Ebay’s New Ceo

In conformance with your request, the following is an abstract and summary of the article by Catherine Holahan of Business Magazine. The article entitled “Ebay’s New Tough Love CEO” is about the new Chief Executive Officer John Donahoe take over for Meg Whitman. Ebay’s stock prices have fallen since 2005, and Donahoe has plans to make the company stable for the long haul. Donahoe’s plans may not help investors in the early stages.

The article explains that Ebay, who is an online auction giant, has hit a standstill with active users at 83 million for the past three quarters. New business is searching elsewhere to sell their products online. On January 23, Ebay’s stock fell 6%. The company reported significant gains in the forth quarter with net income gains of 53%, but most of that is coming from a newer and smaller business called Paypal. Paypal is an online payment operation allowing almost anyone to accept credit cards as a form of payment. The problem is with Ebay’s core auction and retail business, which accounts for most of the company’s revenue. The auction sector of Ebay is showing signs of weakness. In turn, the stock prices have taken a turn for the worst.

Donahoe, the new CEO is taking an approach to help revive Ebay. His main focus is to revive the auction sector by increasing Ebay’s active users. Ebay has only seen an increase of 4% in new products over the past year, and items selling at fixed prices have actually declined since 2006. Many sellers have started using other online resources to sell their products, such as Amazon, who stands behind their third party transactions. Donahoe has several plans in place to help increase the number of active users. First is cutting the cost to sellers on Ebay. He believes this will help promote more sales and increase the variety of products offered. He also has plans to introduce a loyalty program to sellers as an incentive to continue doing business on Ebay. Finally, he plans to protect buyers by coming down hard on fraudulent sellers, making Ebay a safer place for everyone.

I feel that Mr. Donahoe is starting off on the right foot. Meg Whitman has put 10 hard years into making