Meg Whitman's Decade At eBay

eBay's CEO Meg Whitman announced her retirement this week, effective later in the year.

How good a job did she do in her decade of leadership at the online auction house?

From the nearby Yahoo-sourced chart stretching back to 1999, pretty well, it would appear.

The slope of the blue curve depicting eBay's stock price easily has outstripped the S&P500. More than that, however, it also handily outperformed those of Dell, Microsoft and Yahoo.

Yes, Meg Whitman did a very capable job creating superior amounts of shareholder wealth over more than half of her tenure.

But this chart shows something else, too. I think it provides a snapshot of the reality of Schumpeterian dynamics.

First, look how eBay flattened almost exactly when Google took off as a public offering. eBay has not outperformed the market for the past three years. Google has taken off like a rocket.

But look more closely down near the S&P500's price curve. Yahoo had a brief, sharp rise in value creation from 1999-2001, then crumpled. It ended the time period about even with the S&P.

Microsoft and Dell actually fell below the S&P500, since 1999, in terms of stock price growth.

To me, this picture documents the natural comings and goings of technology companies. Microsoft was a giant in an earlier era, but declined as other computer-related and -based product categories became more important.

Dell led box manufacturing and distribution for a time. But it, too, fell behind as the source of technology-based shareholder value creation.

Instead, the source moved onto the web, driving Yahoo, the internet's first general-purpose information provider.

But, as I've written in many posts (see label 'Yahoo') concerning the firm, it was a mile wide and an inch deep, with no driving central objective.

While eBay was not a direct competitor, per se, the auction site tapped into a new, advanced form of value creation while Yahoo's became less unique.

Finally, as eBay's business model began to reach saturation, Google's search engine model ramped up and, through judicious inclusion of online advertising, shot up above all the one-time technology stars from a shareholder value creation perspective.

Seen in this tableaux, it's much easier to understand why I don't ever expect the older technology names to regain their prior abilities to consistently outperform the market.

Even Meg Whitman, capable as she was at eBay, only managed that feat for a few years.

Of course, the most interesting question isn't what Whitman's replacement will do for eBay- he's actually been dealt a fairly weak hand.

No, it's what and who might wrest technological sizzle, excitement and shareholder value creation capability from the search-ad-tied in online product space now dominated by Google.