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Tue Sept 30 2014 09:00:49

How Will John Donahoe's Tenure at eBay Be Remembered?

By: David Steiner

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In baseball, there's a saying after a team has a bad season: You can't fire the team, you fire the manager. 

John Donahoe's team at eBay has had a bad season, with growth that didn't keep pace with its competitors, a public confrontation with investor Carl Icahn, security breaches, site outages,.. you could say that eBay has had a very bad season.

Today, eBay announced that it will be splitting eBay and PayPal into two separate companies. Devin Wenig will head eBay, while American Express executive Dan Schulman was named as president and CEO-designee of PayPal. John Donahoe and CFO Bob Swan will have no executive position in the new companies.

No matter how John Donahoe's departure will be spun in San Jose, this was not a decision by Donahoe to "spend more time with family." It's not difficult to understand why eBay is going in another direction with its leadership. The question is why the board stuck with him so long in the first place.

Donahoe's lack of vision for the marketplace was severely out of place in an innovation-driven industry. His disregard for eBay's most valuable asset - its small sellers - was evident in his inability to communicate changes in policy to users in a timely fashion. Unannounced changes to the site sent merchants scurrying to catch up, causing them to change workflow (or stop altogether) and revise listings.  

While many sellers, prior to Donahoe's tenure, were able to resolve issues by reaching out to category managers within eBay, reports were rampant of staying on hold with outsourced customer service, often leading to no resolution of the issues.

Donahoe's legacy will be a dysfunctional search engine, a major security breach that compromised customers' sensitive information, and preferential treatment of large-box retailers, both domestic and Chinese, that took the eBay experience from one of being about Discovery, and made it mundane.

The bottom line is that Donahoe was the wrong man for the job.

Former CEO Meg Whitman professed that "a monkey could drive this train" when asked about leading eBay.  Despite her own shortcomings, Whitman seemed to have an understanding that eBay was a self-sustaining (and for the most part, a self-governing) entity. Even though eBay is comprised of hundreds of thousands of disparate merchants, they all have once thing in common: Profitability. The vast majority of sellers know that to sustain their businesses, they have to maintain good service and give customers a good experience. Nothing is as strong a motivator as acting in one's own best interest.

This is not to say that eBay did not have problems prior to Donahoe's tenure. Fraud was a constant problem, fee circumvention by sellers was an issue, technical problems were frequent due to the site's ancient platform. But six years later, are any of those issues any better?

Donahoe will reach back to his Bain roots and oversee the split of eBay and PayPal, then will likely remain on the board of one or both companies. And while it remains to be seen how eBay's merchants will fare under Devin Wenig, one thing is inarguable. The Donahoe Era was a disaster for small sellers.

David Steiner is cofounder and President of EcommerceBytes.com

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Readers Comments

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

This user has validated their user name. by: Al G

Tue Sep 30 09:29:11 2014

Bravo! Well written synopsis of the Donahoe Debacle.

And why is it we don't hear about this in other media????

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

This user has validated their user name. by: Al G

Tue Sep 30 09:35:03 2014

Now to the business at hand -
My Spidey Tech sense is wondering how well integrated PayPal and eBay servers are - and what chaos will it cause when they are separated like Siamese Twins.

We KNOW how good eBay's IT department is, don't we.

They don't call it dis-intergration for nothing.

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

by: smallmiracle This user has validated their user name.

Tue Sep 30 09:47:34 2014

Thank God is all I can say!!!  

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

by: SleepyTime This user has validated their user name.

Tue Sep 30 09:50:07 2014

Thank you David for this article and I hope it goes far and wide through the media.  John Donahoe was the worst CEO ever with his 'innovative disruptive'.  Well, it did disrupt....  

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

This user has validated their user name. by: Basset

Tue Sep 30 09:52:37 2014

The thing is - not many outside of Ecommercebytes, a few other sites, and the sellers themselves have ever cared about how the sellers were actually faring at eBay.


Donahue, like many other 'big business' people, will be appear in media with some glossy verbiage that says nothing.  With his ties to government, he will never be made to appear as a bad apple. That can't be allowed to happen.



How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

by: Massachusets Howler This user has validated their user name.

Tue Sep 30 09:56:31 2014

Csn JD be REMOVED sooner?

This man needs to be CHARGED.

MH

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

by: Massachusets Howler This user has validated their user name.

Tue Sep 30 09:57:08 2014

I will believe it when I see it.
MH

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

This user has validated their user name. by: 360

Tue Sep 30 09:58:23 2014

Thank you Ina and David for voicing the opinion of many small sellers over the years.

I for one will be sending a link to this article to as many reporters as I can dig up. This perfectly states Donahoe's time as CEO. This is the only site willing to put it on the line, so have the Times and Journal talk to Ina and David. I feel perfectly comfortable having them speak for me.

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

by: rhawk This user has validated their user name.

Tue Sep 30 10:03:26 2014

The man is an A**hole.  An incompetent A**hole. Can we speed it up????

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

by: sparky This user has validated their user name.

Tue Sep 30 10:43:03 2014

I don't know if ebay will become any better, but as a seller, Donahoe's impact on ebay makes "negative" seem like a compliment.

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

by: HereInMinnesota This user has validated their user name.

Tue Sep 30 10:45:24 2014

Hear hear and hooray!!!

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

This user has validated their user name. by: iheartjacksparrow

Tue Sep 30 10:46:15 2014

How will JD be remembered? As the biggest (bleep)-up in the history of commerce.

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

This user has validated their user name. by: The End

Tue Sep 30 10:48:50 2014

EXHALE !  Whew !

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

by: doboy This user has validated their user name.

Tue Sep 30 10:50:04 2014

Last miracle I believed in was the Vision at Lourdes.  Why oh Why oh Why do situations turn into virtual wars before someone realizes the Captain of the Ship needs to walk the plank.  Mutiny on the Bounty revisited.

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

by: pennie6500 This user has validated their user name.

Tue Sep 30 10:50:12 2014

This is my first comment here, but I just had to comment about this one.  "Ding dong, the witch is dead!"

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

by: ellisdtripp This user has validated their user name.

Tue Sep 30 10:53:56 2014

FINALLY!! Now we can only hope the new CEO will unf*ck the mess Donohue leaves behind. Good riddance.

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

by: pace306 This user has validated their user name.

Tue Sep 30 10:53:58 2014

I've said it 100000000x times and Ill say it again - NEITHER eBay NOR Paypal have CEOs and board memebers that have ANY ecommerce experience.

JD had NO idea at all what he was doing. He was a DUMB guy that thought his MBA was a magic piece of paper that had all the answers.

eBay was not a company ripe for take over, eBay wasnt a company that needed to be drained for its assets.

eBay is/was a ecommerce company - that if run properly - could give Amazon a good fight.

But JD ONLY knew 1 thing - when profits were down, BLAME THE SELLER.

It must be that sellers werent doing THEIR jobs and so they must be punnished - clamp down on them again.

How many people here - Ming, Basette, RIC, Annie etc said OVER AND OVER that eBay stock was 55.00 for YEARS, while Amazons continued to grow?

RIght now 11main is nothing - not any better then Rakuten, Sears or Newegg - but that doesnt mean they cant get better.

JD was a failure on SO MANY levels its not even funny. How hes not being charged with malfisence is beyond me.

5 yrs ago (based on capitalization charts) eBay had almost 9 BILLION sitting offshore, today its less then 5. WHERES THE MONEY GOING JD?

ANSWER - its being used to prop up a failing enterprise.

Only a CHILD like JD would fight with Google, walk away the looser (by not getting your items into google properly) and then claim some kind of VICTORY? DUDE - WTF?

How many site breaches have to happen before you take it SERIOUSLY?

How many large sellers have to leave before you wake up?

Are 3 Vera Bradley dresses (being sold) better then 1000 headphones, iPods and collectibles?

What a dumb man - ANYONE that hires him for ecommerce is a fool.

He cant go fast enough.

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

by: Will This user has validated their user name.

Tue Sep 30 10:56:02 2014

I think his "legacy" depends on how well Wenig does. If Wenig turns things around, Donahoe will be viewed as the catalyst, and will be forgiven.

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

by: MRV This user has validated their user name.
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Tue Sep 30 10:59:41 2014

An excellent synopsis.  

It was interesting to read Meg's quote of  'a monkey could drive this train', seeing how she started the proverbial train wreck, that Donahoe managed to run off the cliff.

Will the changing of the guard make any difference, considering the latest punitive changes at eBay and PayPal?  And the exploitive ''six months'' returns policy being imposed?

Sometimes it's all about the devil that you know.

How Will John Donahoe's Tenure at eBay Be Remembered?   How Will John Donahoe's Tenure at eBay Be Remembered?

by: Denizen This user has validated their user name.

Tue Sep 30 11:00:56 2014

Excellent article!!  Now if I can just hang in there until all this comes to pass.

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