John McCain to Make eBay Inc. CEO Meg Whitman "King of America"
If you are still an undecided voter, think about this before you make up your mind... John McCain has said that he likes former eBay CEO and current highly paid consult, Meg Whitman, for Secretary of Treasury. Whitman became a billionaire while at the helm of eBay Inc. all the while maintaining one of the lowest ratings of any CEO (around 3-5% approval rating in a Forbes poll).
Her hand-picked replacement, John Donahoe, in his short tenure as CEO has upset the eBay userbase of both buyers and sellers with many changes envisioned by Whitman and while guided by her insights and direction. The price of eBay stock has dropped much more than other similar companies of late. The share price is now trading at less than half its 52 week high.
eBay just announced last week that they would be borrowing $1 billion from Bank of America (a recipient of the US Government's bailout funds) to buy Bill Me Later....borrowing money to buy consumer debt and a consumer financing company in a market under an incredible credit crunch, caused largely by individuals borrowing too much money en masse. Oh, and eBay is borrowing the money despite having over $3 billion in cash sitting in off-shore banks.
eBay's business model and lack of competition made it an assured success; Whitman simply sat at the steering wheel of the train as the company grew, throwing money at pet projects and investments and acquisitions that she felt would stimulate faster and further growth. But many of her decisions resulted in massive financial loss and upset the userbase. Skype was purchased for several billion dollars, and eBay two years later wrote off over a billion on the balance sheet. At current Skype is still bringing in only several hundred million dollars per year in revenue - not profit.
One of the cornerstones of Whitman's policy / plans was expansion into China and other Asian markets. A good idea, but unfortunately for eBay investors she did not have the foresight to do so until the markets already had their own business models. Whitman dumped hundreds of millions of dollars into eBay China only to later shut the site down. The results were similar in other Asian markets where Whitman tried to unseat the market leaders in online auctions and ecommerce. If failure wasn't bad enough, Whitman gave eBay in China another try, spending even more money and failing to succeed again.
Under her direction, eBay launched eBay Express, a site costing tens (if not hundreds) of millions of dollars over the course of its existence (yes, it failed also, and has been shut down). Spending so much money on a site that simply duplicated product listing already on eBay.com without having a way for sellers to actually add products was not only redundant, but just plain stupid. Express and the cost in time, money and human capital was loathed by eBay's userbase, yet Whitman continued to pour money into the project despite the widespread opposition by the site's users.
If you were horrified by the events of September 11th and if the thought of anyone benefitting financially from the deaths of 3000+ Americans that day and from the ~5000 soldiers killed in the war and 50,000+ wounded..... you might be equally horrified to know that directly following the attacks on the World Trade Center, Whitman launched the Auction for America benefit auction on eBay.com. Her goal, she said, was to prevent a decline in revenue and the associated drop in stock price by appealing to the patriotism of Americans. This was one of her successes, because by the beginning of December 2001, eBay stock hit a 52 week high....a price that is higher than the current stock price.
NPR has said that whoever is appointed as Secretary of Treasury will become "King of America." If you feel comfortable having Meg Whitman crowned "King of America" and having your financial well-being in her hands, then by all means, vote for John McCain. Or you might want to join eBay founder, Pierre Omidyar, in his support for Barack Obama.
Some things to ponder about Whitman before the election:
Whitman's prior experience consisted of working as a marketing director at Hasbro, overseeing the global marketing of the Mr. Potato Head and Playskool brands.
Whitman was NOT a McCain supporter in the primaries, she was active as a co-chair in the campaign of Mitt Romney.
Her only notable charitable donations involve gifting $30 million to her alma mater Princeton university.....while eBay founder Pierre Omidyar has donated hundreds of millions to fund microfinance around the world and created the Omidyar Network.
Whitman lost billions of dollars when she overpaid for Skype.
Whitman was instrumental in purchasing a stake in CraigsList, despite the remaining shareholders' objections....then proceeded to sue CraigsList.
eBay stole the patented technology that allowed the "Buy It Now" button to work properly (end a current auction with a purchase immediately), then fought to keep using it without paying the patent holder. Then continued to use it despite an order to cease, and eventually paid millions in a settlement....all under the direction of Whitman.
During her tenure at eBay, Whitman oversaw the #1 and #2 ranking sites for internet fraud, phishing and identity theft (eBay #1.....Paypal #2). BTW, that's bad, it means those sites have the most fraud, not the least.
Despite millions of dollars of users money being stolen by fraud via eBay & Paypal, Whitman refused to implement any sort of verification process for users of eBay...for fear it would effect the stock value negatively.
Whitman has a horrible record when it comes to investing. The only two acquisitions that have resulted in good profits were former competitors - Paypal and Stubhub. Both companies that were beating eBay (in Payments and ticket auctions) were bought to reduce competition.
Paypal, which Whitman headed while at eBay, is not an FDIC insured bank.
It's not a bank at all, and the only banking charter it has is on foreign soil.
About the author: Firemeg came out of retirement and took a break from proudly clinging to his guns and religion in Pennsylvania to write this article because there is more at stake in this election than hypothetically raising taxes on Joe the Plumber and his hypothetical income from his hypothetical business.