eBay CEO Whitman eyes exit amid auction worries

eBay CEO Whitman eyes exit amid auction worries

Summary: eBay CEO Meg Whitman is reportedly pondering retirement as the online auction giant struggles with slowing growth. Makes you wonder about those fourth quarter results eh?

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eBay CEO Meg Whitman is reportedly pondering retirement as the online auction giant struggles with slowing growth. Makes you wonder about those fourth quarter results eh?

The Wall Street Journal reports that Whitman is seriously thinking about retirement after a decade at the helm. That's a lifetime among Internet companies. For instance, Yahoo has been through three CEOs in the last decade. John Donahoe, who leads eBay's auction unit, is the front runner to succeed Whitman.

What's Whitman's departure mean? Big changes are coming. A few hints of how big these changes are will come Wednesday when eBay reports its fourth quarter earnings. Analysts are expecting a profit of 41 cents a share in the December quarter with sales of $2.14 billion, according to Thomson Financial.

Going into the quarter, analysts expect eBay to cut its outlook for 2008 with a lot of management time spent on reviving listings growth. Listings growth in the U.S. is expected to be up roughly 3 percent in the U.S., according to Jeffries analyst Youssef Squali. However, Squali notes that eBay gets more than half of its revenue from overseas and a weak dollar can boost results. Overall, eBay is going to spend a lot of time talking about listing prices and potentially a major price adjustment.

eBay's has two critical issues. First, Amazon's third party partners are taking eBay market share. It's unclear what eBay can do to boost listings revenue (it doesn't have pricing power anymore). Most analysts expect eBay to cut insertion fees.

Merrill Lynch analyst Justin Post writes:

EBay management has indicated that the company is looking at restructuring its listing fees structure in order to improve seller sentiment and increase listings activity (and better compete with Amazon for high volume sellers, in our view). Industry sources and our calculations indicate that sellers currently pay approximately 50-60% of their eBay fees upfront in insertion, gallery, and other option fees and only 40% in final value fees on goods that actually sell. For many sellers, particularly larger professional sellers, the lack certainty on their marketing cost of sales (because they can’t predict conversion rates) limits how much they are willing to commit to the eBay marketplace.

Simply put, it's a good time for Whitman to hand off the reins--especially if impending changes at eBay will take a while to pay off.

Topics: Banking, Browser, E-Commerce, Enterprise Software

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6 comments
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  • eBay = eRipOff?

    Sorry but there are too many competitors that actualy care what happens to the buyers.
    No_Ax_to_Grind
  • RE: eBay CEO Whitman eyes exit amid auction worries

    GOOD RIDDANCE! This couldn't happen a moment too soon. I for one will not miss Meg Whitman, with the only problem being her hand groomed successor will be just as bad. Whitman ruined eBay taking it from a fun place, to a Wall Street money machine constantly pitted against it's sellers taking more and more of their profits, destroying the "Community" that it's founder started. Goodbye Meg, good riddance.
    WindowWasher
  • Another Opportunistic And Undeserving CEO...

    The seeds of eBay's problems were sown, long ago, when Meg decided to operate the company as BOTH a business and a liberal social engineering experiment, while failing to protect users from scammers and fraud. During this same period, Amazon was focused on creating a lean, secure, 100% business-focused platform for e-commerce, staffed by highly competent, razor sharp business professionals, not the touchy-feely business illiterates that choke eBay's ranks.

    Now that the pin-wearing chickens have come home to roost, it looks like Meg will open her golden parachute and like so many other opportunistic and undeserving CEOs before her, escape the fiery crash ahead. "Good" for her. It's unfortunate this personal "success" comes at the expense of so many hard working eBay sellers.
    John Westra
  • eBay? Who cares?

    Meh, I gave up on eBay a while back. They are a greedy company. I was thinking of listing one of my cars a while back but over $80 to eBay just to sell a car that I only want $3600 out of to cover the money I have into it? Then I'd have to raise my minimum price to $3700 and unsure if it will sell I may be out over $40 just for the privelege of listing it on eBay. Screw that. It's now listed on Craigslist. I will not be listing anything on eBay, just not worth the expense. I can do better on Craigslist.
    DigiTechDude
  • Slowing growth?

    Just how long can a company grow? Eventually there has to come a time when it can no longer grow. What happens then?
    voska1
  • Maybe it's not because of fees but because they broke their website??? ;-)

    Are you that ignorant??? Just look at these threads, they're right in front of your face!

    http://forums.ebay.com/db1/thread.jspa?threadID=2000408020&tstart=0&mod=1201099275162

    http://forums.ebay.com/db2/thread.jspa?threadID=2286011&tstart=0&mod=1201040194626

    http://forums.ebay.com/db2/thread.jspa?messageID=2008887013&forumID=87

    http://forums.ebay.com/db2/thread.jspa?messageID=1010685758&forumID=87

    The fact that the CEO is so ignorant is a large part of the issue here, people are not halting listing because of the prices. People are halting listing because eBay techs are screwing with a system that did work and replacing it with a system that does not work and appears to have never gotten any QA. It is clear that the people designing the "new and improved" ebay are people who never have sold or bought on ebay and this is a big issue. The current changes are scaring away longtime sellers and buyers and since the search is not really functional no seller is able to fully benefit from eBay. STOP MESSING WITH FEES AND FIX THE FREAKIN WEBSITE, THIS NEGATIVE FEEDBACK IS RIGHT IN FRONT OF YOU AND YOU DON'T EVEN BOTHER TO ACKNOWLEDGE IT! IF YOU KEEP MESSING WITH THE SITE YOU WILL ULTIMATELY KILL THE COMPANY!!!

    - John Musbach
    John Musbach