Monday, September 10, 2007

10 Reasons Why Meg Whitman will Leave eBay by Q3 '08

No, this is not a rip-off of Letterman, mainly because I couldn't think of 10 "funny" reasons why I think Meg is leaving. I'm just observing what is happening in and around eBay, taking into consideration outside influences (Mitt Romney), considering Meg's own statements, adding a touch of options exercising and throwing it all into a pot and stirring it together into one list. I certainly don't think it is a foregone conclusion that she is leaving but I think it is becoming clearer that the wind is blowing in that direction.

IMO, there is a perfect storm building for her to make a change and because she is the "very" public face of a "very" public company, with thousands of employees, hundreds of thousands of investors and millions of buyers and sellers, her leaving would be A BIG DEAL!

***Warning, this is pure speculation***

If you read this post and it doesn't make sense or seems far fetched then tell me why. If my speculation has merit then we won't know for a year. If it has no basis in reality, it will die like so many of my other posts.
  1. Meg's own words set the stage for a change; the following quote comes from an interview of Meg for the San Francisco Chronicle, back in November of 2006:

    Q: You said in the past that a CEO should probably serve 10 years. You've served eight. What are your plans? Will you follow your own advice?

    A: The first piece of advice I wish someone had given me as a freshman CEO is to keep your mouth shut. Somehow I didn't get that advice, which is don't talk about when you're coming or when you're going because it just creates a set of questions that probably aren't productive.

    Her response was: she should have kept her mouth shut, not that her position regarding a CEO only staying on the job for 10 years, had changed. (She has perfected "eBay Speak" since her freshman year as CEO)

  2. She is very close to Mitt Romney, and is National Funding Co-Chair of 2008 Presidential Campaign. If he gets the Republican nomination for President in the Spring, look for her to become more active in his campaign. I certainly don't believe she would leave eBay to work on his campaign but if he is elected President I would think that a Cabinet Post would be too hard to turn-down. Put this reason down under outside influences that might affect her decision.

  3. Within the next 6 months, the current Buyer Experience initiatives will be in full effect and the changes will have become a huge part of her legacy. If the changes are effective and turn-around the Marketplace business, she could go out on top. If the changes don't fix the problems then investors will start to grumble even more than they are now and there will be a call for change. Either way, I see a change coming.

  4. She has begun to exercise her stock options. While this may just be personal financial planning, the timing is certainly intriguing and leads to speculation (which gives me something to write about).

  5. The problems are mounting: Amazon is targeting Sellers, Skype is stuck in neutral, China failed, eBay US and eBay Germany are stagnant or declining and there are no easy fixes. If she can't come-up with solutions to fix each of these businesses then the Board of Directors will find someone who can.

  6. Remember this is speculation: I think eBay is getting ready to spin off all or part of PayPal. This move would solidify her management legacy and take attention away from the problem children: Skype and Marketplaces. Look for her to move on after a successful spin-off of PayPal.

  7. Dealing with angry investors, sellers, buyers, lawsuits, the press and bloggers has got to take its toll on a person, even a Super CEO. I can't imagine with all the negatives facing eBay at the moment that she has not at least developed an exit strategy.

  8. I wasn't going to bring up any personal reasons but I needed to get to 10: Her kids are grown and there are few family reasons to stay.

  9. She doesn't need the money and she hasn't stayed at a job for longer than 3 years since Bain & Company (8 years) in the early 80's. History does tell us some things.

  10. The challenge of growing something is much more enjoyable then the challenge of saving something (at least for most people). Leadership at the top needs to change to reflect the changes in the Marketplace. It is time for a change.
There are a few things that I believe might keep her at the helm for the sort-term.
  1. Mitt Romney's Campaign never gets off the ground (that was an attempt at humor).
  2. eBay merges with Yahoo.
  3. eBay makes a huge acquisition (like Facebook).
  4. They don't spin-off PayPal.
So, if I was a betting man, I would say that there is a better than 50% chance that Meg will leave eBay in the next 6 - 12 months.

Just my 5 cents!


ONLYEBAY said...

Excellent post. I think you are spot on the money. Two questions for you.

1. Who do you think is in line for her job? I wish Jeff Jordan was still around - he would have been my pick.

2. How do you think wall street will react? She is after all an iconic CEO. I guess this question depends a little on the first.

Btw, there was an additional interview by the Financial Times where Meg tried to reassure investors she was here for the long-term. But that was already over a year ago.

Randy Smythe said...

The most likely successor would be John Donahoe but I have serious reservations about him as CEO. He's really a behind the scenes type of guy and eBay needs a outgoing CEO.

I really think they need someone from the outside. A big name that will be able to make the hard choices (no sacred cows)perhaps someone in the Executive ranks at Google or Amazon. They need a veteran Tech Executive not a consultant from Bain & Company.

ONLYEBAY said...

Have done a little more reading up on John Donahoe. A very accomplished individual but, as you say, relatively behind the scenes. That might not be so bad though. I think

Meg has been caught offguard many times precisely because she puts herself in the firing line once in a while. If John can rework EBAY from the inside there may be a need for such a public face.

Randy Smythe said...

From what I understand Donahoe has been heavily involved in strategy and acquisitions and he would be the most likely choice.

I don't have any problem with him running a diversified company but eBay needs someone new at the helm of their marketplace businesses. SOmeone with retail experience.

If they want to keep up with the growth in ecommerce they need to start thinking like a retailer.

I thought hiring Michael Linton, formerly of Best Buy, would have been a good move but he's even more behind the scenes then Donahoe. I sometimes wonder if he even still works there.