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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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This user has validated their user name. by: LDS Brother

Tue Sep 30 16:31:24 2014

OH ALMOST FORGOT

$35,000 to $40,000 until 2008 and and ALL DOWNHILL to $10,000 a year now

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This user has validated their user name. by: LDS Brother

Tue Sep 30 16:34:13 2014

MARIE SAID: "There is that old saying better dealing with the devil you know than the one you don't."

I say: "There is that old saying better dealing with the devil you know than the DEVIN you don't."

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by: mindelec This user has validated their user name.

Tue Sep 30 16:44:18 2014

thank god, canwe take back the millions he made too?  how soon is he going to be out?

like marie my biggest concern is that wenig is not new to the company, he was raised with the same view as donahoe.  will he asctaully show a different "vision" or will he keep on the same destructive path?

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

Tue Sep 30 16:47:22 2014

Rememeber,
They are not actually "selling" pp at this point, they are simply splitting it off for profit (Bain-style).

Could they do an IPO on PP once it is spilt??

The Bain split-off of assets is beginning.
MH
PS: In with the new boss, same as the old boss.

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This user has validated their user name. by: Puck

Tue Sep 30 16:48:45 2014

How Will John Donahoe's Tenure at eBay Be Remembered?
With the same fondness as Attila the Hun and Typhoid Mary.

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This user has validated their user name. by: Puck

Tue Sep 30 16:53:39 2014

''Former CEO Meg Whitman professed that ''a monkey could drive this train'' when asked about leading eBay.''

Then she proceeded to appoint one as her successor.

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by: val2525 This user has validated their user name.

Tue Sep 30 17:13:59 2014

Donohoe's big thing was "disruptive innovation".  Too bad he never grasped the concept of "innovation".  He will, however, be remembered for the "disruptive" part.

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by: dkkdolls This user has validated their user name.
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Tue Sep 30 17:36:53 2014

David Steiner could not have said it better. I doubt if he will be missed much unless worse takes over with even less understanding of and appreciation for the small retailer. Good riddance.

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This user has validated their user name. by: Anonymous Annie

Tue Sep 30 17:43:57 2014

''The Donahoe Era was a disaster for small sellers.''

Well... that's pretty much all you needed to say. (Although, everything leading up to that was very well-written too, David.)

The only thing I'd add is that JD's actions and policies have FOREVER RUINED eBay. There's no recovery from the damage he caused. Individual things may change after his departure, bits-and-pieces may improve... but overall, the damage has been done and it's irreparable.

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by: Jbyron This user has validated their user name.

Tue Sep 30 17:44:45 2014

Bravo Mr. David Steiner!!!! Very well written and I could not agree more. Ebay took so much good will and invaluable word of mouth praise and turned it into pure hatred. It has to be the most hated company in America now. It has ruined the livelihoods of so many of its members.  

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by: dpetes This user has validated their user name.

Tue Sep 30 17:45:37 2014

Very well said David!!!!

Now if you will, Please do an article about Devin Wenig...

My gut feeling  tells me it will get worse for sellers, what's your feelings?  

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by: aim04744 This user has validated their user name.

Tue Sep 30 17:48:53 2014

He will be remembered as the man who ruined Ebay. Destroyed a multi-million dollar business. To many sellers fleeing now and to many other venues welcoming them in with open arms. Ebay is not the only fish in the sea any longer and has a horrible name. It will take a miracle to make it profitable.  

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by: Twomoons This user has validated their user name.

Tue Sep 30 18:13:33 2014

Well said.  Thank you for speaking the truth.  Hope this is picked up by media.  JD has made life difficult for small sellers on eBay.  Hope for the best and expect the worst with new leadership -- won't be disappointed.  

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by: tony bonn This user has validated their user name.
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Tue Sep 30 18:15:15 2014

I have never understood why no one has sued ebay on rico charges. the coercive use of paypal is anti-trust violation, racketeering, restraint of trade.

maybe the case was tried but I am unaware.

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by: RichieC This user has validated their user name.

Tue Sep 30 18:18:45 2014

The Destroyer of a once Great Sellers Venue, before they took over running your business!

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This user has validated their user name. by: Philip Cohen
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Tue Sep 30 18:25:33 2014

Great piece David. Could not have said it better. Only one thing I would disagree with: Johnny Ho had plenty of “vision” for eBay but it was all only ever in his own mind; his destroying of the traditional eBay Marketplace was sociopathic in the extreme, and his idea that he could replace it with an upmarket online “Westfield Mall” was always delusional …

The question then is, has the Ho’s influence really been curtailed? Regardless, Wenig is one of the Ho’s 70% of replacements in the eBay executive suite and is likely out of the same mould as the Ho. Will it be any better under Devin “Little”? Only time will tell, but I doubt it; I think that it is probably too late; too much damage has already been done …

The eBay executive suite—where the incompetent mingle with the disingenuous, the malevolent and the outright criminal, and the just plain stupid ... http://bit.ly/11F2eas

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by: Santini This user has validated their user name.

Tue Sep 30 18:27:10 2014

The longest 6 12+ years in history. BTW, eBay's stock rose 7.54% today, LOL.
As for JD's successor, I'm reminded of the Roman emperor Tiberius, who said of his successor, Caligula: “I am nurturing a viper for the Roman people, and educating a Phaethon for the entire world"

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This user has validated their user name. by: laurengrace

Tue Sep 30 18:37:17 2014

To Etsy: you need to read this article too. Having little regard what your customers want will lead to Etsy demise too. Although still much more profitable than ebay, If you ignore your customer base, this is what will happen.

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This user has validated their user name. by: LDS Brother

Tue Sep 30 19:01:22 2014

Let's not forget John Donahoe gave us his final ^^^F*#K U^^^  to us small sellers with his defect policy, and 180 day returns at Pay Pal while acting PP CEO

You are so right Mr. Steiner, he has always disregarded us small sellers

Nice Article Mr. Steiner - Thank you for writing it

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

Tue Sep 30 19:06:31 2014

Leavenworth.

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