Another product of Whitman's EBay years continues to dog the company. EBay is locked in dueling lawsuits with Craigslist.com, perhaps the world's best-known classifieds website, whose owners accuse EBay of stealing their proprietary financial information to launch a competing website.
The seeds of the dispute were sown in 2004, when EBay bought about a third of Craigslist. Founder Craig Newmark and Chief Executive Jim Buckmaster were wary of what a profit-driven, mainstream corporation might do to their proudly low-budget website. They signed the deal, according to Buckmaster's December 2009 testimony in a Delaware courtroom, after Whitman gave her "personal assurance" that EBay would "gracefully unwind" the collaboration if anyone became uncomfortable with the partnership.
That discomfort arrived with a shock in the summer of 2007, when EBay announced the U.S. launch of a classified ad site — Kijiji.com — designed to compete directly with Craigslist.
Buckmaster said in court that he demanded Whitman sell EBay's share of Craigslist. He didn't want a competitor on the board with access to his company's most sensitive financial data and Web traffic statistics.
Whitman testified that she refused to sell. But she assured Buckmaster in an e-mail that her company, "with the emphasis our culture places on integrity," had taken steps to protect Craigslist's trade secrets from the Kijiji team. Whitman later acknowledged in court that she had no idea what steps EBay was taking when she made her assurances.
"The firewall would have lived at a much lower level," she testified in the lawsuit that EBay filed against Craigslist. That suit accuses the smaller firm of violating its shareholder agreement with EBay through actions that Craigslist executives say were necessary to protect trade secrets. They included diluting EBay's stake in their company enough to remove EBay from the board.
Craigslist countersued, accusing EBay of unfair competition and false advertising for, among other things, buying ads on search engines that invited users to click http://www.craigslist.org. But the link took customers to EBay's new site instead.
Without acknowledging any role in buying the ads, Whitman testified that she didn't think they were deceptive or even particularly unusual.
"This didn't completely surprise me," she added. "I mean, this is sort of typical. . . . When you actually type in 'Meg Whitman for Governor,' guess who has bought the keywords next to Meg Whitman for Governor? My gubernatorial opponent."
Bounds declined to answer specific questions about the ongoing litigation.
The tolerant attitude Whitman displayed on the witness stand in December contrasts with her actions in 2008, when she sued an independent entrepreneur for trademark infringement and "political cyberfraud" after discovering that he had registered several potential Whitman campaign Web addresses, including whitmanforgovernor.com, megwhitmanforgovernor.com and Meg2010.com.
Her complaint demanded hundreds of thousands of dollars in damages and an advertising campaign, funded by the entrepreneur, to "correct any consumer confusion or misperceptions." She took her case to a United Nations arbitrator in Switzerland — where she lost — before signing a secret settlement.
Earlier in her career, she ended another court case with a secret settlement after being sued, at age 39, for age discrimination.
In December 1995, eight months after Whitman took over as chief executive of the flower delivery service FTD, she fired her 55-year-old technology chief, Dave Carlson. She replaced him with a man almost two decades younger, according to the lawsuit Carlson filed in a suburban Detroit court near FTD's headquarters.
Whitman told some staff members that the company was too "old and stodgy," Carlson alleged. He also said she told a conference room full of senior managers: "We need about 15 killer young executives."
FTD's vice president of government affairs interrupted, telling Whitman that she didn't mean to use the word "young," the complaint said. "Actually, I do," Whitman allegedly replied, "but I get your point."
Carlson declined to comment because of the confidentiality agreement he signed to settle the case. Whitman's attorney denied Carlson's allegations in his response to the lawsuit.
Bounds said in his statement: "Suits of this nature filed against executives of major companies are commonplace today. Too often they are frivolous and in no way reflect the true performance of management."
This begins a series of articles examining the backgrounds of the major candidates for California governor and U.S. Senate in the June 8 primary election.