eBay Chief Whitman to Retire
on 22 January 2008, 10:48
by Reuters News
eBay Chief Executive Meg Whitman, one of the most powerful women in business, is preparing to retire from the online auctioneer, The Wall Street Journal said on Tuesday.
A departure by the Silicon Valley veteran would come as one of the Internet's best-known companies tries to recapture the runaway growth that made it a household name connecting buyers and sellers through online auctions.
Whitman, 51, would also be following her own advice that no CEO should stay in the same job for more than a decade, a philosophy that reflects the unassuming character that made her popular among the sellers who use eBay's auction site.
John Donahoe, the 47-year-old president of eBay's auction business unit, is the leading candidate to succeed Whitman, the newspaper said, quoting unidentified sources.
The report said Ms. Whitman's departure could be announced within weeks, although it added that the situation "remains fluid." Ms. Whitman recently began delegating more daily responsibilities and is completing succession plans, it said.
eBay spokesman Hani Durzy declined to comment.
Shares of eBay fell 4 percent to $27.14 in morning trade on the Nasdaq amid a global stock market sell-off tied to fears the U.S. economy is sinking into recession. Analysts have said eBay's business could prove durable in a downturn, as consumers use its sites to hunt for bargains.
eBay had only a few dozen employees when Ms. Whitman joined as president and CEO in early 1998 following a job overseeing marketing for Hasbro toys like Mr. Potato Head. eBay's initial public offering came six months later.
"No CEO should stay more than a decade in the same job," Ms. Whitman said close to the time she joined the company, arguing that executives need fresh challenges and organizations need new perspectives.
Under her leadership, eBay has turned into one of the most-visited sites on the Internet.
But the company's growth has weakened in recent years. A slower core auction business, rising competition from online retailers, and missteps with the acquisition of online communications company Skype have cut its stock price by half from a peak of just over $56 in late 2004.
Last October eBay announced a $1.4 billion write-down of its investment in Skype.
Mr. Donahoe has been seen as a leading contender for CEO.
He joined eBay in March 2005 and now runs the marketplaces business, the biggest of three main segments that make up eBay. The other key businesses are PayPal online payments and Skype communications.
Ms. Whitman's successor is expected to face the difficult task of regaining shareholder confidence while satisfying the highly restive group of "powersellers" that drive the eBay auction community.
Some investors have called for drastic action to revive revenue growth in the auctions business.
When eBay reports fourth-quarter earnings on Wednesday, analysts expect the company to announce it is slashing the fees for listing items on eBay while raising the fees sellers pay for completed transactions.
Pricing changes could put additional pressure on the company's margins and revenue growth, even as consumer spending is likely to be lackluster, Deutsche Bank analyst Jeetil Patel wrote in a research note to investors on Tuesday.
Critics have also said the company should consider a mega-merger, perhaps with Yahoo or Microsoft, in a bid to fend off inroads from Internet search leader Google.
Ms. Whitman, a former management consultant who graduated from Princeton University, was known for a folksy style that made her a trusted voice among the auctioneer community.
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