PayPal chief to leave in exec shakeup

By : |July 7, 2006 0



NEW YORK  – EBay Inc. said the head of its PayPal payments unit, who was
once seen as a potential successor to Chief Executive Meg Whitman, will leave
the Web auctioneer in a surprise shake-up that reassigned executives at four
divisions.

Shares in eBay fell more than 3 per cent to their lowest level since late 2003,
including a 2005 stock split, on investor concerns over management changes just
as PayPal faces competition from Google Inc.’s new Checkout service.

"Most people are reacting the way I am, which is ‘I don’t remember this is
something (eBay) planned to do,’" said Martin Pyykkonen, analyst at Global Crown
Capital.

"If nothing has been shaken up for over a couple years … and there is a new
competitor, it all kinds of dovetails together," he said.

EBay swapped assignments held by several long-time company executives at PayPal,
Web phone service Skype, eBay’s international division and Shopping.com, but did
not bring in new managers from outside.

"Transferring leadership across those businesses allows us to better innovate
and collaborate throughout the company," CEO Whitman said in a statement.

PayPal President Jeff Jordan, previously identified by analysts as a possible
successor to Whitman, will leave the company in the fall after serving in the
role for nearly two years. Jordan first joined the company in 1999 and led eBay
North America until 2004.

EBay said Jordan planned to spend more time with his family. A company spokesman
would not immediately comment further on Jordan’s departure but noted eBay
regularly moves top management around "to take advantage of their skills".

Jordan will be succeeded by long-time eBay executive Rajiv Dutta, who was the
company’s chief financial officer before becoming president of Skype earlier
this year.

CHECKING OUT

PayPal in particular has been under scrutiny by analysts, who cast doubt on
future growth prospects as its U.S. market slows in pace and international
expansion meets with tougher customer adoption and local rivals.

That concern grew last month when Web search leader Google unveiled its Checkout
service that helps online merchants add a payment service to their Internet
sites.

Citigroup on Thursday cut its price target on eBay shares to $40 from a previous
$51, saying the company faced significantly higher risk over the long term due
to the Google Checkout.

EBay has put Google Checkout on a list of payment services not permitted on
eBay, meaning that sellers cannot market the new service on their site.

"There is no historical track record for Google Checkout," eBay spokesman Hani
Durzy said.

As part of the management changes at eBay, Skype vice president of products Alex
Kazim will become president of the unit, reporting to its chief executive and
founder Niklas Zennstrom.

Shopping.com CEO Lorrie Norrington was named president of eBay International,
replacing Matt Bannick who was tapped to lead the company’s corporate charity
efforts. Josh Silverman was named general manager at Shopping.com after serving
there as vice president of products.

EBay shares fell 95 cents to $27.40 in heavy trading on the Nasdaq after trading
as low as $27.26 earlier in the session.

No Comments so fars

Jump into a conversation

No Comments Yet!

You can be the one to start a conversation.