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Shutterfly’s Strategy: A Conversation with CEO Jeff Housenbold (Part 2)

Posted on Friday, Mar 21st 2008

SM: What timeframe was this work with Raging Bull going on?

JH: This was in the 1998 – 1999 timeframe. We then raised a $20M round with CNET, CMGI put in money and we started doing some television on CNet TV. We had a financial hour and hired some on-air talent. It was a really interesting time. We sold the company to AltaVista for $250M – they were the last portal which had filed to go public.

I ran Raging Bull for a while after the buyout, then the CEO asked me to move out and run Mergers and Acquisitions and Business Development. We then reorganized and he asked me to become the General Manager. I had everything but Ad Sales and Engineering, so about 600 people, about a $380M P&L. I had Marketing, Business Development, Product Development, Program Management, the editorial staff, and website design for all of Alta Vista. This was a time when we had about 48% of the search market, and Google had less than 2%. Then the bust happened, and I did 4 rounds of layoffs which equated to about 400 employees. Then I received a call from eBay, so I went and joined eBay.

SM: What did you do at eBay?

JH: With eBay, I started out running Mergers and Acquisitions, and then I conceived and started the Business to Consumer Group which was all about getting large companies to sell on eBay, versus Mom and Pops. I signed up Dell, Wal-Mart, Lexmark, Kitchen Aide, and Home Depot.

Since the Economy was in a downturn they had a lot of excess inventory and were selling it on eBay. I took this business unit from $0 to $70M in 10 months. Meg then asked me to run Customer Acquisition and Retention. I did that and grew that team from 6 people and about $30M to over 150 people and close to $400M budget on a worldwide basis. It is the largest online advertiser today. I did the first deal with Google – I was Google’s very first AdWords customer in the world.

SM: eBay is the largest Google customer, right?

JH: They are in the top three. It really depends on the month. Expedia is up there, as is another travel company. In that role, I also did a $150M AOL deal, a deal with Microsoft and Yahoo. I was at eBay during the hyper-growth stage where over a 4 years we went from $450M to about $5B in Revenue.

SM: What year was that?

JH: That was January 2005, and I was not looking for a new job. I had been at eBay for almost 4 years.

SM: Why the interest in Shutterfly? JH: I was my high school and college yearbook photographer, and my wife and I spent $1900 on Shutterfly the year before I joined. I was a big customer and had been using it for five years.

The headhunter I had been using to find the CEO of a board I was sitting on called me and asked me for some names for the Shutterfly job. He called back a few weeks later and said the names were great but wondered if I was interested. I told him no thanks, because I was happy at eBay. He convinced me to go have breakfast with Jim Clark. Jim had founded Silicon Graphics, Netscape, and WebMD. We had breakfast, and it turned into lunch which then turned into dinner with other board members. An offer followed a couple of days later, and after a couple of weeks of diligence, and I accepted on Christmas Eve and I started in January 2005.

This segment is part 2 in the series : Shutterfly's Strategy: A Conversation with CEO Jeff Housenbold
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He states that Shutterfly is a cash cow bc of its printing business. The real cash cows are the customers who overpay for all Shutterfly products.

Anonymous Tuesday, July 15, 2008 at 1:21 PM PT