Uber’s new CEO could get more than $200 million to leave Expedia
By Tom Krisher
DETROIT — Expedia is confirming that CEO Dara Khosrowshahi has been offered the top job at ride-hailing company Uber.
Barry Diller, board chairman of the travel booking site, said in a note to employees Monday that he believes Khosrowshahi intends to take the new post, but Diller said nothing has been finalized.
The employee note was filed with the US Securities and Exchange Commission. It was the first official confirmation that Khosrowshahi has been offered the Uber job.
Reports Sunday said that Uber’s board decided on Khosrowshahi. Uber was to make an official statement later Monday after Khosrowshahi met with employees. Khosrowshahi would replace ousted CEO and cofounder Travis Kalanick and will be tasked with changing the company’s dysfunctional culture and leading it from money loser to turning a profit.
In the note, Diller wrote that he has discussed the Uber post with Khosrowshahi extensively, and that Khosrowshahi has been struggling with the decision out of loyalty to Expedia and its employees.
“I know Dara would like to communicate now with all of you but I’ve asked him not to until this is fully resolved,” Diller wrote.
Khosrowshahi has Diller’s blessing if he chooses to depart, and he would leave behind a talented group of executives, Diller wrote.
Uber’s fractured eight-member board voted to hire Khosrowshahi late Sunday, capping three days of presentations and discussions with candidates. One faction of the board led by Kalanick wanted former General Electric CEO Jeffrey Immelt while another led by Silicon Valley venture capital firm Benchmark wanted Hewlett Packard Enterprise CEO Meg Whitman.
Immelt withdrew Sunday and it was unclear if Whitman was ever really back in the race after multiple public statements disavowing interest.
Both factions were impressed with Khosrowshahi, who became the consensus candidate after he made a straightforward presentation that detailed his work and qualifications, said one person briefed on the matter. “He was very much no drama,” said the person, who did not want to be identified because the board meeting was private.
Khosrowshahi, 48, has worked at IAC/InterActiveCorp. for many years and led Expedia after its spinoff from IAC in August 2015. Before that he served as CEO of IAC Travel, where he helped with the initial expansion of its travel brands, according to a biography on the company website.
He also is a member of the Expedia board, as well as boards of Fanatics Inc. and The New York Times Co., and he has an engineering degree from Brown University.
Expedia’s loss is Uber’s gain, RBC Capital Markets analyst Mark Mahaney wrote Monday in a note to investors. Khosrowshahi was a “major factor” in IAC’s success during the past 12 years, Mahaney wrote, adding that Expedia’s share price has risen by a factor of eight and its bookings went from about $16 billion in 2005 to $72 billion last year.
Khosrowshahi checks important boxes for Uber, including 19 years of leadership at a company that uses an Internet platform to complete millions of transactions, just like Uber, said Morningstar senior analyst Dan Wasiolek in an interview. Expedia has been able to make money on those transactions, something that has eluded the fast-growing Uber thus far, he said. Moreover, Khosrowshahi has created a corporate culture that employees respect, as measured by third-party surveys, Wasiolek said.
“Given all the problems at Uber, the lack of any real controversy amongst employees at Expedia indicates that he may do a good job at personnel leadership,” Mahaney said in an interview.
Analysts say he also has had to deal with strong-willed board members at Expedia, and has handled investors in a public company well.
Uber’s dysfunctional culture includes rampant sexual harassment and allegations of deceit and corporate espionage. The company also is losing millions every quarter as it continues to expand and invest in self-driving cars.
The company currently is being run by a 14-person group of managers and is without multiple top executive positions that will be filled by Khosrowshahi.