eBay Separating From PayPal Good or Bad;

eBay to split off PayPal business

From the section Business

The online auction site eBay is planning to split off its payments system PayPal into a separate company.
It expects to do that in the second half of 2015.

EBay’s chief executive John Donahoe said: “A thorough strategic review… shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively.”
PayPal’s revenues are growing at 19% a year, twice as quickly as eBay’s.
Its payment system is available in 203 markets worldwide and is expected to process 1 billion mobile payments this year.

PayPal’s annual revenue is $7.2bn (£4.5bn), while eBay’s is $9.9bn and is growing at 10% a year.
The move marks a reversal of strategy for the company.

Mr Donahoe, said: “The industry landscape is changing, and each business faces different competitive opportunities and challenges.”

Earlier this year the activist investor, Carl Icahn, began pressing for eBay to sell PayPal, a plan that was resisted by the eBay board. He stopped pushing after failing to gain enough support.
EBay’s shares were 11% ahead of the official start of trading in New York.

EBay bought PayPal in 2002 for $1.5bn (£905m), and the payments company is now the Silicon Valley firm’s fastest-growing business, with 143 million active users at the end of 2013, up 16% from a year earlier.

PayPal’s new president and chief executive will be the current American Express co-executive Dan Schulman.


About Sylvester

The world will always give you the opportunity to quit. In trying times, too many people quit trying. One of the most powerful success principles ever preach is: Never Give Up!
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