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.




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Readers Comments

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

by: Patricia This user has validated their user name.

Mon Feb 24 11:19:47 2014

Icahn usually gets what he goes after.  Ebay's Keystone Kops may have finally met their match!  This will be fun to watch.

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.

Mon Feb 24 11:22:36 2014

eBay is following the typical sleazeball corporation, trying to suck the last penny off of all of its dealings..... it has nothing to do with its original mission ..... a democratic platform for INDIVIDUAL members to buy and sell to each-other. Every "improvement" goes further from this goal....

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.

Mon Feb 24 11:30:40 2014

Theres so many lies in JDs statement that he deserves an Academy Award for that performance.

Awww he doesnt like Icans "dsicruptions", yet they are ok when he destroys sellers business's when HE does it - shoes on the other foot now isnt it JD?

Ive never seen eBays books or thier "operating manual", yet I know being a seller what Ican just  found out himself "but the complete disregard for accountability at eBay is the most blatant we have ever seen" ... NO KIDDING.  ANd if you like your doctor/health insurance you can keep it!

Morons the whole way through ..... and worst - it makes morons for hitching our wagons to them!

Stupid stupid JD ....

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.

Mon Feb 24 11:31:11 2014

disruptions*  

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.

Mon Feb 24 12:03:48 2014

ebay WALL OF LIES need ROCK SLINGING...  

ebay reputation sucks and dirtier than muds.

Icahn need to bring in his board members to clear up the board who are obviously in great cahoots with JD.

Icahn could elevate his charges to criminal activity within ebay. He need to get his men to be insiders.

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

by: semper fi This user has validated their user name.

Mon Feb 24 12:13:28 2014

Gettem Carl, hold their feet to the fire like they do ours. Carl has found just the tip of this Iceberg.  

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

by: RCL This user has validated their user name.

Mon Feb 24 12:14:20 2014

This is a notable day for tortured grammar. eBay is going to have a wobbly year--good. I support that.

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

Mon Feb 24 12:44:36 2014

"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."

Brother, you said a mouthful...

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

Mon Feb 24 13:17:43 2014

"Icahn goes on to accuse Donahoe of maintaining a corrupt corporate culture."

"Icahn said that Donahoe “seems to be completely asleep or, even worse, either naive or willfully blind to these grave lapses of accountability.”

Dozing Donothole.

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.

Mon Feb 24 13:32:34 2014

Ebay certainly deserves a number of swift kicks to the shins and then some however the real question is would ebay’s board perform more favorably for its users with Carl Icahn’s men on the board? I suppose it couldn’t get any worse than it is right now for ebay users, especially sellers so I think this is a good thing.

I look forward to the day JD and company is removed from ebay.

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

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

Mon Feb 24 15:09:35 2014

Go get them Ican!

MH

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.

Mon Feb 24 15:23:23 2014

eBays retorts are beyond funny ..

"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."

REALLY? A turn around? from better to worse - THAT must be it!

I guess all the shareholdes that get dividends may have something to say about that .... the stock went from $50 to ... $54 ? And what did AMAZON do?

JD also ISNT respoected .. unless you are a janitor at eBay and he has the power to fire you. The REST if eBays board spends its time trying to legalize money out of its sellers byt doing nasty things.

Where else but in eBay would they tell you UP FRONT that they will take your money for listings but not show them if they dont feel like it? Or route traffic away from specific sellers towards others (its black & white in TWICE magazine), or set up artificial selling limits so that sellers can never reach thier true selling potential?  If thats respectful behavior then Al Capone was the pope.

"Icahn is not alone. PayPal cofounder Elon Musk agrees PayPal should be independent of eBay." SELLERS agree too. If its a seperate company then they cant FORCE sellers to use it and wont have the ability to make Paypal do its dirty work.

"Musk went on to say that PayPal “will get cut to pieces by Amazon payments or by other systems like Apple and by start-ups if it continues to be part of eBay" ... something Philip, RIC, MING and a whole host of others have said for years!

There's SO MUCH in the Forbes story about the crooked dealing in eBay board - its mind boggling.

GO ICAHN GO!

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.

Mon Feb 24 15:25:45 2014

From March 31, 2008 through our initial involvement on January 10, 2014, eBay stock returned 75% while Amazon,Visa and MasterCard MA +1.1% returned 462%, 271% and 285%, respectively. For all of 2013 through our initial involvement on January 10, 2014, Amazon, Visa and MasterCard returned 60%, 48%, and 73% respectively, while eBay stock returned only 2%.


JUST %2 - SOME TURN AROUND!

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

by: Eric Saeger This user has validated their user name.

Mon Feb 24 15:41:34 2014

This smells funny.  He says some guy told him "Paypal could be the greatest financial product ever," so eBay should divest it, yet he wouldn't have advised all the other divestitures because they "hurt the stockholders."
What a mess.  I really miss Pierre.

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

Mon Feb 24 17:06:22 2014

Notwithstanding that I have hereto before been a constant vociferous critic of eBay, this time I have to concur with Johnny Ho that eBay should not let go of “PreyPal”. As great a fool as he is, Johnny Ho knows that without its existing integrated relationship with the eBay marketplace, the value of the clunky “PreyPal”, as a stand-alone, would be reduced catastrophically (eBay actually generates ~30% of PayPal new users with no customer acquisition costs for PayPal and half of PayPal's profits come from transactions on eBay where “PreyPal” is well integrated); and, worse still, without “PreyPal”, the value of the eBay marketplace would be reduced by some 40% (“PreyPal” currently contributes ~42% of eBay’s profits) …

I hate to admit it, but for once Johnny Ho has got it right; Carl Icahn does not know what he is talking about and clearly has no understanding of the value of the inextricable and mutually supporting nature of the incestuous relationship between these two clunky, disingenuous, unscrupulous, commercial entities, and in particular, the precariousness of PayPal’s clunky business model …

Regardless, none of the above can outweigh the fact that Johnny Ho is otherwise a talentless, destructive, narcissistic sociopath and that under his direction eBay Inc. is proceeding down the toilet and is ultimately going to finish up at the sewage farm …

The fact is, notwithstanding the amount of disingenuous noise that constantly emanates from the eBay Dept of Spin, “PreyPal” is a clunky middleman riding precariously on the backs of the retail banks existing payments systems, and it has little more than one percent (~1.1%) of the world’s total payments business (and even then much of that is funded via MasterCard/Visa sources); the “bankcards”, MasterCard and Visa, have ~90% thereof between them and Amex has another ~8%, and both MasterCard and Visa have recently launched their own professional mobile/plastic POS/online digital wallets—The reality is that the clunky PreyPal’s “best before” date is fast approaching …

“Never ever hire an MBA; they will ruin your company.”—PayPal founder, Peter Thiel

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

Mon Feb 24 17:31:20 2014

@MH
"Go get them Icahn!"

A real life Attila the Hun sets his sights on a self-styled Dennis the Menace.

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

Mon Feb 24 18:23:09 2014

@rudestar,

"President and CEO John Donahoe is widely respected for his turnaround of eBay and leadership of the company over the past six years."

Yeah, too funny; then, what would you expect from such a disingenuous document created in the eBay Dept of Spin? ...

So, what does the “smart money” on Wall Street think about the progress of Johnny Ho’s delusion of converting eBay into the “Westfield Mall” of online shopping? Well, in late 2007, when the Ho was already effectively in control of eBay, both eBay’s and Amazon’s stock prices were ~$40; now, with the US stock market at an all time high, eBay is still only ~$56 and Amazon is ~$352.

Ah, but what about all the stock splits, you say? Well, there has not been a stock split by either Amazon or eBay since 2005. But let’s then be fair and look at the value of both these entities since their IPOs, taking into account their stock splits:

eBay: 3 x 2:1 and 1 x 3:1; ie 9 x $56; equates to a current sans-splits value of ~$504
Amazon: 2 x 2:1 and 1 x 3:1; ie 7 x $352; equates to a current sans-splits value of ~$2464

The fact is, Johnny Ho has been an disaster for just about all concerned: since the Ho arrived on the scene, eBay’s long-suffering long shareholders have, relatively speaking, been going backwards—at a quite steady rate of knots—notwithstanding the nonsense that constantly streams from the eBay Dept of Spin …

eBay / PayPal / Donahoe / Marcus: Dead Men Walking ...

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: Ming the Merciless

Mon Feb 24 18:36:35 2014

Don't be so sure that Icahn isn't simply just a other kind of sleazeball. I think he is based on his history.

To minimize the blatant lie on Scott Thompson's resume makes me wonder what other lies he would excuse and minimize if he gained much control of ebay, and how would this be an improvement over the lies ebay feeds us regularly?

While I think those with provable and and/or reproducible documentation of ebafia's "lack of accountability" (LOL  -- what a monumental euphemism!) should contact Icahn, I plan to remain neutral until Icahn demonstrates he would be more customer/seller friendly than The Ho and his current puppet BoD.

Which sleazeball is better for ebay sellers like ourselves?

That's what remains to be seen.

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

Mon Feb 24 18:42:56 2014

eBay’s long-suffering shareholders would appear to have good reason to complain about that sweet little Skype deal: a neat little round robin that took a lot of money off eBay’s shareholders and put it into the pockets of at least one insider; then, I don’t suppose it really matters as the shareholders have never had a dividend and don’t look like ever getting one while the chief headless turkey, Johnny Ho, and his gaggle of feathers friends are lining their nests …

“Never ever hire an MBA; they will ruin your company.”—PayPal founder, Peter Thiel

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

by: Eric Saeger This user has validated their user name.

Mon Feb 24 19:04:47 2014

I don't get what Icahn's angle is, I really don't.  Is the idea just to kill eBay altogether?  (One could ask the same about Donohoe, what with all the idiotic stuff he's pulled, but whatever.)

Tell me I'm wrong, but the only advantage Paypal has over your basic bank or whatnot is that it takes all four major credit cards and has a friendly name.  Couldn't someone at Visa or Amazon Payments whatever just offer a service called CardTaker or something and kick Paypal's arse, or is that oversimplifying?
Of course, it does look like there was some malfeasance by the eBay board.  
It's stupefying how badly eBay has strayed from their original idea, nowadays spending all its time sucking up to Wall Street dinks and accomplishing little else. I mean, the guy from Wikipedia still asks for donations instead of turning the thing into propaganda.com, you know?
Regardless, the real reasons behind this utterly bizarre little barking contest are only known to Icahn, Donohoe and maybe a few other greedy white guys.  Maybe Donohoe forgot to invite Icahn to the monthly unicorn roast or something.

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