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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

Sat Oct 4 14:08:17 2014

AMEN Ming !!!!!

Positively an INCREDIBLY ACCURATE, TRUTHFUL Post !!!!!

Seriously Devin, eBay is dying, and it might be to late, and IF you do not do as Ming suggests, you are the FINAL CEO in the Final Chapter of a once great site, that will not be around much longer.

Mr. Wenig, IF you inflict the pain on us small sellers Donahoe did, this site will collapse entirely, don't be blind, eBay is the most hated site, and Donahoe the most Hated CEO on the planet !!!!!

Don't fall for the trap, that only  a few of the same ole same post the truth on this site, cause that is your mistake.

The NOISE is Hundreds of Thousands, if not MILLIONS of sellers !!!!

Not a forum, or an article I can't find anywhere on the world wide web where the NOISE is bashing Donahoe and what eBay has become !!!!!!

Mr. Wenig, Mr. Steiner is right us SMALL SELLERS are the most valuable asset eBay has !!!!!

You mess with us, we tell our friends, our family, everyone and anyone we can, RUN RUN RUN from eBay as a seller and a buyer !!!!!

And regardless of the PHONY numbers you put up, they have listened to THE NOISE !!!!!

There isn't buyers or sellers like there used to be ! Donahoe could not understand that if you screw a seller who is a good seller, and does not deserve to be screwed by cruel and unusual policy meant to destroy the truly honest sellers, we will give bad word of mouth to anyone and everyone !!!!

And it works !!!! It Built eBay, and it has all but DESTROYED eBay under Donahoes reign of terror !!!!

Ming is right, when he said SUICIDES ! I know I came close, as I could not win, I felt helpless and powerless, the CS reps did not care if I got screwed, nothing they could do, or cared to, it was a HELL OF AN UGLY ride since 2008 with Donahoe !!!!!

I have always been a good person, and the hate and dislike I felt for Donahoe is unprecedented, and truly against my beliefs and upbringing, but he EARNED IT !!!!

As he reaped MILLIONS I walked around sleepless at night starting 2008 Crying as I looked at my kids, my family and each release just kept putting that noose tighter and tighter around me physically, mentally, and spiritually and temporally with my decreased profits, while you kept rearing your mug telling everyone how good eBay was !!!!

Sorry but I hope a Higher Power shows Donahoe in HD detail someday the pain and suffering this man caused the good people, who let be exterminated as collateral damage !!!!

Yes I remember the days, when Meg Whitman asked us all to sell on eBay, then she double crossed us with Donahoe !!!!!

So I am truly skeptical in the LONG TERM you will be any better Mr. Wenig

Long Term is something those that ran eBay seem not to have their sight on

You make us Happy again Devin ( The Sellers ) And be fair to us when a LYING, POS Buyer is trying to rip us, we will spread the word again the eBay is a cool place to buy and sell !!!!!

But IF you continue on JD's path Ming is right eBay is DONE FOR !!!!!!

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by: Sorbet This user has validated their user name.

Sat Oct 4 22:50:25 2014

Among the many reparations necessary to pull eBay back from the grave, the Cassini spy engine has to go (search was its last priority).  Thank you, David for remembering to mention it.

But we also need an upfront admission and explanation of selling limits and hidden/throttled listings.

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by: Mimi This user has validated their user name.

Sat Oct 4 23:40:54 2014

Wow, I think that is the biggest response to something on Ecommerce Bytes. And I've been getting the newsletter for a super long time.

His legacy will be like Nixon's. ''I AM NOT A CROOK.''

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by: Bubbles This user has validated their user name.
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Sun Oct 5 00:10:48 2014

He was an absolute disaster!

Instead of increasing business he spent his whole tenure beating up on sellers so they leave. He has done nothing to increase business whatsover.

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This user has validated their user name. by: Philip Cohen
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Sun Oct 5 00:11:24 2014

Everyone in the eBay executive suite is demonstrably a crook, unless they are deaf, dumb and blind ... http://bit.ly/11F2eas

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by: gramophone-georg This user has validated their user name.

Sun Oct 5 02:34:57 2014

I just remember the joy and celebration when Meg left. I hope this joy and celebrating won't have the same result.

Let's not forget that Wenig is the guy who is telling the Chinese which collectibles to counterfeit and sell on eBay...

I mentioned to Jeff on the discussion boards that the collusion between eBay management and Chinese purveyors of junk fakes was a real black eye for eBay, and he seemed to think I was making it up. He told me that these were very, VERY serious accusations and that I had better reveal my source... I told him to talk to a fellow named Wenig that he ''might'' have heard of and linked to the article.

Anybody who thinks this is a great thing for small sellers better think twice.

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by: Alilbirdy2 This user has validated their user name.

Sun Oct 5 08:11:04 2014

Excellent Article !
I just wonder as I have since JD took over, why the board of directors didn't wake up to what JD was doing with the company before now.

When they saw he was driving sellers away by the truck loads, why didn't they do something then ?

I know I'm not the only one who saw  How JD was affecting the company.

Ebay was started with small sellers, and it grew and grew and grew. When JD took over it shrank and Shrank and Shrank.

It was a no brainer to see the effect JD was having on the company. I wonder how many companies out there when they see they have a lemon at the helm, let him continue souring everything he touches. Not many I would guess.

I do hope they will review every change JD made and Correct it. Put it back the way it was when it was Making progress and growing. There is nothing wrong in taking a step back if it will lead you onto a better path.

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by: ctblizzard This user has validated their user name.

Sun Oct 5 11:44:24 2014

I met JD and sat next to him at a conference for Voices (internal ebay focus group). Ill tell you my opinion. He is a decent guy who was able to deliver numbers and tighten the ship, but wasn't the right guy for Ebay. Ebay required a vision, not someone to come in fire top managers and squeak profits out of corners and squeezing its customers like this was a hedge fund deal. Ebay missed so many opportunities. They could have owned Craigs and Groupon in their envisioned local. They could have continued to enjoy an amazingly positive public perception of the company but they dismantled that over and over through the years and continue to make ridiculous tweaking changes while missing the bigger picture. They have had ineffective advertising for years, poor directional vision etc. HOWEVER , JD leaving gives me hope for a brighter future for Ebay. HE just wasn't the right guy for this company but I wish him well.

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by: gadget This user has validated their user name.

Sun Oct 5 12:15:35 2014

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.

-----

Yes, Meg hand-selected this monkey, so it began with her.

John Donahoe and his hairbrained ideas, seller-hostile environment are why I left eBay 6 years ago and never looked back. When they lost me as a seller, they lost me as a buyer, too.

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by: gadget This user has validated their user name.

Sun Oct 5 13:08:45 2014

for those of us whose physicians say are suffering from job related severe stress related diseases.

----

This may sound like hyperbole for those on the outside who didn't experience what an outrageously, needlessly stressful environment Whitman and then Donahoe created for sellers, but it's true.

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by: nsc This user has validated their user name.
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Sun Oct 5 17:22:12 2014

@ctblizzard, Yes, I agree with you that in the long run, Donahoe's term will be remembered as a series of missteps and blown opportunities.

Just think back to what eBay's image was in 2006, how it was THE online auction house, the first place people would search for any hard-to-find item. Think how Meg Whitman played up the community angle -- 'we are family' -- encouraged communications between users. eBay could have been the first social media site. But no, Donahoe's approach was not only committed to squeezing short term revenue without any long-term vision beyond imitating Amazon, he distrusted the free market of eBay. He wanted control. So he gradually turned eBay into a state-controlled semblance of a market, bit by bit, with the opportunities no longer available by merit, but going to the big names and the crony capitalists. Without ever warning the sellers or informing the buyers what the "new eBay" was supposed to be all about.

Political aside: Small wonder Donahoe is tight with Obama. Both are arrogant know-it-all credentialed mediocrities with a talent for flim-flam, who think they are fit to run everybody else's business, when they don't even know how to run their own.

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by: AC_in_Mich This user has validated their user name.

Sun Oct 5 19:53:39 2014

so,what exact changes would you people like?

Cassini gone - time ending soonest reinstated as default search

get rid of order defects - think of how many manhours are being spent on this

Mutual feedback with mandatory waiting period if either party wants to leave a negative.

Other payment options - come on, google wallet is untrustworthy?  Hell, google could buy ebay out of petty cash.

How about all the things we have forgotten? Remember when eBay stopped us from selling digital media?
Yeah, Amazon is doing SOO bad with digital sales

Put a seller in a position where his voice could be heard

And I do like the thought that ebay uppers need to sell.  When I owned a Domino's pizza shop before it got "Bained it was mandatory that you had to have ran a store for a year before - or be Sparky Anderson so you KNEW what you had to expect.

I could go on an on

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

Mon Oct 6 04:49:44 2014

I believe their plan was to remove as many sellers as possible before this breakup to decrease liability. Each seller who drops out is 1 less to worry about when the co. folds up.
Wenig is a puppet, installed just to not make it so obvious that it is all planned.
Ebay will be sliced off and piled up with unsustainable debt- JUST LIKE ALL OTHER BAIN COMPANIES- ebay may get a buyer, all the buyer will want is ebays registered USERS.
No matter what, to make this even possible, there are going to be cross-company user "agreements" between PP and ebay.
This leaves paypal as a dept-free tasty morsel to exploit or sell 100% debt free.

Bainification of US business.

FUNNY HOW Meg is announcing a very similar configuration over at Hewlett Packard- WHAT- very FISHY??

Mass Howler
Is anything REGULATED??

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by: nsc This user has validated their user name.
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Mon Oct 6 06:16:33 2014

The change I most want to see in eBay is a modicum of integrity in the way they do business. What Donahoe will be remembered for, long after the details have been forgotten, is that he was a sleazebag as well as a mediocrity.

Do you remember how he introduced ''diamond sellers'' on the sly, getting rid of the level playing field without telling the paying customers, the sellers? Ina did a recap in 2012
http://www.ecommercebytes.com/C/blog/blog.pl?/comments/2012/9/
1346725898.html/2/20

Not
only underhanded but unecessary. It's not as if sellers don't understand the concept of volume discounts; the larger ebay sellers had been asking for them for years. Ah, but Donahoe wanted to keep raking in the high fees from existing sellers while giving the good deals only to brand names. How many large, good sellers paying $$$ did he run off? And for what?    

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This user has validated their user name. by: Philip Cohen
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Mon Oct 6 15:41:05 2014

What will be Johnny Ho’s legacy?

He is proof positive of the American dream; that anyone, even an unscrupulous, narcissistic, sociopathic cretin, can make it to the top of a major publicly listed corporation, and, while the stockholders are paid no dividend and their investment is effectively being destroyed as he leads the corporation along its way to the palliative care unit, he can still manage to get himself paid tens of millions of dollars per year, much of it paid—laughably—as bonuses for “performance”. Does that not give you great confidence in the governance of U.S. corporations?

It will be interesting to see the Q3 revenue report on the 15th …

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: ebayisscrewed This user has validated their user name.

Mon Oct 6 22:40:14 2014

AMEN!  

John Donahoe's defect rate is the worst on eBay.  

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

Tue Oct 7 07:31:26 2014

Get this:

Marc Andreeson is on the ebay board AND the Hewlett-Packard board!

This guy is a PROBLEM, he is misusing his positions on these boards.

SEC- Marc Andreeson is NOT FIT for any boards- DO YOUR JOBS.

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This user has validated their user name. by: baconsdozen
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Wed Oct 8 03:44:10 2014

Same as in the UK then. Ruin a large company because you are simply useless and you get moved. Years ago you were sacked and kicked out.

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This user has validated their user name. by: Philip Cohen
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Thu Oct 9 20:36:28 2014

"… At first, I didn’t think eBay was right for me. But then I met eBay’s founder, Pierre Omidyar. And I asked Pierre how he defined success for eBay. He didn’t talk about growth rates, revenues or stock price. Pierre said: “John, it’s not about the numbers; it’s about how much impact we can have in people’s lives around the world.” I knew then that I had found my next opportunity to deeply link my work with a sense of purpose."—Johnny Ho, The 88th Stanford Graduate School of Business diploma ceremony, June 15, 2013

http://public-prod-acquia.gsb.stanford.edu/commencement/john-donah
oe-remarks


Somehow, Johnny Ho still managed to misunderstand Omidyar’s point …

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by: booklover27 This user has validated their user name.

Fri Oct 10 08:51:00 2014

Truth spoken!!! Albeit, Meg Whitman had set the pattern of Seller bashing and perpetrated the increasing of fees for sellers.  Donahoe managed to take it to a new level and finished off countless of small businesses.  While they're at it they need to get rid of the entire seller development team and their horrible programming and IT departments...

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