EBay’s Pain Is Yahoo!’s Gain, But Will It Matter?

Shares of Yahoo! (YHOO) closed down 51 cents, or 3%, at $15.78 after the company this morning announced the head of eBay’s (EBAY) PayPal payment division, Scott Thompson, will be Yahoo!’s new CEO. eBay shares fell $1.18, or almost 4%, to $30.16 on the news.

My colleague Dimitra DeFotis has written in today’s Barron’s Take that the decline in eBay shares is a chance to get a good deal on eBay stock.

The Street response is generally along the lines that Thompson is highly skilled, and that Yahoo!’s gain is eBay’s loss. But even so, few seem ready to predict Thompson can lead Yahoo! to the promised land — or at least out of the doldrums:

Gene Munster, Piper Jaffray: Reiterates an Overweight rating and a $19 price target on Yahoo! shares. “We believe the hire is a slight positive to Yahoo! as Thompson is likely to refocus employees who had lacked a permanent CEO for months; however, we note that Yahoo! has deteriorated meaningfully during the absence of a permanent CEO as evidenced by our daily ad checks (62% guaranteed in December vs. 91% last December) [�] We believe chances of an [Asia] asset sale are greater than 60%, which could result in some slight upside to current levels.”

Mayuresh Masurekar, Collins Stewart: Reiterates a Buy rating on shares of eBay and a $42 price target. “We believe losing Thompson is incrementally negative for eBay, and the transition may slow down PayPal’s growth rate in 2012.” Masurekar asserts, though, that the PayPal business continues to be strong. He cut his 2012 eBay EPS estimate by two cents to $2.34 per share to reflect what may be lower revenue at PayPal this year as it goes through its management transition, with his new estimate for PayPal transaction revenue coming in at $5.23 billion, down from a prior $5.31 billion estimate.

Doug Anmuth, JP Morgan: Reiterates a Neutral rating on both stocks. “Scott Thompson’s operations and technology background (CTO of PayPal prior to becoming PayPal CEO) hints at a renewed focus for Yahoo! around products, platforms, and advertising technology. In particular, we believe Yahoo! could focus more on programmatic selling of display and search campaigns using greater capabilities around real-time bidding, data mining, and personalization.” As for eBay, not so great: “We believe Scott�s departure is a material loss for eBay. He had a strong record of execution during his ~4 years as CEO of PayPal, more than doubling users and revenue during that period. Additionally, Scott�s departure comes just as PayPal looks to move into offline POS and mobile transactions. Scott�s departure suggests to us that a near-term PayPal spin[-off] is unlikely, though we would not rule out it happening over time and John Donahoe running that business.”

Mark Mahaney, Citigroup: Reiterates a Neutral rating on shares of Yahoo! “We believe Mr. Thompson has strong technical and organizational skills (like Carol Bartz) and should bring that rigor to Yahoo!. His track record at PayPal was excellent. However, we are somewhat concerned that he does not have strong media/advertising experience, which we believe Yahoo! needs, given the structural issues surrounding the company�s Search and Display initiatives. And by selecting Mr. Thompson, Yahoo! is explicitly pursuing a Growth strategy, whereas we believe a Value strategy might be more appropriate.”