Whitman expected to retire from EBay
EBay Inc. Chief Executive Meg Whitman is expected to announce her retirement as early as today and hand the reins to the successor she has groomed to reinvigorate the Internet company as it wrestles with a slowdown in its auction business.
John Donahoe, the 47-year-old president of EBay’s Marketplaces group, is the leading contender to succeed Whitman, according to people familiar with the matter. He has been widely viewed as the CEO-in-waiting since Whitman recruited him from management firm Bain & Co. in 2005 to run the group, which includes auctions.
The San Jose company, which declined to comment on speculation about Whitman’s departure, could announce her retirement and the succession plan during its fourth-quarter earnings report today.
If so, it will mark the end of a remarkable chapter for Whitman, who is one of the Internet industry’s longest-tenured CEOs and ranks among the nation’s most powerful women executives. She joined EBay in 1998, shortly before the company’s blockbuster initial public offering, when the company had 30 employees and just over $47 million in annual revenue.
Today it employs 15,000 people, has 248 million global registered users and is expected to report at least $7.6 billion in 2007 revenue.
Pierre Omidyar founded EBay in 1995 as a virtual flea market where people could sell collectibles such as Beanie Babies to the highest bidder. Under Whitman, EBay flourished as one of the Web’s top destinations, where people from far-flung places went to easily and efficiently buy and sell all kinds of merchandise via the Internet.
“Meg did a stellar job in growing and leading EBay, no matter how you measure it,” said Ellen Siminoff, CEO of search engine marketing firm Efficient Frontier and a founding executive of Yahoo Inc.
Whitman, who would be leaving on her own terms, gets high marks for her leadership even as the company faces a crucial crossroads.
EBay has experienced slowing growth in its auction business amid rising competition from retailer Amazon.com Inc. and search giant Google Inc. Some analysts have also been sharply critical of the $2.6-billion purchase of online telephone service Skype, which led to a major write-down last year.
Although she later regretted the comment, Whitman telegraphed her retirement years ago by saying that no CEO should serve more than 10 years. Whitman, whose 10-year anniversary is in March, has in the last year delegated more daily responsibilities to work on the presidential campaign of Republican Mitt Romney, a former Massachusetts governor, intensifying rumors that she would soon step down. Romney, Whitman and Donahoe worked together at Bain.
The only time Whitman came close to leaving EBay was in 2005 when she interviewed to succeed Michael Eisner as CEO of Walt Disney Co.
Whitman’s retirement plans were first reported by the Wall Street Journal.
Though EBay remains highly profitable and has a near monopoly on online auctions, analysts have dinged it for not keeping up with fast-paced changes in online retail, including the growing trend of merchants decamping from the EBay marketplace to open up their own sites and draw traffic from Google.
They expect the company today to unveil a number of initiatives including further improvements to its search engine, volume discounts for sellers, category specific pricing and a drop in insertion fees.
Donahoe has become popular with EBay buyers and sellers for aggressively spearheading such efforts to jump-start auctions. A tall, energetic man with charisma to spare, Donahoe has made it his mission to improve the shopping experience on EBay.
Donahoe, who was Bain’s worldwide managing director before joining EBay, has brought a fresh perspective to old problems that analysts say EBay used to sweep under the rug. He has pushed for new ways of searching for items and improved the ranking system for user feedback.
“Whether that leads to wildly positive, tangible results remains to be seen,” Cantor Fitzgerald analyst Derek Brown said. “EBay needs to provide a buying and selling experience that stands up to the competition item by item.”
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CEO-in-waiting
John Donahoe is considered the heir apparent to retiring EBay Inc. Chief Executive Meg Whitman.
Current job: President, EBay Marketplaces
Joined EBay: February 2005
Responsibilities: Strategic and financial planning, marketing, operations, product development and business development
Previous job: Managing director, Bain & Co.
Education: Bachelor’s degree in economics, Dartmouth College; MBA, Stanford University
Source: EBay Inc.
