For newly appointed eBay CEO Devin Wenig, lobster rolls will never be the same.

It was 2011, and Wenig had just left Thomson Reuters after spending 18 years at the business news giant. EBay’s CEO at the time, John Donahoe, had heard of Wenig’s departure and immediately asked meet at his home in Cape Cod. Wenig, who only had known Donahoe superficially, thought he was crazy. But eBay’s leader was convincing, and Wenig agreed to take the short flight from New York later in the week.

Sitting at a small table at seafood shack in Hyannis, eating succulent fresh lobster sandwiches and hearing the Atlantic’s waves splash against the dock, Wenig listened to Donahoe’s pitch: join eBay to head up its giant marketplaces business and potentially become the company’s CEO in the coming years.

Flash forward to today. Monday will mark Wenig’s first official business day as CEO of a now PayPal-less eBay, beginning a new, challenging chapter for the 20 year-old flea market turned shopping mall. After accepting Donahoe’s offer four years ago and learning the ropes as a sort of understudy to Donahoe, Wenig is now his own boss.

Under pressure from activist investor Carl Icahn, eBay decided last fall to spin-off PayPal, the digital payments company it acquired more than a decade ago. It marks a huge shift for the two businesses, once among the shrewdest combinations in Silicon Valley history. EBay, as an adolescent, needed an easy, reliable way for shoppers to pay for their purchases on its site. PayPal provided that — and much more — by blossoming into a sort of gold standard for online payments across the Web.


But over time, the two sister divisions no longer depended on each other as much, Donahoe said in announcing the split. In fact, he said they would do better alone because top executives would be free to focus on their individual businesses. Of course, payments had long been eBay’s fastest growing meal ticket. In contrast, the marketplace, an online emporium of Tiffany lamps, LEGO sets and yoga pants, has been sputtering for some time.

Tomorrow PayPal will start trading on the NASDAQ as an independent company under the ticker “PYPL” while eBay will continue as its own separate public company. PayPal is expected to be valued at around $44 billion, potentially eclipsing the estimated $35 billion for eBay’s marketplace after the split.

As eBay prepares for its next chapter, the company will have to show investors that without PayPal, its core marketplace business is still thriving by providing value for both buyers and sellers.

“The real question is whether eBay can execute on a McDonalds-like turnaround plan,” said Sucharita Mulpuru, analyst at Forrester Research, citing another well-known company in need of a revival.

The Challenges

While PayPal can celebrate its success and now independence, the journey ahead for eBay, and Wenig as its new steward, will likely be tougher.

In second quarter earnings last week, eBay’s total revenue for the quarter was down 3% to $2.1 billion (revenue actually was up 5% in the quarter excluding unfavorable currency fluctuations). The silver lining to the earnings report was that eBay marketplaces active buyers grew 6%.

Donahoe, in an interview, acknowledges the challenge ahead for Wenig as CEO. “The eBay marketplaces business is a deliciously complex business to run. While it has wonderful purpose and soul, running a two sided marketplace is hard, and it’s a global business.”

In a series of interviews with Fortune, Wenig acknowledges the work that needs to be done, but he is optimistic. “There was a robust eBay before PayPal, and there will be a robust eBay after PayPal,” he said.

Venture capitalist and Netscape founder Marc Andreessen, who served on the eBay board for six years but resigned ahead of the split, is confident in eBay’s as a standalone business. “Startups are over glorified in Silicon Valley. EBay has all the problems that startups wish they had — billions of dollars in revenue, real growth, and being a public company,” he said. With $9 billion in revenue in 2015, eBay’s marketplace business would, in fact, make it a Fortune 500 company.

To begin, Wenig is going to continue with the strategy and changes he implemented when he first joined the marketplace, including bi-weekly meetings during which project leaders give updates about their new products, weekly design and strategy meetings, and more emphasis on ownership by product managers and engineers.

“When I joined eBay, there was no real clarity of accountability, and no one was clear about what they were doing,” he explained. “You would get into meetings with over 100 people and no one would know what they were responsible for.”

Within three months after joining, Wenig revamped the eBay logo. He began experimenting with creating a service to deliver products to customers’ doorsteps within a few hours, connecting customers with local service like handymen, and launching the ability for users to curate collections of items they sell on the site.

Some of these experiments have stumbled. eBay launched and then phased out its local delivery service eBay Now, for example. Although tested, eBay’s local services marketplaces never graduated into a full fledged product.

As for delivery, Wenig said he didn’t want to compete in something that was filled with competitors as local delivery evolved. It turned out to be a commodity that competed with services like Amazon’s budding same-day delivery service and Google Shopping Express. Eventually, he adds, eBay may partner with others to relaunch the service (the company is reportedly testing a new free delivery, subscription service in Germany).

Like many Fortune 500 companies in this era of cybersecurity, eBay succumbed to a massive data breach in 2014. It is still reeling from the effects of a this attack, which forced the company’s then 145 million users to change their passwords.

Then last year, a new Google algorithm crippled eBay’s listings in search results, pushing eBay listings to the second or third page. Although a seemingly small change, it made its customers’ listings all be invisible and led to depressed sales.

Wenig’s tenure as marketplaces chief has also seen its bright spots. When he joined, the e-commerce site had 99 million active users. He’s helped increase that number to nearly 160 million thanks in part to the growth of what Wenig calls “m-commerce” — or shopping on mobile devices — and to marketing deals with phone carriers to add eBay’s mobile app on phones.

In 2014, sales through mobile reached $28 billion, representing 34% of total volume. Already for the first half of this year, mobile volume was near $16 billion, or about 40% of overall sales, and is on pace to far exceed last year’s total. Wenig is betting that mobile’s share is going to increase, thanks to a recent iPad app redesign, and upcoming tweaks to other mobile apps.

The small growth in number of users this past quarter — 6% — points to both the promise and the reality of eBay’s future as a standalone company. eBay is not seeing nearly the kind of revenue growth and traction e-commerce giants like Amazon are bringing in.

Wenig acknowledges that Amazon is a formidable force in online and mobile commerce, but adds that eBay differentiates itself. “We don’t want to do and sell everything,” he said. “That’s not the winning hand.”

Former board member Andreessen added that “I think eBay is still a superior marketplace than Amazon. It’s still the only place go if you are an enthusiast about a particular category of goods.””

The Future

For the past decade eBay has tried to navigate the tension between its roots as a marketplace for small sellers while also appealing to big retailers like Target and Toys r Us to list their products. For now, Wenig is mostly focused on small businesses, and helping increase the number of sellers who offer more unique inventory — antiques, designer clothing and sports memorabilia — that is largely unavailable on rival Amazon.

Sellers can now pay eBay extra to list their items higher on the page and therefore get more exposure. It’s still a test, adds Wenig, but they are seeing strong interest from sellers, and eBay will continue to expand this area.

“The brilliance of eBay and the challenge is that this marketplace model has created the world’s biggest store,” explains Wenig. “But if you are not coming to eBay with a purpose, it can be very hard to shop.”

With that in mind, eBay is enlisting its legion of data scientists and engineers to create more ways to personalize the experience for shoppers by adding more suggested items based on their searches and giving them a better way to sift through listings. For example, when users search for an iPhone, eBay will clearly differentiate listings of new phones from used ones. Company executives have talked publicly about making the site more user friendly for years. But the pace has been glacial and many obvious fixes have yet to be implemented.

Additionally, eBay wants to expand the ability for sellers to manage their listings to better showcase their products and add to the number of products available in its home and garden, and fashion verticals, which continue to see traction.

To attract more shoppers and sellers, eBay continues to buy advertising on Facebook. “Rather than just use Google, we are trying to advertise on other platforms,” Wenig said. In particular, eBay is interested in targeting millennials, and has been actively testing promotions on social and messaging platforms like Instagram and Snapchat.

One area Wenig is particularly excited about is the Buy button, which allows users to buy items directly through non-commerce sites like Facebook, Twitter, Google and Pinterest. The company participated in a 2014 test allowing sellers to sell items via a version of Pinterest’s new Buy button and Wenig says the results were extremely positive. Out of all emerging channels, including Twitter’s Buy button, Pinterest is seeing the most traction, he said.

Bringing in new, engineering talent is also a huge focus for the company, as it rebuilds a team following a wave of layoffs (2,400 jobs, or nearly 7% of the company). EBay is company that opens its checkbook often to buy companies, and has done so dozens of times in the past decade. But not all of these acquisitions have found a natural home within eBay.

EBay bought e-commerce software developer Magento in 2011, and after layoffs last year, plans to sell the business as it unloads its enterprise division. EBay is selling its eBay Enterprise unit for $925 million, which is a fraction of the $2.4 billion eBay paid for it nearly four years ago.

But Wenig feels that the tough acquisitions also come with some of the good ones, such as RedLaser, an app that lets shoppers in retail stores scan barcodes to more easily compare prices elsewhere. eBay integrated RedLaser into its core mobile apps to allow for barcode scanning. “The really good ones pay off for the ones that don’t work,” he said.

Mulpuru has a different take. She says that when it came to acquiring companies, eBay had the right approach but that fell short in integrating the technologies. Typically eBay would hire a consulting firm like McKinsey to get the job done, she explains. “Bezos would never do that,” she said, referencing Amazon CEO Jeff Bezos.

Despite the rocky track record of acquisitions and integrations, Wenig says eBay will continue to buy companies for two primary reasons: geographic expansion and talent. With regard to international expansion, eBay will acquire companies that enable them to enter markets faster, and will also those in which it already has an equity stake. For example, last year eBay led an $133 million investment in Snapdeal, an Indian e-commerce marketplace.

Wenig adds that Southeast Asia, India and Latin America, are particular areas that are growing for eBay.

Andreessen sees the new beginning as an opportunity for Wenig and his new board to restart their acquisition strategy and anticipates the company will acquire more companies as it starts its journey of independence.

But many analysts, including Mulpuru, believe the tables will be turned on eBay and that the company will, as an independent company, become an acquisition target. Google and Amazon are considered as possible buyers as is Chinese e-commerce juggernaut Alibaba. “I never say never about anything, but there is no focus on selling the company right now,” said Wenig. Donahoe echoes these non committal thoughts, saying, “No one knows, but eBay’s market cap will probably be around $35 billion, and that’s a sizable acquisition for any of the large tech companies.”

The last, and more awkward, area of question for eBay’s future is payments. PayPal has long been the payments technology most sellers use to sell their wares on eBay.

To address fears that eBay and PayPal would start competing with each other after the split, the companies signed a detailed agreement of cooperation. EBay promised that 80% of the sales on the marketplace would be through PayPal for the next five years. EBay can bring on additional payment providers if it chooses. However, it is prohibited from building its own payments service. Meanwhile, PayPal agreed that it wouldn’t create its own eBay-like marketplace.

“I don’t wake up worrying about payments,” says Wenig. “We will see how the relationship with PayPal will evolve.”

He adds: “There will be clarity and simplicity that happens with the spinoff. At eBay we all worked to invest in and create PayPal, and eBay did a lot of things to help PayPal.”

Sitting in one of Wenig’s product meetings less than 48 hours before the two companies separate, the mood around the room is anything but fearful of the future. There are fist bumps among the staff, laughter, and jokes by RJ Pittman, eBay’s chief product officer, who used to run e-commerce for Apple.

EBay recently renovated much of its office space. Massive glass-walled meeting rooms that resemble giant fishbowls are scattered around its headquarters along with sleek desks, micro kitchens filled with food, and brightly colored lounge chairs and sofas.

eBay will not and can’t go away, Wenig explains emphatically. To hammer home the point, he tells a story of visiting a small guitar shop in New York City, which sells most of its inventory on eBay. When Wenig walked in the store a few months ago, the merchant enveloped him in a massive hug, taking Wenig by surprise. With tears in his eyes, the merchant explained that his sales from eBay had let him buy a home. That’s how important eBay is to its users, say Wenig.

Donahoe himself is staking his legacy in part on how Wenig can lead eBay into this new era. Donahoe believes firmly that it is still early days of e-commerce, and that here’s plenty of room for eBay to create a healthy, and profitable standalone business, he says. “The book about eBay is far from being written,” Donohoe concluded.

In some ways, Wenig is the perfect leader to carry out the mission, says Andreessen. Wenig, he says, is very similar to Donahoe in his leadership style. But what makes Wenig unique is his lack or arrogance and willingness to roll up his sleeves, and engage in the details, Andreessen insists.

As for Wenig, he says that he’s trying “to prove you can build a great enduring Internet company, that lives past its founder” before adding, “The next chapter at eBay is going to be about courage.”

Clarification, July 20, 2015: An earlier version of this article quoted Devin Wenig saying that eBay has started allowing sellers to sell items via Pinterest’s new Buy button. He misspoke; eBay participated in a test of the functionality with Pinterest in Nov. 2014 but is not currently a partner of the program. eBay is currently working on integrating the Pinterest buyable pins program.