UPDATE 1-Head of eBay's PayPal unit steps down to join Facebook

Mon Jun 9, 2014 5:26pm EDT

(Adds executive comment, background on PayPal and Facebook messaging apps)

By Deepa Seetharaman and Alexei Oreskovic

SAN FRANCISCO, June 9 (Reuters) - David Marcus, who has led eBay Inc's fast-growing payments unit PayPal for the past two years, will step down this month to run Facebook Inc's messaging products, the companies announced on Monday.

EBay shares fell a little more than 2 percent in trading after hours. Under Marcus, PayPal has moved more aggressively into the physical world by developing a mobile wallet for consumers as well as point-of-sale systems for retailers.

The move marks Facebook's latest effort to bolster its private messaging features as it faces competition from a new crop of popular mobile messaging services such as Snapchat and Line. In February, Facebook stunned observers by announcing plans to acquire messaging service WhatsApp for $19 billion.

In the newly created role of Vice President of Messaging Products, Marcus will oversee the Messenger service within Facebook's social network as well as the free Messenger mobile app, said Facebook spokeswoman Vanessa Chan. Roughly 12 billion messages are sent every day on Facebook, and the Messenger app has more than 200 million users, according to the company.

"I'm looking forward to getting my hands dirty again attempting to build something new and meaningful at scale," Marcus said in a post on his LinkedIn page on Monday.

The move comes as PayPal, which has 148 million active users, faces tougher global competition from Amazon.com Inc, which launched a recurring payments program earlier on Monday, as well as Chinese e-commerce giant Alibaba Group Holdings Ltd, which is going public later this year.

In a blog post, eBay Chief Executive John Donahoe said Marcus was leaving behind a strong leadership team and PayPal was on track to meet its outlook for 2015. (Reporting by Deepa Seetharaman; Editing by Marguerita Choy)

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