Back in the middle of the last decade, eBay, the massive auction site, was in trouble.
Mike Nudelman/Business Insider
Between 2005 and 2007, its stock price was cut in half and its market cap shrank by $30 billion.
In October 2007, eBay admitted that Skype, a company it had acquired for $2.5 billion two years earlier, was actually worth less than half of that.
During the third quarter of 2007, eBay lost money for the first time as a public company.
Meanwhile, it was becoming clear that despite a massive early lead, eBay was going to miss out on China’s e-commerce boom. In the United States, Amazon was quickly becoming the “Everything Store,” thanks to smarter branding and superior technology.
After years of astonishing growth, the site was beginning to feel decidedly downmarket – a dotcom relic.
On March 31, 2008, eBay chief executive Meg Whitman retired after 10 years on the job.
Her hand-picked replacement was John Donahoe. Like Whitman, he was bland-looking, blond, and exceptionally reserved. Like Whitman, he had made his career at Bain Consulting. In an industry dominated by visionary technologists, Donahoe, in his blue shirts and khakis, seemed to be a manage-by-the-numbers corporate drone.
Investors were not impressed with the hire.
From a high of $58 per share on Dec. 29, 2004, eBay’s stock eventually sank to barely more than $10 in 2009 — an 80% decline.
In 2010, eBay stock recovered some, but then it flattened out and stayed that way for all of 2011.
As the year ended, the company’s market cap was half what it was only a few years before.
How would Donahoe ever turn eBay around?
Read more: http://www.businessinsider.com/explaining-ebays-turnaround-2014-2#ixzz2ucMX1wHo