'Slasher Hill' tries his luck at the eBay of the sporting world

If everything had gone according to plan, by now Stephen Hill's biggest worry would be whether or not anyone was taking any notice of this Friday's stock tip from Investors Chronicle. As it is, the 42-year-old Mr Hill, who until 12 months ago was running the UK's best-known financial magazine, has other issues on his mind. Like whether British bookmakers will ever manage to convince the Government that Betfair, the online betting company he now heads, operates illegally.

Sitting in Betfair's swanky riverside offices, Mr Hill - or "Slasher Hill" as he was known at the Financial Times - barely pauses to play "what might have been" if either of his takeover bids for FT Business, which owns IC, or SMG's Glasgow newspapers arm had come off. He isn't the reminiscing type, it turns out. "In private equity [his friends at Permira were backing him] you have to kiss a lot of frogs. If it's not one thing, then another will come along," says the former Pearson executive. That "other thing" happened to be Betfair, a company Mr Hill hadn't even heard of five months ago. He isn't the betting type either, apparently.

Not that working for Betfair is much of a gamble. Despite being slammed by the bookies for "promoting an unlicensed free for all", betting exchanges seem to have weathered the worst of the storm surrounding their legality - in the UK at least - and look like they're here to stay. Mr Hill, for one, is unworried. He dismisses the bookies' logic that because Betfair's customers can both "place" and "lay" bets on the site, the company needs a bookmakers' licence. "It is a grey area but it's not an argument the Government has bought."

The Cambridge law graduate looks confounded at my suggestion that there could still be some doubt. "The business here is perfectly legal, so either Her Majesty and the Prime Minister..... [Betfair won a Queen's Award for Enterprise in June]," he trails off, before interjecting, "oh, you know, it's a legal business in this country."

Legality aside, I reckon it should be a crime to run something so complicated that attempting to place (or should that be lay?) a bet leaves me bewildered even on my fourth or fifth visit to betfair.com. Briefly letting his guard down, Mr Hill agrees that he, too, initially found the site "mind boggling", before proceeding to explain that if you find Betfair too confusing, you're probably not who it's aimed at. "It's for people who know what they're doing. Serious enthusiasts." Not your casual punter, then

In the simplest terms Betfair "is the eBay of the sporting world," says Mr Hill, who by eschewing a tie with his City boy blue-and-white striped shirt has made a sop towards the de rigeur dress-down policy of an internet start-up. Essentially, at least, the idea is very simple - "That you empower people to trade with each other, so they no longer have to trade with a middleman, a bookie in this instance, where they have to pay his prices." Traffic to the site, which flickered to life in the run-up to Derby week in 2000, has grown exponentially, just like the group's revenues. It was "matching" £50m a week back in April, although Mr Hill says those numbers are "well out of date" (without providing me with new ones - the figures just get misinterpreted, apparently).

Although 90 per cent of the company's business is from customers in the UK, Betfair does take bets from punters overseas, providing their governments permit it. Australia is the group's Holy Grail because if it can open an office there it will have a truly global betting business, open 24/7. The snag is, while the Aussies might like gambling - they are especially keen on the horses - the Australian gambling industry doesn't like Betfair. The country's totalisator operators, their version of our Tote, have been lobbying hard for the government to remove a loophole in the 2001 gaming act to stop Betfair taking bets from Australian citizens. The UK group has other ideas, however, and hopes to set up shop there before too long.

Headhunted in February, Mr Hill only picked up the reins as chief executive six weeks ago. His accession leaves the company's co-founders - the former professional gambler Andrew "Bertie" Black and the former JP Morgan banker Edward Wray - free to focus on developing other sides of the business. Mr Black, who designed the original concept "in a farmhouse in the back of beyond", will look at applying the technology to other media, while Mr Wray will oversee the group's international expansion.

Mr Hill, whose polished tones barely disguise oft-brusque replies, is no sentimentalist. Asked if he enjoys what is surely one of business's most emotional industries, he states: "I get caught up in running companies rather than the industries in which they're operating.... I don't think you want to be too obsessed by the industry. What you want to do is focus on what the customers want and how you're delivering against those objectives. That's what I find exciting. That's what I like to do."

Despite studying law, Mr Hill says he always wanted to go into business. Rather than drift into management consultancy like most graduates, he headed straight for Boston Consulting Group on leaving university. That was followed by a job at Guinness, now part of Diageo, where a stint as executive assistant to the chief executive and chairman must have given him the taste for running companies. At Pearson, the media group, he oversaw the creation of BSkyB as director of strategy before progressing to run a succession of the company's regional newspaper titles. He was appointed chief executive of the Financial Times Group in 1996, aged 35, which in his words "was quite young". That's where he earned the moniker "Slasher" for having "to make a lot of changes [aka job cuts] to the FT management".

Sounding genuinely animated, he say: "I always wanted to go into business, have always been fascinated by business and the whole process of management and getting people to work together and achieve something." So it strikes me as a little odd that he chooses to spend his spare waking hours pursuing such a single-minded solitary hobby as the triathlon (that's swimming, cycling and running to the uninitiated.)

"I have a coach and I take it quite seriously ... I have all the gear, I tell you," he says of his sporting passion, which takes up all his summer weekends. "It's an interesting sport to take up if you're a senior person because to fit in the training is quite tricky if you're running a reasonably large company. I always think I might write a book about how you can manage your time effectively in order to do the training and run a company at the same time," he muses. Maybe he could get Pearson to publish it.

STEPHEN HILL - A GOOD BET

Title: Chief executive

Age: 42

Salary: Not disclosed because Betfair is a private company.

Career history: Joined Boston Consulting Group on graduation. Worked for Guinness (now Diageo) as executive assistant to the chief executive and chairman, before joining Pearson, the media group. Held various positions, from strategic director, to chief executive of the Financial Times Group. Left last summer after failing in a management buyout attempt of the group's business magazine titles, such as Investors Chronicle.

Hobbies: Triathlons. He also likes travelling and his house in Putney, London has a little garden.