Changing of Guard Announced at eBay Overseas Auctions Help Profit Rise 53%

Jan 24, 09:26 AM

An era at eBay is about to end.

Meg Whitman, chief executive of eBay for the past 10 years, is retiring, the company announced Wednesday.

The company will replace Whitman with John Donahoe, 47, president of eBay's marketplaces division, which includes its large but stagnating online auction business.

The transition will happen March 31, the company said. Whitman said she would remain on the board of directors.

EBay also reported fourth-quarter profit and revenue that exceeded analysts' estimates, spurred by overseas auctions and PayPal online payments, Bloomberg reported.

Net income in the quarter through December advanced 53 percent to $530.9 million from $346.5 million a year earlier. Revenue climbed 27 percent to $2.18 billion, eBay said.

But eBay projected 2008 profit of $1.63 to $1.67 a share, compared with the average estimate of $1.67 in a Bloomberg survey.

EBay may accelerate spending to market its U.S. auctions after U.S. revenue increased 18 percent, half the rate of international growth.

Whitman, 51, recruited Donahoe in late 2004, when he was managing director of Bain, a consulting firm where they worked together in the 1980s. Donahoe, a former college basketball player, is known within eBay for appearing in the company gym before 7 a.m. and for maintaining 75-hour workweeks and an intense travel schedule.

He has also made a habit of publicly acknowledging eBay's core problems, like lackluster customer service and the site's dated user interface. He has spent much of his tenure at eBay trying to bring consumers back to the site and, to that end, creating systems to measure how changes will affect the complex eBay environment, where alterations can and often do have unintended consequences.

Colleagues praise Donahoe's spirited and accessible demeanor.

He has "an uncanny ability to connect with everyone from receptionists to chief executives," Thomas Tierney, an eBay director and another Bain alumnus, said during an interview last year. "Getting along socially and being able to build relationships is a type of social bandwidth that is hard to come by."

Donahoe will need these personal assets.

The various problems of eBay, which is based in San Jose, California, are coming together in an ominous statistic: Fewer people are visiting the auction site in the United States, still a core driver of its business. Ten percent fewer customers visited eBay.com last December than in December 2006, according to the tracking company Nielsen Online.

Though eBay has tried to get its most loyal customers to buy more, the overall decline in traffic has depressed business. Gross merchandise volume, the total amount of all goods and services sold on eBay.com, has been growing at a slower pace over the last few years than e-commerce in general, which means that eBay is losing market share, particularly to Amazon.

Whitman's plans have not been disclosed.

Originally published by The New York Times Media Group.

(c) 2008 International Herald Tribune. Provided by ProQuest Information and Learning. All rights Reserved. Changing of Guard Announced at eBay Overseas Auctions Help Profit Rise 53%
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