House cleaning at eBay: Meg Whitman and Bill Cobb to pursue other interests
Online auction giant eBay announced today that CEO and President Meg Whitman will resign on March 31, 2008. EBay Market North America President Bill Cobb will follow suit at the end of the year.
Whitman will be replaced by John Donahoe, currently the President of eBay Marketplaces. Donahoe will be replaced by Rajiv Dutta, the President of PayPal.
Side note of some interest: Donahoe is an alum of Bain & Company, Republican presidential candidate Mitt Romney’s old company, and also a former employer of Whitman, who’s a member of Romney’s campaign.
Whitman’s downfall was presumably brought about by several failed acquisitions, the one of Skype being the most spectacular one, and weak earnings. On the business side of things, eBay has struggled with seller attrition and stagnating listings volume, mostly because of steadily increasing fees. The company has also had a difficult time nailing down its value proposition to buyers. In 2006 the mantra was to make shopping on eBay as similar to regular store-shopping as possible, but last year the company decided to instead emphasize the auction aspect of the eBay shopper experience.
I actually chatted with Whitman for a few seconds in 2006 when she was inspecting eBay Live 2006 the day before it opened. Nothing particularly interesting was said, but it’s still fun little memory. I can’t say I particularly liked the way she ran eBay but I definitely wish her the best of luck if she joins Romney’s campaign full time.
Blogger reactions
Michael Fowlkes at BloggingStocks:
eBay users over the past few years have definitely had a love/hate relationship with Whitman, and it will be interesting to see just how well liked her successor finds himself. From a users perspective, eBay users are going to be looking for one main thing… lower fees.
William J. Holstein at The Corner Office:
… however many times Whitman has been on the cover of Fortune, and no matter how lionized she was as a pathbreaking woman CEO, it appears she didn’t live up to her own hype.
Jim Hedger at metamend SEO blog:
Whitman leaves eBay far stronger than she found it. She is one of the smartest and most consistent C-level players in the industry and, whether eBay likes it or not, Meg Whitman will be missed.
Erick Schonfeld at TechCrunch:
During most of Whitman’s tenure, eBay seemed unstoppable. But the network effects that made it so powerful in the Web 1.0 era began to dissipate as destination sites began to lose some of their appeal. Now that people want to bring the Web to them—to their blog or MySpace or Facebook page—eBay needs to adapt to the new realities… During the last two years, eBay has lost about half its value. Not a great note to leave on.
eBay’s life blood is the 1.2 million entrepreneurs who make their primary or secondary income from selling on eBay. Entrepreneurs like the members of the Professional eBay Sellers Alliance make up a tremendous portion of eBay’s Gross Merchandise Volume.
But these entrepreneurs are trying to distinguish themselves in an increasingly complex multichannel e-commerce world. They need to … find their way into the hearts and minds of the millions posting on social network sites such as MySpace, YouTube and FaceBook.
Yi-Wyn Yen at Fortune Magazine’s Techland:
The auction powerhouse is under pressure to move quickly to make a major overhaul with growing competition from Amazon (AMZN). eBay will report its fourth-quarter earnings Wednesday, and Wall Street is expecting to hear how Donahoe’s new position and an anticipated drop in listings fees will jump start eBay’s auction business.
Susan Gunelius at Women On Business brings the sycophantic sisters-stand-united perspective:
Overall, Meg Whitman represents a great success story to inspire other women in business. Recently, she’s been spotted in the company of politicians and Presidential candidates creating speculation that she may leave the corporate world for a stint in the political world. That remains to be seen, but one thing seems certain - Meg Whitman will undoubtedly be successful in any endeavor she pursues in the future.
Donahoe is an intriguing choice. He was a very successful turnaround specialist at Bain. It will be interesting to see if he continues on Meg’s path of focusing on buyers to the detriment of sellers, or if he will respond to seller’s needs to stem the tide of sellers leaving eBay and falling listings.
As a former turnaround specialist, he may also act to trim jobs at eBay where employment is now at 15,000. I doubt if eBay could reduce many jobs without hurting customer service which is already a weak point. That will be interesting to watch. It will also be interesting to see if the Yahoo/eBay merger rumors continue or go away. eBay is denying all merger/buyout rumors.
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