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eBay chief executive set to retire

An era at eBay is about to end.

Meg Whitman, chief executive of eBay for the past 10 years, is retiring, a person with knowledge of the situation said.

The company intends to replace Whitman as chief executive of the Internet auction giant with John Donahoe, 47, president of eBay's marketplaces division, which includes its large but stagnating online auction business.

The announcement could come as early as this week.

Whitman, 51, recruited Donahoe in late 2004, when he was managing director of Bain & Co, 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 7am and for maintaining 75-hour work weeks 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 in 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," he said.

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 US, still a core driver of its business.

Ten percent fewer customers visited eBay.com last month than in December 2006, the tracking company Nielsen Online said.

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.

The expected change of chief executives was first reported by the Wall Street Journal on Tuesday.

Whitman's plans have not been disclosed, but she has been a contributor and fund-raiser for Mitt Romney, a Republican presidential contender. Like Whitman, Romney is a Bain alumnus.

Wall Street analysts and eBay observers have been preparing for Whitman's departure for some time, particularly as eBay's stock price has sagged.

"If Meg leaves, it's not the end of the world," said Robert Peck, an analyst at Bear Stearns. "The management team is deep. They have been grooming Donahoe for two years, and Bob Swan, the chief financial officer, comes from GE."
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