EBay CEO Whitman preparing to retire: report

NEW YORK Tue Jan 22, 2008 5:27am EST

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NEW YORK (Reuters) - EBay Inc (EBAY.O) Chief Executive Meg Whitman, one of the most powerful women in business, is preparing to retire from the online auctioneer, the Wall Street Journal said on Tuesday.

A departure by the Silicon Valley veteran would come at a time when one of the best-known companies on the Internet is trying to recapture the runaway growth that made it into a household name.

But Whitman, 51, would also be following her own advice that no CEO should stay more than a decade in the job, a philosophy that reflects the unassuming character which made her popular among the sellers who use eBay's auction site.

John Donahoe, the 47-year-old president of eBay's auction business unit, is the leading candidate to succeed Whitman, said the newspaper, quoting unidentified sources.

The report said the departure could be announced within weeks, although it also added that the situation "remains fluid". Whitman had recently begun delegating more daily responsibilities and was completing succession plans, it said.

EBay spokesman Hani Durzy declined to comment.

AFTER A DECADE

The company had only a few dozen employees at the time Whitman joined as president and CEO in early 1998. It held its initial public offering six months later.

About the time she joined, Whitman said, "No CEO should stay more than a decade in the same job," arguing that executives need fresh challenges and organizations need new perspectives.

Under Whitman's leadership, eBay has turned into one of the most-visited sites on the Internet.

But the company's growth has weakened in recent years. A slower core auctions business, rising competition from online retailers and missteps with the acquisition of online communications company Skype have cut the stock price almost by half from its peak three years ago.

Last October it announced a $1.4 billion write-down of its investment in Skype.

The shares closed at $28.33 in Nasdaq trade on Friday, down from their highs of nearly $60 in late 2004. The company is due to announce its fourth-quarter results on Wednesday.

Donahoe, who is president of the core marketplaces business, has been seen as a leading contender for the top job if Whitman left.

He joined eBay in March 2005, and now runs the biggest of the three business segments that make up eBay -- marketplaces, PayPal online payments and Skype communications.

CHALLENGES AHEAD

Any successor is seen facing a difficult task of regaining shareholders' confidence while satisfying the highly restive group of "powersellers" that drive the eBay auction community.

Some investors have called for drastic action to revive revenue growth in the core auctions business, including raising the transaction costs for successful sales -- a move that would likely meet strong resistance from users.

Critics have also said the company should consider a mega-merger, perhaps with Yahoo Inc < YHOO.O> or Microsoft Corp (MSFT.O), in a bid to fend off inroads from Internet search leader Google Inc (GOOG.O).

Whitman, a former management consultant who graduated from the elite Princeton University, was known for a folksy style that made her a trusted voice among the auctioneer community.

At a Goldman Sachs conference in Las Vegas last May, an audience member challenged Whitman during her presentation by asking for a show of hands of those who had recently bought items on eBay. Not many hands were raised among a room full of top-flight investors.

Whitman responded that eBay's core demographic was "more likely to be found shopping in the aisles of Wal-Mart."

Prior to joining eBay, Donahoe was the worldwide managing director of Bain & Co, where he oversaw the consulting firm's 29 offices and 3,000 employees.

He also previously held jobs at corporate phone equipment maker Rolm Corp and at Salomon Brothers, now a unit of Citi.

(Reporting by Eric Auchard and Ritsuko Ando; Editing by Quentin Bryar)

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