CEO of eBay may retire, report says

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Associated Press / January 23, 2008

SAN FRANCISCO - News that eBay Inc. chief executive Meg Whitman may retire comes as the online auctioneer faces slowing growth and disappointing returns from its $2.6 billion gamble on the Internet phone service Skype.

Whitman is preparing to retire after a decade at the helm, according to a report in yesterday's print editions of The Wall Street Journal.

EBay spokesman Hani Durzy declined to comment and called the report "rumor and speculation."

The newspaper, citing unidentified people familiar with the matter, reported that Whitman has increasingly been delegating daily responsibilities and is working on a plan of succession.

In October, the company reported its first quarterly loss since 1999 after a $900 million write-down in the value of Skype, which it purchased in 2005 for $2.6 billion.

The company is scheduled to report its fourth-quarter earnings today.

Ebay's slowing revenue growth and the Skype acquisition may have helped Whitman decide that "it might be the right time for a change," said Scott Kessler, an equity analyst for Standard & Poor's.

"It just seems like her legacy has been sealed and she has done everything she can do," Kessler said. "It's time to move on."

Kessler said that eBay has been outmaneuvered in recent years by Inc. But he gives Whitman high marks for building one of the Internet's best-known brands and one of its most profitable companies.

Investors have been buzzing about the possibility that Whitman might resign since last summer, when she began spending more of her time campaigning for Republican presidential candidate Mitt Romney.

EBay shares sank to a 52-week low of $26.02 in morning trading and closed the day at $27.13, down 4.24 percent from $28.33 at Friday's close.

Whitman joined eBay in 1998, three years after entrepreneur Pierre Omidyar introduced the site to consumers and six months before the company went public.

A decision about her departure could be made within weeks, the Journal reported.

The paper said John Donahoe, 47, whom Whitman recruited in 2005 to head eBay's auction business unit, has emerged as her most likely successor.

Analysts who follow the e-commerce giant said Whitman's retirement would not be surprising, given her long tenure.

Few executives who helped pioneer the commercialization of the Internet have remained on top for as long as the 51-year-old Whitman. When she joined eBay in 1998, the company employed 30 people and had revenue of $86 million that year.

The company now employs 15,000 people and had $5.97 billion in revenue last year.

Its divisions include PayPal, which handles electronic payments, and the ticket broker, but its core online auction business accounts for more than two-thirds of eBay's annual revenue.

Few of the executives who helped to commercialize the Internet have stayed on top for as long as Meg Whitman of eBay.


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