Correction:

An earlier version of this article incorrectly described Herb and Marion Sandler’s funding of the news organization ProPublica.The Sandlers committed to spend up to $10 million a year on ProPublica for its first three years, 2007 through 2009. They have not, as first reported, spent $10 million a year on it since 2007. This version has been corrected.

Ebay founder’s next venture: funding watchdog journalism

Pierre Omidyar became impossibly wealthy creating an online auction site, but his passion in the years since has had little to do with bids and sales. The thrust of his ample philanthropy has been keeping governments accountable and accessible.

The founder of eBay, who has given away a substantial portion of his $8.5 billion fortune to watchdog groups, confirmed Wednesday the outlines of a new, for-profit venture with a similar intent: a general-news site whose chief aim is to pry open official secrets.

(AP/Bennet Group) - Pierre Omidyar, the founder and chairman of eBay .

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The news caused a stir among media watchers and accountability organizations, not only because of Omidyar’s deep pockets but also because of his chief partner in the as-yet unnamed operation. He is Glenn Greenwald, the lawyer-journalist whose revelations about the National Security Agency’s massive electronic surveillance program have shaken governments around the world since Britain’s Guardian newspaper began publishing them in May.

Since Omidyar, 46, left daily management of eBay in 1998 (he remains its chairman), he has supported a string of organizations that seek to make government records accessible and monitor the influence of money in politics. Among them are two Washington-based nonprofit groups: the Center for Public Integrity, a nonpartisan investigative journalism outfit, and the Sunlight Foundation, a seven-year-old organization that seeks “real-time, online transparency for all government information.” A third D.C.-based nonprofit organization, the Democracy Fund, channels Omidyar’s money to a variety of like-minded groups.

He has also backed independent, for-profit journalism companies before, including Backfence, a defunct start-up that covered communities in the Washington area, and Hono­lulu Civil Beat, a three-year-old site that focuses on government in Hawaii, where Omidyar and his wife, Pamela, live.

In funding the news start-up, Omidyar, who spent some of his formative years in the Washington area, became the latest billionaire to pour money into the financially troubled media business.

Boston hedge-fund tycoon John Henry bought the Boston Globe in August for $70 million, followed three days later by Amazon founder Jeffrey P. Bezos’s purchase of The Washington Post for $250 million. Warren Buffett, one of the world’s richest men, bought 63 daily and weekly newspapers from Media General of Richmond last year.

Billionaire bankers Herb and Marion Sandler, meanwhile, committed to spend up to $10 million a year in 2007, 2008 and 2009 into sustaining the nonprofit investigative-news consortium ProPublica.

With Greenwald, Omidyar (pronounced oh-MID-ee-ar) appears to be merging both his philanthropic instincts and a business interest in journalism into a highly ambitious operation.

Omidyar said he is prepared to invest as much as $250 million in the venture — the amount he considered spending to buy The Post when he was offered the paper this year, according to the PressThink blog, which snagged the only interview Omidyar gave Wednesday.

“That process got me thinking about what kind of social impact could be created if a similar investment was made in something entirely new, built from the ground up,” he said Wednesday in a statement. “Something that I would be personally and directly involved in outside of my other efforts as a philanthropist.

“I developed an interest in supporting independent journalists in a way that leverages their work to the greatest extent possible, all in support of the public interest. And, I want to find ways to convert mainstream readers into engaged citizens. I think there’s more that can be done in this space, and I’m eager to explore the possibilities.”

Those who have worked with Omidyar describe him as a modest and self-effacing man with a quiet but determined interest in his chosen causes. At the inception of Hono­lulu Civil Beat, for example, he would arrive most days in jeans, flip-flops and a casual shirt, and would take on ordinary tasks, such as developing the news site’s content-management system and technical infrastructure.

They also say he is studiously nonpartisan.

“I don’t know where his politics are,” said Ellen Miller, co-founder and executive director of the Sunlight Foundation. “You have to guess. I’m not sure he’s political in the sense that we think of that term in Washington. I think he just believes that transparency is the way to ensure fair, free and democratic government.”

The partnership with Greenwald was “a natural” because of Omidyar’s concerns about the extent of the government’s surveillance programs, said John Temple, whom Omidyar hired as the first editor of Hono­lulu Civil Beat in 2009.

“He believes that the actions of the NSA should be of great concern to American citizens because of the constitutional violations of their liberty,” said Temple, a former Washington Post managing editor. “I don’t know if that’s liberal or conservative. I know he thinks these issues are important.”

Greenwald had been planning his own independent site with documentary filmmaker Laura Poitras and Nation magazine journalist Jeremy Scahill before Omidyar approached them last month about a co-venture. The three journalists will work on the site together; Greenwald said in an e-mail that he would decline to comment further until the news operation is ready to launch. He did not say when that would be.

Omidyar was born in France, the only child of parents of Iranian heritage. His family moved to the United States when he was a young child, settling in the Washington area while his father, a urologist and surgeon, was a resident of Johns Hopkins University Hospital in Baltimore. He attended two private schools, Potomac School in McLean and St. Andrews Episcopal School in Potomac, from which he graduated in 1984.

His mother, Elahe, an accomplished linguist and Persian studies specialist, taught at Georgetown and at the University of California at Berkeley. She separated from Omidyar’s father when the child was a young boy. Omidyar has said in interviews that he moved frequently, never spending more than two or three years in one place until he attended Tufts University in Massachusetts.

As a teen, Omidyar took a strong interest in electronic devices, including the first home computers. Using a school computer, he created software to help schedule classes in 10th and 11th grades. He also created a program that formatted library-catalogue cards.

After graduating from Tufts with an engineering degree, Omidyar held a series of jobs in Silicon Valley (a buyout of one of his employers made him a millionaire at the age of 29). It’s one of the tech industry’s great myths that Omidyar started eBay to help his then-girlfriend (now his wife) sell her collection of Pez candy dispensers online. In fact, Omidyar sought to create an auction function — he called it AuctionWeb — as part of a site he created for his consulting work, known as Echo Bay Technology Group.

When the name conflicted with another company, Omidyar shortened it. EBay was launched in 1995.

The site quickly became the go-to place for anyone looking to buy or sell all manner of items. “We didn’t do moderately wealthy,” he told Forbes magazine in 2000. “We went straight to ridiculous.” Last year, eBay racked up $14 billion in sales and $2.6 billion in profit.

Billionaires such as Omidyar have been attracted to the news business as prices for established media properties have fallen dramatically, and the cost of starting operations on the Internet are lower than ever, said Rick Edmonds, a media-business specialist for the Poynter Institute, a journalism school.

But making money isn’t always the motive. Although Bezos “brings tech savvy and a formula for expansion and rapid iterations of new products” to The Post, Omidyar appears principally concerned with civil discourse and “the vitality of democracy and journalism as a means to that end,” he said.

News-industry consultant Ken Doctor says super-wealthy individuals such as Bezos and Buffett are trying to apply their business acumen to a task others have found impossible to achieve: turning around ailing newspaper companies.

He said investors such as Omidyar are also motivated, in part, by “civic responsibility.” They have “some understanding [that] newspapers are diminished, but still have a vital, civic role, beyond their operations as businesses. This is where a sense of civics, maybe even altruism, kicks in.”

There might also be a bit of prestige left in the news business, too.

Edmonds said: “I used to say that for a billionaire, owning a newspaper was like owning a sports franchise, a high-profile involvement in community and a lot more fun than a bond.” Now, people like Henry, a savvy financier and investor “do both.”

 
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