Information Week reported today that Meg Whitman could be stepping down as soon as tomorrow when eBay releases financial results.
eBay is scheduled to release financial results tomorrow, Wednesday, January 22nd. Wall street is buzzing that Meg Whitman will announce her retirement at the same time. The Wall Street Journal reported that her successor will be John Donahoe, who is currently President of eBay Marketplaces (Bill Cobb’s boss). Donahoe was formerly with Bain, the private equity firm owned by Presidential candidate, Mitt Romney. He left Bain in 2005 to join eBay.
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.
The other interesting thing to watch is if Donahoe will sell off parts of eBay to re-focus on eBay’s core business. eBay Pro Stores would be one candidate. Yahoo would snap them up in a minute. Skype could be another candidate. It could not be sold for anything near what eBay paid for it, but eBay has already taken the write-down, so they can bank anything they get for it. So many voip companies are struggling that a merger between two of them could solve the competition problems that have fractured the marketplace. The problem is the other Voip companies don’t have the cash and with business credit so tight it could be a difficult deal to place.
The other shoe to drop this week is the eBay fee change announcement which promises to be the largest overhaul in eBay fees in several years. Rumors are flying that listing fees will drop, gallery fees could disappear and final value fees could increase.
Wall Street has long been critical of Meg’s leadership. Normally an announcement like this would boost the stock price which has fallen from $57 to $27-$28 range. But that will depend on the earnings that eBay reports tomorrow. If they are in line with expectations, the stock should go up. Of course this could be difficult in the current market environment. eBay stock dropped 4.27% today to $27.12 just before the close of the market.
In my last two newsletters, I wrote about the effect of the slowing economy on eBay sellers. Whenever the economy slows down, more people turn to eBay as a source of additional income. I am already seeing this as two of my popular books, Three Weeks to eBay Profits and The Complete Idiots Guide to eBay have seen such an increase in sales over the past few months that they are both sold out. Both will be reprinted soon. The Complete Idiots Guide to eBay is now number 2 on the Idiots Guide title list.