SAN FRANCISCO (Reuters) - EBay Inc <EBAY.O> 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.
By Eric Auchard
SAN FRANCISCO (Reuters) - EBay Inc <EBAY.O> 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.
EBay spokesman Hani Durzy declined comment.
The departure of 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.
!ADVERTISEMENT!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.
Wall Street analysts said Whitman's possible retirement would come as little surprise and the company faces a round of challenges that could benefit from new leadership. Views on Whitman's leadership in recent years were mixed.
"The buyside is sick of Meg," Tim Boyd of American Technology Research said of how some institutional investors' have wearied of waiting for turnaround measures to take hold. He advises investors buy the stock, which he says is worth $40 a share.
Shares of eBay fell as much as 7 percent in premarket trade amid a global stock market sell-off tied to fears that the U.S. economy is sinking into recession. The stock rebounded following a dramatic rate cut by the U.S. Federal Reserve. In afternoon trading on Nasdaq, the shares were down $1.04, or 3.7 percent, at $27.29.
But Martin Pyykkonen, an analyst with Global Crown Capital, said no groundswell of shareholder criticism has taken shape.
"Some investors think it's time for fresh blood and that eBay is going to be less of an auction company over time," Pyykkonen said. "Others think Whitman has done the best she can do with what she has." He rates eBay stock as "neutral."
Analysts have said eBay's business could prove durable in a downturn, as consumers use its sites to hunt for bargains.
The Journal report said Whitman's departure could be announced within weeks, although it added that the situation "remains fluid."
Whitman has been delegating more daily responsibilities and over the past year has taken an active role in the presidential campaign of Republican candidate Mitt Romney. Romney, Whitman and Donahoe all once worked at consulting firm Bain & Co.
AFTER A DECADE
EBay had only a few dozen employees when Whitman joined as president and CEO in early ë1998, following a job overseeing marketing for Hasbro Inc <HAS.N> 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," Whitman said shortly after joining eBay, arguing that, over time, executives need fresh challenges and organizations benefit from 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 took a $1.4 billion write-down of its investment in Skype.
EBay is facing defections by formerly loyal big sellers as online retailer Amazon.com Inc <AMZN.O> has made it easier for independent stores to set up shop on its site. Others now use Google Inc <GOOG.O> keyword ads to promote sales on their own sites.
Whitman's successor would face the difficult task of stoking shareholder confidence while satisfying the highly restive group of "power sellers" that drive the eBay auction community.
"It's not that eBay has screwed up, but there are a lot more e-commerce alternatives out there these days," Pyykkonen said. "Real power sellers are smart enough to look at the world and see they don't have to be on eBay only anymore."
Donahoe has been seen as a leading contender for CEO. Prior to joining eBay, he was the worldwide managing director of Bain, where he oversaw the consulting firm's 29 offices and 3,000 employees. Whitman was Donahoe's boss for a time at Bain, and she recruited him to eBay.
It appeared to sideline other internal candidates such as Bill Cobb, the head of eBay's North American business, when Donahoe joined the company to run the eBay marketplaces business in March 2005.
In an interview with Reuters last month, Donahoe was critical of eBay's failure to do more to keep buyers coming back to its auctions and fixed-price shopping sites.
He said that a year ago, the home page of eBay.com looked "very 1999," like a cluttered "garage sale." EBay has made more changes to improve the buyer experience in the past 12 months than in the prior five years, he told Reuters.
"We came to the determination that we haven't kept up," Donahoe said of how eBay had failed to stay ahead of the spread of online shopping alternatives. "We have opportunities to improve particularly our buying experience," he said.
(Additional reporting by Ritsuko Ando and Michele Gershberg in New York; Editing by Gerald E. McCormick and John Wallace)
