Expedia confirmed that its CEO Dara Khosrowshahi has been offered the top post at ride-hailing giant Uber.
Expedia disclosed an internal message in an SEC filing Monday morning, in which Expedia Chairman Barry Diller wrote that “Nothing has been yet finalized, but having extensively discussed this with Dara I believe it is his intention to accept.”
Diller added that he has advised Khosrowshahi not to comment on the situation until everything is resolved.
Expedia stock is down about 4 percent on the news of Khosrowshahi’s potential departure.
News of Khosrowshahi’s selection came out Sunday evening in reports from The New York Times and Recode. During his 12-year tenure as CEO of Expedia, Khosrowshahi has overseen a revitalization and dramatic expansion of the business, which began more than 21 years ago as a small Microsoft division.
Shares of Expedia are up more than 34 percent over the past year, and the company topped $8.7 billion in revenue in 2016, up from $6.7 billion the year before. The company posted $2.6 billion in revenue in the second quarter, up 18 percent, boosted by strong results from its Hotels.com and HomeAway operations.
Despite his success at Expedia, Khosrowshahi is a surprising selection as Uber CEO. Names floated during the process included Hewlett-Packard Enterprise CEO Meg Whitman and former General Electric CEO Jeffrey Immelt, who reportedly withdrew from consideration.
Even though it is the most valuable startup in the world, Uber finds itself in a tough position. Its reputation was crippled by a series of scandals under Travis Kalanick, the previous Uber CEO. Kalanick left in June, and the San Francisco-based company has been without a CEO since. Several top execs have also left in recent months; the company is without a COO, CFO, or CMO.
In addition, Uber has hemorrhaged money over the years as it seeks to fend off a challenge from Lyft and deal with regulatory issues, such as the landmark law in Seattle that will allow Uber drivers to bargain collectively for better pay and benefits.
Seattle area angel investor Hadi Partovi, an early backer of Uber who is Khosrowshahi’s cousin, told GeekWire yesterday that Khosrowshahi is “an amazing tech leader” who will be able to handle the internal discord and manage the international regulatory battles that face Uber.
Khosrowshahi was once the highest paid CEO among S&P 500 companies, and he would likely be leaving millions in stock options on the table if he took the job as Uber CEO. Bloomberg claims that between replacement awards and Uber’s precarious position, it would cost at least $200 million to lure Khosrowshahi away from Expedia.
Here is the full message from Diller:
As you probably know by now, Dara Khosrowshahi has been asked to lead Uber. Nothing has been yet finalized, but having extensively discussed this with Dara I believe it is his intention to accept. I also know the struggle he has been having out of both his abiding enthusiasm for Expedia’s future as well as his loyalty to all of us. I know Dara would like to communicate now with all of you but I’ve asked him not to until this is fully resolved. If Dara does leave us, it will be to my great regret but also my blessing – he’s devoted 12 great years to building this Company and if this is what he wants for his next adventure it will be with my best wishes. I say that because he deserves nothing less and I say that also because he will leave behind a tremendously talented corps of executives…
We both will be back in touch very soon.
Developing story, more to come.