internet founders, start-ups and seeing things that, oh, my god i couldn't imagine that happening. and so the biggest source of new information for me is with often young founders and innovators in silicon valley inside and outside our company. i meet with a group of young people inside of our company. we've got 8 or 10 of the young people who are three or four levels beneath me who we ghettoing monthly. they bring in. what are they seeing at the edge? what do they think we should be doing at the edge? what is possible that i couldn't imagine? >> charlie: the other thing i've always wondered is why you can't create. everybody knows this is such a simple idea. a kind of entrepreneurial home within big companies that have the kind of market cap that you have or that amazon has. how do you create within the umbrella of what you are the fact that people who are young and aspiring to pursue their own

destiny will feel at home there? >> well, i think we're beginning to do that. as i mentioned we've made 20 ak which sigs over the last couple of years and probably 18 of those have been small companies. we've been able to retain 10 to 12 of the founders. those founders feel like they can innovate at scale. >> charlie: this is what mark said in the "new york times" on december of 2012. 20 years ago we did not know how the internet was going to get used by people. we for sure didn't know about mobile or tablets. mobile is a whole new level of reinvention so it feels like we're in the most fertile time of invention since the early '90s. >> absolutely. mark is on our board. i think the pace of change is just beginning. it's going to be impacting big fundamental things we do everyday in our lives like read media, like now shopping and paying. that's what excites us. >> reporter: is there a revolution as big as mobile coming down the pike?

>> i don't know if there is going to be. i think it's going to be the most fundamental thing that we see in this decade that is impacting our lives. obviously part of what the internet is enabling is more engagement, more social engagement so i think that it initially starting on face book. but i think that social and that ability to engage and build personalized relationships you'll see that coming into commerce and other parts of our lives. >> charlie: people talk about this all the time. there is amazon. there is google. there is facebook and there is apple. those four companies. and although in different businesses they're getting in each other's business. is that the wave of the future. everybody wants to have a search capability and everybody wants a whole range of social media that they can accent and improve and enhance their own business but also be competitive with the other guy because he's getting in their business? >> well, the first thing i would say "and there's ebay." >> charlie: and i would say and

there's microsoft. >> we're a commerce platform that touches 175 billion dollars of commerce. almost 20% of all retail, all e commerce and 2% of all retail. but i think what all those companies the story of technology is and the story of the internet is companies have tended to be successful at one thing at their core. google is the best in the world at search and the best in the world at advertising. facebook is the best in world at social connections. we want to be the best in the world at commerce. those do overlap on the edges but to date no one has been successful in fundamentally getting... >> charlie: is it possible to imagine... i mean, if this thought has not occurred to you, then i'd be surprised. is it possible to imagine in signed of tablet that is created by ebay or some kind of mobile device that somehow enables you to perform the service you do better than any other smart phone that is on the market anywhere? >> well, we think about it... charlie: and the same way that people talk about whether face book will develop a phone or somebody else will develop a

phone. a question we ask all the time. >> sure. but i think those are steps toward broader goal. if our goal is to enable commerce, when i think about devices i go to our customers. so i talk to retailers. and retailers say you know what john? there's no way i'm going to accept... i'm going to handle people that use apple phones differently than android phones differently than microsoft phones. people coming through the line if they're going to pay, i want one standard procedure. so pay pal now works with all different mobile devices and all different mobile operating systems so for mobile to have an impact inside stores, it's going to have commonality. same thing with consumers. we talked about it earlier. consumers are are going to have multiple screens. those screens will have to be compatible with one another. i don't think you're going to see more closing of these eco-systems like some say. i think you're going to have continue to have consumer choice.

in our choice i don't believe we have to be a device maker. >> charlie: i'm going to throw out names. tell me what you think about them. jeff bezos. >> done an incredible job at amazon. the resilience to be able to be up dn up down and stick with it. >> charlie: and his approach to the consumer is like razor. >> razor focus. charlie: steve jobs. obviously he was the once in a generation visionary in terms of repeatedly producing products that were beautiful intuitive and loved. >> charlie: what do you make of the fall in their stock price? >> i think my guess is tim cook and that team are not worrying about the short term stock price. they're building for the longer term and stocks go up and down. if you get too focused on that you get distracted. >> charlie: larry page. reated a great company called google who is going through their first real challenges in terms of small disruption around the edges. >> charlie: what is that disruption? >> well, the disvupg is how

search is being used. it's a different metaphor. facebook could potentially start searching. disruption is never head on. it's always around the edges. what that forces us to do is a large technology company is to reimagine, reinvent how we operate. >> charlie: mark zucke burg. a brilliant visionary who has done a phenomenal job with facebook. >> charlie: did you see social media coming? >> i saw it in my kids early on when it was just on campuses but for it to be become the global phenomenon, i couldn't have guessed. >> charlie: great to have you here. thank you. >> charlie, it's been wonderful to be here. thank you. >> charlie: back in a moment. stay with us. alan blinder is here from 1994 to 1996 he was vice chairman of the federal reserve board of governors. he was also an economic advisor to president clinton. now he teaches at princeton. alan blinder's latest book is after the music stops, the financial crisis. the response and the work ahead.

he says it tries to answer the question, how do we get into this mess and how do we get out of it? i am pleased to have alan blinder back on this program. welcome. >> thank you very much. charlie: i'll say this to you. if you're going to write a book, then you need somebody to endorse it. this is not bad. a master piece. simple. straightforward. and wise. president william j. clinton. >> i have to admit i was pretty pleased with that endorsement. >> he actually read the book. i thought he would skim it. >> charlie: could you tell for sure. >> i wasn't going to do that. i think it's impolite to a former' president. >> charlie: you think he read the book. >> he said he read the book. charlie: here was the question though. before we talk about the book. let's talk about where we are today. we had a dip in the fourth quarter. do you read anything into that? >> not very much. we had a dip in the fourth imparter in the g.d.p. we didn't have a dip in jobs you might have noticed. a few strange t