eBay: Whitman and Cobb out, Donahoe and Dutta take over

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So it’s official, Meg Whitman is to leave after 10 remarkable years (sullied by some mishaps of late.) As Youssef Squali, an analyst at Jefferies, puts it: "She will be remembered as one of the best CEOs of the dotcom [period], who made it successfully through the bubble and the nuclear winter."

This also means a broader reshuffle. Rajiv Dutta may have been passed over for the top job (see note below) but he’s clearly been made John Donahoe’s number two with the new title of executive vice president and Donahoe’s old job of running the marketplace division. One-time contender Bill Cobb is out, and will retire from the company at the end of the year.

Meanwhile Donahoe has decided to reset the bar, with a prediction that eBay’s revenues will grow by only 12.5 per cent this year. That is shocking – revenues were up nearly 30 per cent in 2007. It suggests that much more is going on than a tinkering with eBay’s fee structure, a move that had already been in the air, and that the fundamental model on which eBay has functioned is now under scrutiny. After three years trying to revive the marketplaces business – with only modest success – Donahoe seems to have decided that something far more drastic is needed.

Update: extra details revealed on the analyst call this afternoon showed the slowdown isn’t quite as severe as it seemed. Leaving aside the effects of the falling dollar and acquisitions, revenues in 2007 grew only 21 per cent. But this is still a big adjustment to the eBay model. As eBay lowers its listing fees (and sees the volume of listings rise), much rides on a better search engine to sift out the best goods at the best prices from the sellers who give the best service. Promises from eBay in the past to improve the quality of search have been a disappointment.

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