Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Mon Feb 24 2014 09:57:33

eBay Defends Board Members Against Carl Icahn's Attack

By: Ina Steiner

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eBay had to go on the defensive in the wee hours Monday morning after "activist shareholder" Carl Icahn, who is seeking two seats on eBay's board, accused two current board members of having conflicts of interest and suggested Marc Andreessen and Scott Cook immediately resign. His battle against eBay kicked off last month when he submitted a non-binding proposal for eBay to spin off PayPal into a separate company.

On Monday, Icahn published an open letter to eBay shareholders saying he had discovered multiple lapses in corporate governance.

"We have found ourselves in many troubling situations over the years, but the complete disregard for accountability at eBay is the most blatant we have ever seen. Indeed, for the first time in our long history, we have encountered a situation where we believe we should not even have to run a proxy fight to change the board composition. Rather, we believe that in any sane business environment these directors would simply resign immediately from the eBay Board, either out of pure decency or sheer embarrassment at the public exposure of the extent of their self-serving activities."

He also had words for eBay CEO John Donahoe: "While Mr. Donahoe is feeding information to competitors on the eBay Board and selling the company's assets to board members, notable PayPal architects including Elon Musk and David Yammer are publicly questioning his strategy."

eBay quickly shot back in a press release published just after 6 am Pacific defending Andreessen and Cook, calling them two of the most respected, accomplished and value-driven technology leaders in Silicon Valley.

"Marc Andreessen and Scott Cook bring extraordinary insight, expertise and leadership to eBay's board, which is scrupulous in its governance practices and fully transparent with regard to its directors' other affiliations and businesses. And eBay Inc. President and CEO John Donahoe is widely respected for his turnaround of eBay and leadership of the company over the past six years."

PayPal's former president was also dragged into the war of words. Icahn wrote, "In an environment where an accomplished leader such as Scott Thompson, the former CEO of Yahoo, is dismissed for adding two words, Computer Science, to a degree from Stonehill College, it is incredible that so many blatant indiscretions at eBay have been tolerated by Mr. Donahoe and the other board members."

Icahn said Donahoe appeared to "lack awareness about what is going on around him on his board and in the marketplace," and called his general stewardship of the company myopic.

He said eBay needs fresh stockholder representation on the board to avoid becoming yet another example of a technology company with a management team and board that refused to adapt, citing Blackberry, Dell and AOL, among others.

eBay characterized Icahn's letter as "mudslinging attacks."

You can find Icahn's letter on ShareholdersSquaretable.com. eBay's response is found on the eBay blog.

Comments (81) | Leave Comment | Permalink
Readers Comments

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: OnceuponaTime This user has validated their user name.

Tue Feb 25 11:57:19 2014

''we prefer to engage in more constructive and substantive discussions of why, in our view, PayPal and eBay are better together.''

Then why doesn't jd request an open forum with Icahn....a debate so to speak.... where both can  defend their policy and accusations.

Since Icahn has nominated 2 people to the board.

Ina you should send them both an email requesting both to a debate defending their statements, and you should air the debate on ecommercebytes.....My guess is jd will reject the request hands down

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

This user has validated their user name. by: Puck

Tue Feb 25 12:56:12 2014

"Then why doesn't jd request an open forum with Icahn....a debate so to speak.... where both can defend their policy and accusations."

That's an easy one.
If Donahoe isn't the world's most inept public speaker, he's first runner-up.

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: charcorvet This user has validated their user name.

Tue Feb 25 13:35:30 2014

This will be like trying to decide between Ghengis Khan and Attila the Hun.

I'd rather the inept Devil I know than the the other one I have heard a lot about, the one who raids companies, breaks them up, dissolves them, puts everybody there out of work, dumps their customers in the dust and takes his money and runs.

NOT a fan of Icahn...ever, anywhere but especially not in eBay's board room.

Chip in and we'll buy his shares back and get rid of him. THAT we can do

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: comet This user has validated their user name.

Tue Feb 25 14:21:20 2014

Somebody "stole"  my comment about  "The Emperor HAS no clothes"---

I think Icahn has been around this block a time or two.  And I suspect he was waiting for the Ho to actually PROVE how stupid and careless he REALLY is before moving.  Like the lion waiting for the crippled antelope.

I don't know too much about this guy but at this point I too think almost ANY shake up and opening to the sunlight actions against the entrenched eBay team is WELCOME.  They have proven over and over that they CAN'T run the company without resorting to being a bunch of school yard bullies name calling and all;  they have NO clue as to who pays the BILLS; and they have the attention span of a gnat look there is a shiny squirrel lets make a new seller hurdle.  

Without ebay Paypal might cease to exist as WE know it but without Paypal ebay might cease to exist at all.

To NOT fear Apple and Amazon and Master Card etc---what rock HAS this guy been under????

Wish I lived closer to roll out that red carpet for ol' Carl.  

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: JoyfulA This user has validated their user name.

Tue Feb 25 14:26:54 2014

John will have to take a thinking week.

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

This user has validated their user name. by: Philip Cohen
Web Site

Tue Feb 25 15:30:12 2014

Some readers are missing the point, all the payments “middlemen” such as “PreyPal”, Amazon, Apple and Square operate as little or no more than Credit Card Merchants via their own retail banker; they all ride precariously, at the pleasure of the banks, on the back of those retail banks’ existing payments systems; none of them have their own interactive payments system, as do MasterCard, Visa, Amex and Discover; none of the middlemen are licensed as financial institutions nor, except a few, even as money transmitters; they are simply “merchants of sorts” operating credit card merchant accounts; none of them have interactive access to depositors’ funds with the real retail banks.

The fact is these middlemen are no threat to either MasterCard or Visa (or Amex), “PreyPal” particularly is no longer even an “online” threat (outside of eBay) now that MasterCard and Visa have launched their own, professional, digital wallets; regardless, if all the pretenders disappeared tomorrow there would be no detrimental effect on the credit card companies …

A few years ago I hypothesized as to why the clunky “PreyPal” became so concerned about credit card charge backs and started holding payees’ funds more generally to protect themselves from antagonizing the credit card companies due to the, apparently, increasing number of such charge backs on their merchant account, and this “protection” has manifested itself in the only way practicable, in a most unprofessional, hard wired bias towards buyers in any transaction dispute …

Draft Media Release re PayPal—Confidential

“It is with great sadness that eBay’s delusional chief headless turkey, Johnny Ho (aka “Peter Principle”), announces the anticipated incapacitation of eBay’s most ugly adopted daughter, PayPal. “PreyPal” is about to be stricken by particularly virulent strains of MasterCard “MasterPass” and Visa “V.me”, accompanied by insurmountable financial institutions complications due to too many credit card charge backs and also much merchant dissatisfaction. PreyPal may therefore be expected to soon begin to deteriorate in health and, if ultimately not completely incapacitated, will most likely be eventually confined to servicing what little there will be left, by then, of the Donahoe-devastated eBay marketplace and to being the merchant account provider of last resort for those online sellers that do not have the confidence of their own retail banker. There is no known cure this condition, and the “eBafia Don” is particularly saddened by the inevitability that, in the not too far distant future, PreyPal will be unable to continue to underpin the eBay marketplace’s atrophying revenues.”

As far as “PreyPal” defending credit card charge backs is concerned, “PreyPal’” simply will not invest the human resources necessary to even think about mediating such matters professionally. Yet, if you have ever had a problem with a credit card or had a merchant account with a real bank you would know that, unlike “PreyPal”, your bank offers a prompt and professional transaction mediation process …

Then there, of course, are Johnny Ho’s “thinking” days—too funny …

“I just finished one of my thinking days last month. I filled a white board with my assessment of the external market and how we were doing against our priorities for the first six months of this year. As frequently happens, once I had written everything out in one place, I found it useful to step back and look at things from a holistic perspective. I emerged with new insights and with greater clarity about what’s most important. To remind myself of these insights, I wrote them out, as I always do, into my personal priorities file and now carry this file with me everywhere I go. …

“Last year, for example, when I took an extended vacation as part of our company’s sabbatical program, I had some pretty transformational thoughts about reconnecting to our company’s purpose and setting ourselves on a good-to-great journey. I came back to work not just rested, but with more clarity and more conviction than I’ve had in years. This allowed me to share these transformational thoughts with our entire company which has re-energized our team and made me a more effective leader.”
—John Donahoe, LinkedIn (15 Jul 2013)

At the least, Carl Icahn should easily be able to expose this turkey for what he is, an arrogant fool …

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: DonC This user has validated their user name.
Web Site

Tue Feb 25 17:00:17 2014

Anything that results in firing some of the knuckleheads that run Ebay can't be too bad.  

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

This user has validated their user name. by: Philip Cohen
Web Site

Tue Feb 25 17:13:11 2014

“Donahoe also said PayPal had the best risk models in the world. "We have 2-, 3- 4-thousand people working on risk. Also, when you're dealing with people's money, people care about if something happens to their money. And if you're guaranteeing it, you've gotta be able to be contactable. We've got 3-, 4- 5-thousand people doing customer support at PayPal.”
http://www.ecommercebytes.com/cab/abn/y14/m02/i25/s03

Johnny Ho can’t even make up his mind how many people he has working on “PreyPal” customer support or “risk management” (what risk management?). Try ringing the support telephone number on the back of your real bank credit card and see if it takes you any longer than a few seconds to get to speak to a (non-Philippine) support person, and then try the same with “PreyPal”—laughable …

“PayPal had the best risk models in the world”—Who does he think he is kidding?

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

This user has validated their user name. by: Puck

Tue Feb 25 17:40:39 2014

"Anything that results in firing some of the knuckleheads that run Ebay can't be too bad"

My thoughts, exactly.

Historically, when a people are treated harshly by a despot and another despot shows up at the border to wage war, there is no shortage of outraged indigenous folks willing to take up arms with the new despot against the old one.

And this is done knowing full well that their plights may not be improved.

It's frustration and rage being given a natural outlet.

Many eBay sellers are at a point they'll settle for certain peoples' blood, metaphorically speaking, of course.

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: brokentoys19 This user has validated their user name.

Tue Feb 25 18:12:29 2014

Must see video!

Billionaire Investor Icahn: eBay Conflict Is 'B.S.'

http://youtu.be/wX5DjDeor3A

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: Xander This user has validated their user name.

Tue Feb 25 20:39:16 2014

Interesting how in the video, Carl claims no one wants to work for/with Donahoe. Another example as to why ebay is so ''rinky dink''- just too many talentless employees throughout.

The HO has got to go!

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

This user has validated their user name. by: Puck

Tue Feb 25 20:49:15 2014

In video, "CEO asleep at the switch..."

Rip Van Donahoe.

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: used2luv2sell This user has validated their user name.

Tue Feb 25 21:24:36 2014

I just want someone to wipe that smug look off JD's face!  It might make a good dart board though...

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: Mr. Me This user has validated their user name.

Tue Feb 25 22:17:31 2014

may both paypal and ebay crash and burn, hopefully an ethical auction site / marketplace will take up the 'slack" ..... but let it last a bit......it is fun to think of JD with his panties in a bunch......

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: pace306 This user has validated their user name.

Tue Feb 25 23:46:27 2014

Its only my opinion, but without eBay force feeding Paypal customers - its out of business in a week.

Where will their business come from? Home Depot? Samsung?

eBay HANDS them most of their customers/business, and worse uses Paypal (playing good cop/bad cop) to do its dirty work and steal from sellers.

You can bet your bottom dollar that eBay will never allow Apple payments, or Amazon Payments - just like they didnt allow Google Checkout.

Since eBay isnt in the business itself directly (it is in the ecommerce feild if you count its ownership of GSI) why should they care what payment processer a seller uses? Why cant mid sized sellers do Visa or MC directly with thier own bank?

Why? because then eBay cant steal from you , and it wont have the ability to let Paypal steal from you OR thier snowflake buyers.

If they are "just a venue" then they shold be neutral on payment methods - but they arent.

For now, Im just enjoying the "disruptions" that Icahn is doing to JD. He thought they were great when he did them to us - Im just laughing reading his bufoonery answers on the eBAy corporate blog ... they dont even answer Icahns questions directly !

(maybe he needs more thining days?)

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: rooftop This user has validated their user name.

Wed Feb 26 05:10:51 2014

The only reason ,I purchase items on eBay is because I have money in my Paypal account from items that I have sold on Ebay .
In 2008 , the competition regulator in Australia called the ACCC would not give Ebay  the right to  have Paypal as the sole means of payment for buyers so a number of payment methods were approved including Paymate which very few people use now .
If will be very interesting to see if eBay accepts the new Visa and Mastercard payments systems that are in direct competition with Paypal .
If ebay doesn't allow sellers to accept them , I think Ebay will have another battle with the ACCC and I think their chances of winning is zero .
 

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: alfabarn This user has validated their user name.

Wed Feb 26 05:10:52 2014

Who owns the bulk of EBay stock? If it is private equity firms or ''wealth management'' firms I don't think a change of leadership will matter. Bleed it dry seems to be the wall street model. Whatever ''Ho'' they put in charge they take their orders from the board and majority stockholder groups. they will continue to bleed the sellers a penny at a time and continue to move the targets required for any discounted rates.  

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: PowerSeller2007 This user has validated their user name.

Wed Feb 26 05:36:41 2014

JD loves disruptions.  Icahn is giving it to him.   Can JD handle the truth?  

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: PowerSeller2007 This user has validated their user name.

Wed Feb 26 05:51:05 2014

Once Paypal is separated, it should moved out of California... far far away from Greedbay...  Make sure JD don't ever put his hands into the cookie jar.

Perminate Link for eBay Defends Board Members Against Carl Icahn's Attack   eBay Defends Board Members Against Carl Icahn's Attack

by: brokentoys19 This user has validated their user name.

Wed Feb 26 10:46:04 2014

Popcorn, anyone?

https://twitter.com/Carl_C_Icahn/status/438678654298501
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