eBay CEO Meg Whitman to step down

Updated at 3:20 p.m. PST with more background, analyst comment.

Meg Whitman is stepping down as chief executive of eBay after a decade, allowing a trusted insider to respond to slowed growth at the online auction pioneer.

Whitman has long said that every CEO should step down after 10 years to seek new professional challenges and make room for fresh leadership. Following her own edict, she will step down March 31 while remaining on the board.

"It's time for eBay, and this community, to have a new leadership team, a new perspective, and a new vision," she wrote on the company blog. A report that she would step down appeared Tuesday in The Wall Street Journal.

Meg Whitman

(Credit: eBay)

Replacing her is John Donahoe, head of eBay Marketplaces, whom Whitman recruited in 2005. Donahoe is well-respected by investors and board members, analysts said.

Whitman joined eBay in March 1998 and successfully navigated it through the dot-com boom and bust and on to near cult-like popularity with what was known as the "eBay economy." Through eBay, anyone with an Internet connection could find obscure collectibles or turn their dusty garage treasures into cash.

Now, the company faces growing competition from Amazon.com along with what one analyst calls "buyer fatigue" following years of revenue leaps.

"Whitman wasn't as innovative as her counterparts at Amazon and elsewhere...They definitely need a bit of a change of direction," said Aaron Kessler, an analyst at Piper Jaffray. "The biggest challenge is buyer activity. There's been buyer fatigue in the last year or so, with fewer people coming to the site and coming less often."

Sales are still growing, just not at the pace they once were. The company reported Wednesday that fourth-quarter profits rose 53 percent from a year earlier to $531 million, and revenue increased 27 percent to $2.18 billion.

However, the stock dropped about 6 percent in after-hours trading to $27.15 after eBay warned that revenue in the current quarter and for the full year would be below analyst estimates.

While auctions represent the majority of eBay's revenue, growth was led by other units, including PayPal, online ticketing site StubHub, Internet phone company Skype, classifieds, and advertising.

In an attempt to reverse the slowed growth, eBay has redesigned its auction site and cut some fees for listing items. Executives have hinted at further, more drastic changes to the company's listing and selling fees.

eBay took a write-down last year for its purchase of Skype, forcing it and others to reassess the value of the start-up.

Despite the concerns, the impact of Whitman's tenure should not to be overlooked, said Scott Devitt, an analyst at Stifel Nicolaus & Co.

"Meg Whitman was a phenomenal success running eBay for a decade," Devitt said. "She has overseen an 88-times increase in revenue and a more than 1300 percent return in stock since the IPO...What's happened is purely maturity and not necessarily bad business."

CNET News.com's Dawn Kawamoto contributed to this story.

[kgsbca]

Maybe Meg will go into business with her friend,

President Bush, who is also retiring in January, although the president wants to make speeches to "replenish them ol' coffers". After all, he is the "CEO president", a former businessman, who knows that the key to solving all problems is through tax cuts. Whitman was a big supporter of the president in both presidential campaigns, probably because she believed in tax cuts also. She didn't care about the rest of his economic policies, which led to the current state the economy is in, or the invasion of Iraq and the subsequent occupation, nor does she believe in global warming. Or maybe she did care about those things, and knew his policies were doomed to failure, but just wanted to pay less in taxes.

I'm hoping she gets a job in China. Maybe Bush will give her Karen Hughes' old job, where instead of telling people who hate us that "she's a mom!", she can tell them "I'm a used garbage saleswoman!" Just stay away from any successful American company.

sorry for slightly getting off on this tangent, I have just been bugged for the last several years about this woman, knowing that she contributed to the campaigns of a criminally negligent homicidal idiot. I expect that sort of behavior from the buy low-sell high, bleed-the-earth-dry guys who run the parasitic companies that extract all they can from the ground, but not from somebody who stood on the shoulders of web visionaries to become a billionaire...

[sq5]

Move along people, nothing to see here...

@kgsbca: Did you HONESTLY have to make a political statement out of this? Regardless of whether I would agree with you or not, I'd say you did more than "slightly" get off on a tangent...Sheesh.

[zeplin10]

... and "the story of the sponge"

Complicating the reaction to, and measurement of, Meg Whitman's success at e-Bay, are some facts. 1) Both Whitman and Bush have willingly become highly visible champions and icons of a philosophy, or point-of-view, of what "business" is now. 2) What business "is" now, is the story of the sponge. 3) Practical and impractical ideas, creativity, innovation, development -- ways of thinking and interacting, with other people and the environment, that have led us from thinking and interacting like packs of wild dogs, to sitting at a desk in yesterday's underwear and reading the morning c/net news -- is the sponge. 4) This "sponge" is not just the physical, hardware absorption properties of some material. 5) And not just a massive web of interconnected sponges that have expanded the capacity for absorption. 6) And not just a flood of lines of base-two referenced code, tapped down by an unseen army of Godzillas laying tedious, mosaic tile in someone's cyber bathroom. 7) What makes this "sponge" a truly super sponge, is the geometric explosion of potential ... for the association of more practical and impractical ideas, creativity, innovation, development. 8) So that the sponge becomes, or has the potential to become, its own, self-generating entity -- a part of us like us. 9) Enter what "business" is now. 10) Not the natural exchange of goods and services, created and made possible by the practical and impractical ideas, creativity, innovation and development of others. 11) Enter "business" as the empowered controller of the field of dreams, of what goods and services are exchanged. 12) Enter the hand that wrings the sponge. 13) Till it's dry. 14) Then moves on to find another sponge. 15) The only way success at this can really be "achievement," is if you want to think the people who are dancing in their hearts because they see the world coming to end -- are right. 16) And good. 17) So it's not off topic to see this story as part of a continuing allegory about right and wrong, good and bad, life and death. 18) That's the current, closed on-off world the icons have constructed, from what is used to keep attention narrow-filtered on a narrowed, up-and-down blip now. 19) Instead of thinking in the way that got us here, where time and space are open-filtered, and a continuous and changing variability provides a moving average, clearer view of who we were, and are, and want to be.

[sanenazok]

Who buys

Who buys anything on fleaBay in any event? Last thing I bought there might have been a year ago...now when I want used stuff I hit up Craig's list.

[plee9]

eBay is still around?

she should have stepped down sooner. eBay has turned into a playground for fake merchants. So many "authentic" Gucci's and Prada's from Hong Kong. nice~

[bill__]

It's not purely maturity at play

Almost a year ago (Feb 2007) eBay made a disasterous decision to implement SMI (so-called Safe-Guarding member's Identity). This policy prevents bidders on high-priced auctions (over $200) from seeing the eBay identities of who they are bidding against, making eBay a haven for potential shill bidders. As a buyer of high priced items (4 figures) this greatly curtailed my use and interest from that point forward. In essence, eBay said, trust us to weed out shill bidders, rather than you as it was before.

Well I have not. And both the frequency of visits and my willingness to buy has been diminished. Significantly.

This is not maturity, it's bad business judgement in play. eBay has lost focus on the community aspects that made them the success that they were. Then again that does sound like a maturing business.

[theoleplowboy]

I don't know anything about Meg but I do know that fleaBay will be out of the auction business if they keep screwing the sellers. Buyers can leave negative feedback for a seller for no reason whatsoever and the seller cannot leave negative feedback for a buyer period.

[joninmass]

i agree. This BS about taking away the option for the sellers to leave a negative for bidders who dont pay is atrocious. Alot has changed on ebay since 2000 and its getting worse and has also gotten more complicated and more restricted. Ebay has given more power to the buyers and they can leave anything thery want to the seller even if the transaction is 100% 5 stars. A buyer can ruin a sellers reputation by given them a negative and give them a poor star rating for no reason,, just to be a jerk. Its not fair.

[Trader1949]

It doesn't surprise me at all. They allowed all sorts of illegal items on the site now in there attempt to go the other way they are jerking sellers around both good and bad there have been many legitimate and legal sellers as my self who were blocked from ebay for selling legitimate trade marked Item as I was. They accussed me of selling illegal items that infringed on other trade marks. I did my research and the item thatat I was selling was a registered Trademark and it was confirmed through the Federal Trademark offices. JAY-Y enterprise Company Registered with the United States Patent and Trademark Office (Reg. No 2,582,314) on June 18, 2002 Their Designer Glasses and use DG as their word Designation. GADO S.A.RL. (Luemboug LTD LIAB CO) Registered Dolce & Gabanna (D&G) had their items (Reg. No 3,108,433) in June 27, 2006. Four years latter!!! They have been in litigation attempting to have DG Cancelled but have been unsugcessfull. They are both Legitimate and leagal at the moment. D&G it seems has been going to EBAY and informing them that certian Listed Sunglasses are violating their Trade mark. EBAY hasn't even took time o investigated their allocations. They merely remove the legitimate listings and penilize the Sellers for so call wrong doing when in fact it is D&G using Heavy handed tactics to Stymy compitition. Ebay was being the whimp in this and allowed themselves to led into bullying their sellers and altimately removeing many of them off their sight. There should be a glass action taken against them for their actions. So sure their sells are down. They Have buyers dissapointed in fraudulant sellers and sellers with good merchandise as myself being pussed off Because of the big boys greed. Ebay is only getting what they desearv for very poor consumer relations.

Don