(FORTUNE Magazine) – It's a drizzly, steamy mid-July morning in Berlin, and the executives of eBay Germany are presenting their hearts out. In an un-air-conditioned conference room, the half-dozen young German managers are bemoaning the fact that online auctions have been relatively slow this summer. They're not used to setbacks like this. Worse, they have to explain this not just to their boss, but to their uber-boss: eBay CEO Meg Whitman, who has popped in for a visit from California.

To tell their story, they're speaking English, but really they are using the international language of eBay managers: statistics. Out comes a dizzying array of PowerPoint slides detailing user numbers; S-curve regression analyses of site performance; and even the relationship between sunlight and auction bidding.

Whitman chews on a pen and scribbles notes on a white legal pad. She's dressed in dark-green slacks, a yellow checked shirt, and a beige sweater thrown over her shoulders, sorority-girl style. If the Germans are worried that the boss will explode, there's no need. When the slides are done, she asks everyone else's opinion around the room. The managers blame the slowdown on the maturing of the German auction market and on Germany's unusually hot summer (nice weather equals less time in front of computer screens the world over). She nods, then tells them that eBay isn't alone, that other high-powered CEOs with whom she schmoozed at a conference the previous week had told of weakness in their German businesses. She suggests that perhaps additional marketing spending will help boost activity. And she reassures the roomful of Gen Xers that whatever their problems, no one should panic. There are all sorts of solutions at their disposal.

"Our destiny is completely in our hands," she says, jabbing the air with her pen for emphasis. "There are lots of dials we can turn. I mean, look at the U.S., where we've just had five quarters of accelerating growth over a billion-dollar base. They said that it couldn't be done."

The group is relieved, but they'd better not have missed the challenge. Whitman has built a powerhouse in the U.S. and isn't going to let anything slow eBay down. In her five years as CEO the company has blossomed into one of the country's emerging engines of commerce. Not just e-commerce, mind you. Commerce. Its 28 million active users conducted nearly $15 billion of transactions via the site in 2002 and are on track to top $20 billion this year. That works out to more than $700 in deals whizzing over eBay every second. eBay's revenues--derived from listing fees and cuts on every item sold--will surpass $2 billion in 2003, with earnings topping $400 million. In spite of the dot-com crash, eBay's share price has grown 33-fold since its 1998 IPO, to $100. The company is now worth $32 billion, more than McDonald's or Boeing.

As eBay has rocketed (it ranks No. 8 in FORTUNE's 100 Fastest-Growing Companies list), so have the reputation, stature, and influence of its soft-spoken CEO. Yet get Whitman talking and she delivers a message that often comes off as counterintuitive. Her explanation for her success is almost always some version of the mantra she tosses out in meetings with managers from Berlin to San Jose, eBay's headquarters: "This company truly is built by the community of users." It's a little like Frank Perdue crediting his chickens.

Deflecting the spotlight is born of humility, though not just the personal kind. It comes from an awareness of something that slightly spooks--and humbles--eBay's management from Whitman down: the suspicion that eBay runs itself. The company's formula is so incredibly simple (provide a worldwide market and collect a tax on transactions as they occur), and its growth is so organic (buyers go where the sellers are, who in turn go where the buyers are ...), that a saying has become part of eBay lingo: "A monkey could drive this train." Maynard Webb, eBay's chief operating officer and the technology guru who saved the website when a traffic overload threatened to collapse it in 1999, summarizes the resulting ethos: "Most of us say, 'Man, we've got something special. Don't screw it up.'" Founder Pierre Omidyar, 36, who as chairman has no day-to-day role, thinks of eBay not as a traditional company but as what physicists call a "complex adaptive system," like the financial markets or the weather. Translation: It's pretty much unstoppable.

Making that kind of claim is easy for a founder-philosopher like Omidyar, but Meg Whitman has a business to run. In September 2000, she set a revenue target of $3 billion a year by 2005, which eBay should achieve easily. Since then she has stopped making bold public predictions.

Instead Whitman talks about building a global enterprise in which vast amounts of merchandise change hands and cross borders continually. How vast? Whitman has started to benchmark the company's gross merchandise sales against the giants of retailing. Right now eBay would rank in the 20s--still puny compared with Wal-Mart or, say, Sears--and she won't reveal where she wants it to be.

"There is no industry in which we compete, really," she says. "There is no online marketplace industry. We are pioneers." And like all pioneers, Whitman is figuring out how to run this business as she goes.

Another saying around eBay's headquarters is, If it moves, measure it. Whitman personally monitors a host of barometers. There are the standard ones for Internet companies: how many people are visiting the site, how many of those then register to become users, how long each user remains per visit, how long pages take to load, and on and on. Whitman also closely eyes eBay's "take rate," the ratio of revenues to the value of goods traded on the site (the higher the better). She measures which days are busiest, the better to determine when to offer free listings in order to stimulate the supply of auction items. (Mondays in June are slow; Fridays in November rock.) She even monitors the "noise" on eBay's discussion boards, online forums where users discuss, among other things, their opinion of eBay's management. (Level 1 means "silent," and 10 means "hot" or, in Webb's words, "the community is ready to kill you." Normal for eBay is about 3.)

In other words, eBay is a fire hose of business data. And no group of professionals loves being soaked in data more than management consultants. Whitman is a consultant to the core. She hopscotched from Harvard Business School through six corporate and consulting jobs--including a nine-year sprint to partner at strategy-consulting firm Bain & Co.--before alighting at eBay.

When she joined the company in 1998, it was a collection of geeks handpicked by the ponytailed Omidyar. He recruited her to give the startup some blue-chip cred. It didn't take Whitman long to transform the place in her image. She has peopled many of eBay's senior management posts with ex-consultants. Jeff Jordan, who runs eBay's U.S. business and is widely considered Whitman's heir apparent, worked at Boston Consulting Group. Matt Bannick, who ran eBay's international operations before Whitman tapped him last year to take over PayPal, worked for McKinsey. So did Gary Briggs, the vice president of consumer marketing.

Understanding management-consultant culture is key to understanding Whitman's style. Get your arms around the data, the thinking goes, and you can decide where to spend money, where more people are needed, and which projects aren't working. "If you can't measure it, you can't control it," she says. "Being metrics-driven is an important part of scaling to be a very large company. In the early days you could feel it, you could touch it. Now that's more difficult, so it has to be measured."

The people who do the measuring tackle their mission with intensity. Of eBay's nearly 5,000 employees, 2,400 are in customer support and 1,000 in technology. The most important group are what eBay calls category managers, a concept Whitman took from her P&G days. Instead of Tide and Crest, managers carve up eBay's 23 major categories (and 35,000 subcategories), such as collectibles; sports; jewelry and watches; and motors. They spend their days obsessively measuring, tweaking, and promoting their fiefdoms.

Category managers have only indirect control of their products, of course. They can't order more toothpaste onto store shelves. What they can do is endlessly try to eke out small wins in their categories--say, a slight jump in scrap-metal listings or new bidders for comic books. To get there, they use marketing and merchandising schemes such as enhancing the presentation of their users' products and giving them tools to buy and sell better. It's classic needle-moving. And because of that, say ex-eBayers, the place can be ultracompetitive. To gain attention for what can seem like simple steps, managers send around PowerPoint slides, most of which have been honed, re-honed, and then honed some more before being presented up the corporate ladder.

The result can be glacial change in a company built for speed. Lily Shen, a senior category manager for fashion--which accounted for about $900 million of transactions in 2002--noticed this spring that women's shoes were accounting for an increasing share of her traffic. Getting them their own category took two months: Every division--from technology to merchandising to marketing--had to sign off before the change could be made. When women's apparel wanted to add a way to narrow down shoe searches--say size 5 blue pumps for less than $50--the change took ten months.

To Whitman, the measurements and the delays are signs not of creeping bureaucracy but of a system that's developed rules and processes. The more stats, the more early warnings and the more levers to pull to make things work. Yet she's aware of the danger of analysis paralysis. "You have to be careful because you could measure too much," she says.

It's a fine line between observing and obsessing. Recently, to ensure eBay hasn't gone overboard on rules, Whitman brought in--surprise--even more consultants. The benchmarking firm measured eBay against peers to see how fast it adds features to the website. The result: eBay's performance was middle of the pack, at best. Says Whitman: "We have some work to do on time to market."

Speed defined Whitman's life early on. The youngest child of a Wall Street dad and stay-at-home mom, she raced through high school in suburban Long Island in three years. At Princeton, she majored in economics, then landed at Harvard Business School at the tender age of 21. Awed by the accomplishments of her older classmates and overwhelmed by the workload, she rarely left campus. "I was scared to death," she says. "On my left was someone who'd been at Chemical Bank for four years, and on my right was someone who'd been in the Army for nine years. They also tell you 10% of the class fails out. For the first year I did almost nothing but work."

That's probably the last time Whitman was intimidated. With her MBA in hand she went to Procter & Gamble and became a brand manager, working alongside future Microsoft CEO Steve Ballmer and Scott Cook, future founder of Intuit. After two years she and her new husband, neurosurgeon Griff Harsh, moved to San Francisco, where he had been offered a residency, and she went to work for Bain. Highly recruited while at the firm, Whitman left for a series of increasingly senior positions at Disney, Stride Rite, FTD, and Hasbro. When she finally joined eBay, she might have seemed an unlikely CEO of a 30-person technology startup. But Omidyar and eBay's early board were looking to build in big-company discipline and ideas.

It wouldn't be easy. eBay was pushing the limits of what was then called Internet speed, growing from 34 million auctions in 1998 to 265 million two years later. She moved fast to beef up Omidyar's gangly marketplace, opening a customer-service center for the thousands of newbies who were signing up daily, increasing fraud detection, and installing a new technology team, which was given carte blanche to remake eBay's infrastructure. Whitman knew that the eBay idea was powerful; she wanted to make sure it could thrive.

A hugely successful business model, though, has a way of masking errors. And there have been a handful of tactical and strategic missteps during Whitman's tenure. In 2002 she pulled eBay out of Japan, the world's second largest economy and Internet user, when it became clear that Yahoo Japan--then controlled by Japan's Softbank--had gotten there first and grabbed an insurmountable lead. She figured that eBay naturally would be a hit in the offline world and so spent $235 million of eBay's stock in 1999 buying traditional auction house Butterfield & Butterfield in San Francisco. The synergies were elusive; eBay quietly sold Butterfield in 2002 for what it calls an "immaterial gain."

Her costliest mistake also offered the biggest lessons about how much the eBay community determines the company's success. In 2001, eBay unveiled a checkout procedure for completing transactions. The initiative, spearheaded by U.S. chief Jordan worked well, allowing buyers and sellers to settle bills quickly. But instead of hailing it, the eBay community went crazy. The problem: The checkout procedure seemed to favor payment via Billpoint, eBay's payment-processing service. Frequent sellers had grown attached to PayPal, then an independent company, and were steamed that eBay was subverting their choice. "About one-third of the sellers hated it," says Jordan. "They puked on it. For me it was a lesson in humility and an object lesson that this is a joint venture."

The train kept on rolling, it seemed, whether eBay was working the levers or not. The company quickly made the checkout function optional, and in 2002 eBay bought PayPal for $1.5 billion, hundreds of millions more than it might have paid a year earlier.

"Our best decisions have been the ones where we've seen where the community was going," says PayPal chief Matt Bannick. "Some of our biggest mistakes occurred when we put on our consultant's hats and got in a room and made decisions."

Whitman describes such missteps as learning experiences, and doesn't dwell excessively on them; she preaches the art of moving on. "Most of the time we've made the right decisions, and when we haven't, we've fixed them," she says.

Besides, how can you obsess about mistakes when 10,000 of your customers are screaming your name: "Meg! Meg! Meg!"? It's late June, and Whitman is in Orlando addressing the crowd at eBay Live, the second annual real-world meeting of people used to communicating with one another strictly through bids and BuyItNows. The scene is a mix of kitschy Americana with serious business, somewhere between a carpet-hawker convention and Warren Buffett's annual meeting at Berkshire Hathaway.

Whitman strolls to center stage amid cheers, dressed in khakis and a bright blue eBay button-down shirt, just like every other employee at the conference. She smiles, giggles nervously, then quiets the crowd. Her message is humility: "We don't always get it right the first time, but we try our best to get it right. We succeed when you succeed." Later, as she walks the convention-hall floor, she chats with everyone from UPS CEO Mike Eskew--whose company is a partner of eBay's--to autograph-seeking sellers of antiques. She hands out and signs trading cards of herself and other eBay personalities like Omidyar. The cards are a classic eBay prop because they're collectible. They're also a way for Whitman to connect with ordinary people. "It creates a dialogue," she explains later. "Then I can say, 'What do you sell? Where are you from?'"

Whitman, 47, has as blue-blooded and blue-chipped a pedigree as any CEO, but she has perfected a common touch that comes in handy running eBay. Her unassuming way, including that nervous giggle, puts people at ease. As a small child, she took two summer-long camping trips with her mother, her mom's best friend, and seven other kids. The group set off from New York one summer to Alaska and the next to Yosemite, Grand Teton, Bryce, and other national parks, traveling in a Ford Econoline van and sleeping and showering each night in campgrounds. "You learn flexibility," says Whitman of the childhood experience. "I'm happy to camp. I'm happy to stay at the Four Seasons." Even today, eBay's CEO, who's a mom to two teenagers, drives an unglamorous Jeep Grand Cherokee. Her brain-surgeon husband, whose full name is Griffith Rutherford Harsh IV, does her one better: He drives a Buick.

Understatedness may be bred, but marketing is learned. At Procter & Gamble, Whitman kept a journal of the lessons she was learning as a brand manager. She still has the journal and consults it periodically. An early lesson she scribbled down way back when at P&G: "It's all about the customer."

At eBay, that's truer than at almost any other company. For all the monkeys driving trains and other gremlins pulling levers and turning dials, the customers are the ones who decide what works and what doesn't. New eBay board member Tom Tierney, an ex-CEO of Bain and Whitman's boss when she was a partner there, says he studied eBay intently before joining the board and was transfixed by the attitudes of eBay's customers. "It felt to me almost more like a movement than a business," he says. Adds Howard Schultz, founder of Starbucks and until recently an eBay director, "To Meg's credit, the focus has always been on the community. That's all Meg." Whitman knows everything that's going on in the community, in part because the community talks to her. Her e-mail address, meg@ebay.com, is constantly being posted to the discussion boards by eBay staff.

How much of this community bonding is done to keep eBayers from jumping ship to another site? Ask Whitman, and she freely points out that's impossible. "Here's the contrast," she says. "When I was at Hasbro, we asked, 'What is Mattel doing?' When I was at Disney, it was 'What's Warner Brothers doing?' Here there is no X to ask about."

Not that others haven't tried to steal eBay's market. When Whitman joined the company, Onsale was the upstart competitor. Yahoo and Amazon had both started auctions. At one point Microsoft and extinct Web portal Excite even built a consortium to challenge eBay. Now only Yahoo still has auctions; the rest have disappeared or abandoned the fight.

Today, niche competitors remain: Amazon does a brisk business in used books, Yahoo has captured auctions in Japan, AutoTrader has stood its ground against eBay Motors in used cars, and Ticketmaster dominates the buying and selling of seats for sporting events and concerts. Google's paid search service is also winning fans among small-business vendors who would rather sell now than wait for an auction to end.

Analysts raise other potential factors that could stunt eBay. Newer markets, like scrap metal, don't necessarily lend themselves to the same fervor that eBay users once brought to Beanie Babies. And with most--if not all--collectors fully aware of eBay, the company will have to spend more and more to attract new users, its primary engine of growth.

Whitman says she's confident about growth. She and her team are constantly on the lookout for competitive threats, especially in international markets, a 31%-and-growing share of eBay's revenues. Says Bob Kagle, the venture capitalist who made the sole outside investment in eBay and helped recruit Whitman to the company: "She has seen others break their pick on her, and she doesn't want to break her pick on anyone else."

As the many MBAs and ex-consultants beneath her focus on what to cram onto eBay, how to keep users happy, and what competitive threats to worry about, Whitman finds herself increasingly thinking about what the company will look like in the years hence. That includes considering for the first time what kind of CEO she wants to be remembered as and the legacy she'll leave when she pushes off. She changes her answer from time to time on when that'll be, sometimes saying she intends to stay at eBay for a total of eight to ten years--stretching her tenure to 2007 at the latest--other times saying she's committed to no timetable.

After a grueling week in Europe, she shows up for the long flight back to San Jose aboard eBay's corporate jet in a white turtleneck and torn blue jeans. She says she sees herself as a "Level 5 manager," a reference to management guru Jim Collins's depiction of a humble, uncharismatic type who's fiercely determined and gives lots of credit to subordinates. And she's considering importing a longstanding practice at her alma mater, P&G, which basically hires only recent college graduates and new MBAs. "Senior managers almost need to come in in an understudy role," she says. "We will bring them in in a way that they can get some level of acclimatization."

Her goal: to develop leaders capable of maximizing growth in eBay's weird, nearly competition-free world--leaders who can stand the fact that there's only so much any eBay boss can, or should, do. "Why have we gotten such great public relations?" she asks rhetorically. "Why does 'Weird Al' Yancovic write a song about eBay?" Her answer: "It's not because of the management." True. But it's not entirely because of some monkey driving some train either.

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