Across major news outlets came reports today confirming that eBay CEO Meg Whitman will be stepping down. There is little satisfaction in saying ‘I told you so,’ or the like, but we called for a management change at eBay earlier this month and stand by the reasons cited in that posting along with the comments made by others in the blogosphere calling for her to step down. She is expected to depart the top job at eBay within weeks, though the timing “remains fluid.”
eBay shares closed today (1/22/08) at $27.23, down $1.10 or a loss of almost 4%. The stock has been on a prolonged and precipitous slide since its peak of $58 in late 2004.
The conventional thinking is that Whitman will be replaced by John Donahoe, the president of the company’s auctions business unit. This appears to be the safe move but it is unclear whether the more vocal investors will be all that ready to don T-shirt and cap and get behind Donahoe’s heir apparent status. Sentiment seems strong that vigorous, drastic measures are required at eBay now, and that may include bringing in fresh outside talent to reinvigorate the company and mollify the increasingly influential “powerseller” community that drives the eBay marketplaces. Donahoe, like Whitman, comes from the world of management consulting having risen to a senior position at Bain & Company. There are already rumblings that Donahoe is not the guy to lead the charge.
What will be interesting to watch in the coming weeks will be how this selection process is run and what investor response will be if Donahoe is indeed brought into the corner office. Om Malik and others have made the case–rather persuasively, I should add–that his short two-year tenure at eBay has earned him a “B” at best; not exactly the messianic performance one would expect from someone who will be under a lot of pressure to resuscitate a once-great web brand that has drifted of late. My sense is that a bolder choice of CEO is required if eBay has any hope of regaining its lost luster with investors and its standing in the marketplace.