Ebay CEO to step down
Posted
Jan 22 2008, 03:22 PM
by
Kim Peterson
Rating:
EBay chief executive Meg Whitman will retire from the post soon, the WSJ reported today. And that means eBay is at the most critical point in its history. The retirement news isn't a surprise; we discussed the idea of her resignation earlier this month. Whitman, 51, has been giving her top executives more responsibilities recently and could be grooming one to replace her.
EBay investors weren't too thrilled today. The company's shares fell more than 4 percent to close at $27.13. I thought the market would react more favorably, considering that eBay's share price has dropped by almost a third since October.
Whitman's legacy has some black marks, such as the overpriced Skype acquisition and the increasing anger among a user base irritated by high fees. I don't think she's done enough to improve the user experience, and as a result companies like Amazon have become a serious competitive threat. But what outshines those flaws is this: Whitman has kept the company growing and profitable, which is exactly what a CEO should do.
The person eBay's board appoints as successor will say a lot about how the company views itself. The WSJ speculates that John Donahoe, the president of eBay's stagnating auction business unit, is in line to replace her. If Donahoe is promoted, eBay's board is probably looking for more of the same from the company's leadership -- and honestly there isn't much wrong with that.
But bringing in someone fresh would signal that eBay is ready for a change. Ready to abandon its cautious, conservative approach and become more than an auction site. Ebay has huge potential to expand into new areas, and those moves, while risky, could revitalize the company.
Ebay's quarterly results are out tomorrow. Perhaps we'll find out more about a Whitman resignation then.
Update: The news is out (click here for more detail). Whitman is leaving in March but will remain on the board. In a conference call today, she said, "It's time for eBay to have new leadership, a new perspective and a new vision." Donahoe will be the new CEO, and in the same call said he'll make eBay easier and safer to use.
Here's what others have to say about the news:
NYT Bits: "Ultimately, if Ms. Whitman’s strength was her conservative ability to give the eBay auction concept a chance to grow and achieve its potential, there may be a strong case for a need for change."
Digital Daily: "Certainly she leaves a storied career behind her. She led the company through its 1998 initial public offering, and from there through some 40 quarters of sequential revenue growth. An impressive achievement by any measure–Skype acquisition be damned."
Silicon Alley Insider: "We think the move will be good for eBay's stock price and, likely, good for eBay. Meg had a strong run, especially in the early years, but eBay has lost its strategic focus, and we think the company will benefit from having a new leader. "
Seeking Alpha: "Whitman has been an emblematic leader for eBay but I also think the time has come for a change in leadership. The earlier this change comes, the better."
BloggingStocks: "Ms. Whitman has done an admirable job as CEO of the company, as evidenced by the stock's strong performance since its IPO. But over the past five years, shares of eBay have provided essentially flat performance as the company struggles to find ways to deal with slowing growth in the auction business."
