By Sebastian Herrera and Allison Prang
EBay Inc. Chief Executive Devin Wenig has left the online
marketplace citing conflicts with the company's new board, which is
overseeing a strategic review of the business.
The San Jose, Calif., company has been evaluating its business
since March after activist investors Elliott Management Corp. and
Starboard Value LP had criticized the company's performance and
called for breaking it up.
The company, which has been searching for growth in light of
steep online retail competition, said it plans to share the results
from that review this fall.
Mr. Wenig, who is also stepping down as a board director, served
as CEO for more than four years. He joined the firm in 2011 as
president over its marketplace, which generates the bulk of eBay's
revenue.
"In the past few weeks it became clear that I was not on the
same page as my new Board," Mr. Wenig tweeted from his personal
account Wednesday. "Whenever that happens, its [sic] best for
everyone to turn that page over."
EBay declined to comment about Mr. Wenig's statements.
"Notwithstanding this progress, given a number of
considerations, both Devin and the board believe that a new CEO is
best for the company at this time," Chairman Thomas Tierney said in
a statement.
EBay said Chief Financial Officer Scott Schenkel will serve as
CEO on an interim basis while it conducts a search for a successor,
adding that it will consider internal and external candidates.
Andy Cring, currently vice president of global financial
planning and analysis, will serve as interim finance chief.
Shares in eBay fell about 1% in Wednesday trading. The stock has
gained about 40% this year.
Earlier this year, eBay agreed to add three new board members
after reaching agreements with big hedge funds Starboard and
Elliott. So far eBay has added two new directors, including Jesse
Cohn, who runs Elliott's U.S. equity activism.
Elliott and Starboard had pressured the online marketplace
company to rid itself of StubHub. Elliott had also said eBay should
unload its classified advertising business.
The company paid its first-ever quarterly dividend in March;
months earlier, it pledged to return $7 billion to shareholders
through dividends and share buybacks over the next two years. EBay
on Wednesday maintained its revenue outlook for the year, expecting
revenue between $10.75 billion and $10.83 billion, which would
represent growth of between 2% and 3% from 2018.
Mr. Wenig became eBay's CEO after the company spun off PayPal in
2015, which it had purchased in 2002 for roughly $1.5 billion --
one of the biggest tech deals at the time. The rationale for the
split was that it would allow both companies greater flexibility in
their respective industries, eBay in online retail and PayPal in a
rapidly evolving payments industry.
Currently, PayPal Holdings Inc. carries a stock market value of
more than $120 billion, while eBay's is more than $32 billion, the
latter being little changed since the spinoff.
Pierre Omidyar led eBay from its founding in 1995 through 1997.
Meg Whitman, who steered the company through its 1998 initial
public offering, left the company in 2008. Its next CEO, John
Donahoe, ran eBay from then until 2015.
Mr. Wenig has faced difficulties in growing the company from its
roots as an online auction into more of a true marketplace. EBay
has tried to attract younger customers and worked to get brands to
sell more of their products through the company's e-commerce
platform.
Yet with those difficulties, eBay's annual revenue has grown in
each year after the PayPal sale.
"Devin did a really great job initially shepherding the
transition following the separation of eBay and PayPal," said D.A.
Davidson analyst Tom Forte. "Where Devin could've done a better job
is taking eBay to the next level." With the CEO's exit, Mr. Forte
said he believes eBay is more likely to sell the classified
business, StubHub or both.
Mr. Wenig's departure also follows a string of other high-level
exits from eBay over the past year or so, including chief
technology officer Steve Fisher, who left in May, and chief product
officer RJ Pittman, who left in 2018.
Beginning in late 2018, eBay began making drastic changes to its
managed-payment systems, allowing sellers to manage their selling,
payments and other services within one account and accepting
different forms of payment.
EBay also has been altering its advertisement business. And it
recently shut down its third-party ad network that let merchants
advertise on other sites to focus on promoted listings on its own
site
While eBay has said its new initiatives could bolster the
business, it hasn't seen enough growth to offset problems
elsewhere.
EBay's revenue growth has been slowing, rising just 2% in its
most recent quarter from the prior year, as the value of goods sold
on its site has declined, falling another 4% in the quarter to
$22.6 billion.
Once an online juggernaut, eBay has struggled to match the
growth of its larger rival Amazon.com Inc., which commands about
38% of U.S. online retail sales, according to eMarketer, while eBay
has just a 6% share.
Unlike Amazon, which has built warehouses throughout the
country, a third-party seller network and built up its own brands,
eBay's revenue relies heavily on transaction fees, and it hasn't
grown its own distribution network.
In July, eBay launched a fulfillment service, but only for its
biggest sellers.
"They did not have people who had a lot of experience in
e-commerce or who knew e-commerce in the early years," a former
eBay board member said. "Devin has been more of an operations guy
than an innovator."
--Colin Kellaher contributed to this article.
Write to Sebastian Herrera at Sebastian.Herrera@wsj.com and
Allison Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
September 25, 2019 17:13 ET (21:13 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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