Ebay shake-up responds to Google threat
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Ebay, the leading online auction site, has shaken up top management as it faces a new threat from its internet rival Google.
Meg Whitman, chief executive, announced the departure in the autumn of Jeff Jordan, president of its PayPal online payments service.
Mr Jordan joined Ebay in 1999, led its core North America division from 2000 to 2004, and took over at PayPal in December of that year.
Both services saw strong growth under his leadership, PayPal’s payment volume growing 89 per cent to $8.8bn and user accounts up 85 per cent to 105m.
Ebay said Mr Jordan, who had been seen as a potential successor to Ms Whitman, was leaving to spend more time with his family.
The company’s shares hit a 52-week low on the news, down more than 5 per cent at $26.85 by the close of trading in New York. They have lost nearly 40 per cent of their value this year.
The company has suffered from slowing growth in its core US market and setbacks abroad, including loss of market-share leadership in Korea and a sliding share in China.
Last week, its PayPal service was hit by the news that Google had launched its long-awaited online payments service – Google Checkout. Ebay this week banned Checkout as an online payment service for its users, saying it was part of a policy to promote payment methods that “are safe, easy to use, reliable, and offer high levels of protection for users”.
Citigroup on Thursday lowered its long-term earnings growth estimates for Ebay from 22 per cent to 20 per cent because it had concluded that Checkout was a greater challenge to PayPal’s long-term growth than was widely recognised. It said Checkout had leapfrogged PayPal in terms of speed of checkout for consumers and cheaper transaction fees for merchants. While that was not expected to effect forecast revenues of $1.4bn from PayPal in 2006 – 24 per cent of Ebay’s total – it could do so later, Citigroup said.
Mr Jordan will be succeeded at PayPal by Rajiv Dutta, who was chief financial officer and head of strategy from 2001 to 2005, before becoming president of newly acquired Skype, the internet telephony service. Alex Kazim, head of products at Skype, will become president. Ebay has been trying to boost Skype adoption in the US with an advertising campaign and free fixed-line calls.
Ebay also named Lorrie Norrington as president of Ebay International. She was previously president and chief executive of Shopping.com, a price comparison website owned by Ebay.
Additional reporting by Kevin Allison in San Francisco
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