Interest in Disney Job May Haunt EBay Chief
Meg Whitman’s week got off to a bad start.
The EBay Inc. chief executive, having withdrawn her name from consideration for the top job at Walt Disney Co., fired off an e-mail Sunday to the online auctioneer’s employees, saying, “I reaffirmed my belief that working at eBay is indeed the best job for me.”
On Monday, instead of congratulating her for her loyalty, investors punished her for flirting with Mickey Mouse. EBay shares fell $1.77, or 4.6%, to $36.48 on Nasdaq, and analysts questioned the onetime Disney executive’s allegiance to EBay.
“Meg, by doing all this, has opened up what for her will be a big Pandora’s box,” said David Garrity, an analyst with Caris & Co. “She’s going to wish she never took the call from that damn mouse.”
Analysts said the weekend disclosure of Whitman’s interest in the Disney CEO job, which on Sunday went to Disney President Robert Iger, came at an especially bad time for the world’s biggest online auctioneer. EBay’s stock has tumbled 38% from its December high, largely on concerns about the growth prospects of one of the Internet’s biggest success stories.
Wall Street has been jittery about San Jose-based EBay since its fourth-quarter profit and 2005 forecast fell short of projections -- the first quarterly earnings miss since the company went public in 1998. Garrity wondered whether Whitman’s interest in Disney, where she worked from 1989 to 1992, signaled that she knew something worrisome about the company’s prospects that she wasn’t telling investors.
With Whitman at the helm, EBay has turned into a global marketplace with sales of $3.27 billion last year and a market value of $49.1 billion, not far behind Disney’s market value of $57.4 billion.
She has signaled often that she plans to stick around for no longer than 10 years, and she has been CEO for seven. Whitman has bolstered the company’s top ranks, hiring Bain & Co. managing director John Donahoe as president of the EBay Business Unit last month and promoting three senior vice presidents in December.
“You string together those dots, and suddenly you come up with a picture where who’s to say who’s running that company,” said Scott Kessler, an analyst with Standard & Poor’s. “It’s just another question that people have -- reasonably -- about the company and its future.”
If anything, Whitman demonstrated her commitment to EBay, said company spokesman Henry Gomez. He said she had no interest in any other job and would “stay put at EBay for the foreseeable future, with emotion and gusto.”
As for the recent management changes, Gomez said, Whitman hasn’t started a formal transition. “What Meg is doing is what any good CEO would do: growing a number of strong internal leaders for the future,” he said.
Los Angeles headhunter Stephen Unger, who specializes in the media and entertainment fields, agreed: “What happened with Disney is yet another validation of her worth as an executive -- that Disney was taking her so seriously.”
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Times staff writer David Colker contributed to this report.
