Gratuitous Advice



Ebay has two problems.  One major and one minor.  


Ebay has had an astounding success in conquering a market. It is a service monopoly, a concept I have discussed elsewhere.  The national internet garage sale market. Thousands of people make a living on Ebay and many thousands more will learn to do the same thing. Ebay does an excellent job of servicing this market.

The problem is that future growth will be modest and limited to the United States and a few other nations.  The market is not multi-cultural, garage sales don't cross international boundaries well.  Selling much else on Ebay, outside the garage so to speak, has no future.

As Ebay's limited future becomes evident to the equity market, Ebay will be bought out and made a trivial part of some larger business that can use a stable cash cow.

Solution: Buy back enough Ebay stock to make a buy-out impossible.  If necessary buy a large chunk of the stock back and put it into a trust that will not sell out.


The Ebay subsidiary, PayPal is a managerial nightmare.  This online payment system is so poorly run that it has several websites dedicated to creating lawsuits to destroy PayPal.  Given the incestuous effectiveness of the web in bringing angry customers together, PayPal will be sued and severely damaged if its horrid management is not fixed promptly. 

Solution: Set aside $10 million to hire management consultants experienced in handling bad debt, charge offs, fraud and the operations of a loan supervision department.  Settle the class actions early before suing PayPal becomes an industry.



Boeing is two companies. One manufactures airplanes and related products, the other services these products.  The manufacturing company faces horrific capital needs and survives in a volatile competitive market.  The service company operates in a stable market with long term contracts and weak competition.

Problem: these two companies require different kinds of managers and management structure.

Solution: Separate the companies.


United Airlines

Problem: management drove the company to bankruptcy

I suggest that the company be split vertically. United Aircraft and United Flight Service. United Airlines with $14 to $19 billion in revenue has very little net worth, maybe a couple of billion dollars. I would guess that half of the net worth is repair facilities and the paid off lease portion on their 540 planes. The other half of the net worth is their gates and airport facilities at 130 U.S. airports and 27 foreign locations. I would put the pilots, planes, maintenance workers and facilities in the United Aircraft company. The gates, airport facilities, stewards, gate staff and customers in the United Flight Service company.

United Aircraft company would initially fly passengers for United Flight Service, but would soon fly for other airlines and charters. United Aircraft would start off with a contract from United Flight Service which initially has all the customer revenue. United Aircraft would optimize its flying efficiency, standardize its planes and deal with the risk and reward of variable fuel prices. It would negotiate with the two toughest unions: pilots and maintenance. United Aircraft would quickly become one of the most cost effective carriers,with revenue from many airlines. It would have a stable workflow and optimum plane utilization.

United Flight Service would focus entirely on passenger relations and satisfying the complex array of passenger needs, fees and schedules. After an initial period, United Flight Service would begin buying aircraft services from multiple suppliers and encourage competition in aircraft provisions. United Flight Services company would be a high cash-flow operation with plenty of opportunity for banking and credit functions. Its primary focus would be marketing and customer satisfaction.

I don't know how the 80,000+ employees would be distributed, nor the way overhead in administration would be distributed. The two companies would become models for the airline industry. They would separately be better managed, better focused and certainly more flexible, than others in the industry, in responding to changing market conditions.