eBay's identity crisis continues under new leadership.
As it approaches its 25th birthday, eBay is facing an identity crisis. Sales are stagnant, activist investors are on a warpath and customers say it lags Amazon, Walmart and other online retailers on a range of retail measures.
Those are the conditions that greet Jamie Iannone, the newly appointed CEO of the e-commerce giant. Iannone served most recently as COO of e-commerce at another major retailer, Walmart, after successes in high-profile positions at its warehouse chain subsidiary, Sam’s Club, as well as at bookseller Barnes & Noble’s digital unit. The new role isn’t his first stint at the multinational auction site, either; he worked for eBay from 2001 to 2009, including as a vice president.
The returning executive inspires cautious optimism that he can revitalize the company and placate its critics. With a bachelor’s degree in engineering from Princeton and an MBA from Stanford’s School of Business, the 47-year-old succeeds Devin Wenig. Wenig resigned after clashing with two activist investors, Elliott Management and Starboard Value, hedge funds that pushed eBay to expand the marketplace platform while selling off assets. The company has since sold ticket-resale site StubHub and is currently evaluating offers for its international classified ads business.
One company that eBay shouldn’t have spun off into a separate business is PayPal, says Andrew B. Whinston, director of the Center for Research in Electronic Commerce at the University of Texas at Austin: “For many years, eBay was a combination of two companies: the auction market, which is now just a place to buy and sell products, and a high-tech payment company with patents and innovations.” He sees the 2015 decision to take separate roads as eBay’s original sin: “The value of the combined company was probably mainly for the PayPal part. Once they split, PayPal tripled while eBay alone fell.” Boosting profits by selling assets, he suggests, is only a temporary fix when there is no clear strategy in place. Can Iannone thread the needle of investor demands any better?