If Meg Whitman validates media reports that she is exiting the CEO post at eBay, she will depart with the glow of having finished a masterful job of transforming an obscure San Jose, Calif.-based auction site into an archetypal business model with yearly global sales of nearly US$6 billion.
On Tuesday, The Wall Street Journal reported Whitman was planning to leave the 12-year-old company within weeks, after 10 years at its helm.
“Think about what eBay was,” said Greg Sterling, principal analyst with Sterling Market Intelligence.
“It was like an online garage sale when it started,” he told the E-Commerce Times. “Now, it’s one of the true Internet powerhouses.”
Whitman, who previously was a marketing director for toy maker Hasbro, has been with eBay longer than most of its 15,000 employees. When she arrived early in 1998, eBay had fewer than three dozen full-time workers and sales of roughly $86 million.
Who Takes the Torch?
Whitman is grooming 47-year-old John Donahoe, president of eBay’s revenue-rich auction business division, to succeed her as CEO, The Journal said. Whitman brought Donahoe to eBay in 2005 from Bain & Co., where he was managing director of that firm’s worldwide network of offices.
Whether it’s Donahoe or someone else who takes over, a change makes sense, Roger Kay, principal analyst for Endpoint Technologies, told the E-Commerce Times.
“I think the transition should be smooth,” he said. “It sounds like they’ve already begun to line it up, and she has already given an indication she’s ready to do something else. She certainly deserves her million-plus payday.”
At the time she joined eBay, Whitman was quoted as saying a CEO shouldn’t stay in that job longer than a decade — a philosophy Kay applauded.
“Change is good for the leader and good for the company,” he said. “Generally, people get bored and stale. This allows others to move up in the organization, give the organization oxygen — and it provides an opportunity for another individual. You might like to do something different, and it could be anything. She deserves the opportunity to do anything she wants.”
What she wants is anybody’s guess, Kay said.
In all likelihood, Whitman will be back someday, Kay predicted.
“I wouldn’t be surprised if she did take some time off to sail the Caribbean,” he said, “but she’ll re-surface. It’s unlikely somebody that active will want to stay idle that long.”
The company’s meteoric ascent aside, eBay does face some economic challenges. After years of growth, competition from online and brick-and-mortar rivals has intensified. eBay purchased online communications firm Skype in 2004, a $2.6 billion investment for which it took a $1 billion write-down in October.
Shares of eBay have slid from more than $56 in 2004 to $27.44 Jan. 18 on the Nasdaq Stock Market. The stock had been trading at $40.73 as recently as Oct. 11.
The company is due to release its fourth-quarter earnings Jan. 23.
eBay’s troubles are hardly its own, Sterling observed.
“A lot of companies have suffered,” he said, referring to recent downward trends in the stock market. “There has been impact across the board, with a few exceptions.”
The big picture hasn’t changed for eBay, Sterling insisted.
“eBay is a phenomenal success story,” he said. “Now, they just have to figure out where to go in their next step. It’s happened to company after company: They rise with some product or service offerings. They mature and then they flatten, and they have to figure out what to do next.”
Were media reports of Whitman’s impending departure to prove true, it would be a positive move for everyone involved, Kay agreed.
“It might be time to reignite eBay,” he said. “It’s clearly one of the most successful companies on the Internet — obviously one of the few brands in online shopping. She’s been very successful, but regardless of any individual executive, companies need to reinvent themselves periodically. I think eBay is in a very strong position but needs to inject some new thinking.”