EBay considering PayPal spinoff: report

Thu Aug 21, 2014 1:04pm EDT

An eBay logo is projected onto white boxes in this illustration picture taken in Warsaw, January 21, 2014.  REUTERS white RS/Kacper Pempel

An eBay logo is projected onto white boxes in this illustration picture taken in Warsaw, January 21, 2014.

Credit: Reuters white RS/Kacper Pempel

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(Reuters) - EBay Inc is considering a spinoff of PayPal, its fast-growing payments unit, as soon as next year, tech news website The Information reported, citing sources.

Shares of the online retailer jumped nearly 4 percent to $55.48 at midday.

EBay told potential candidates for the position of PayPal chief executive officer, a post that David Marcus vacated in June, about a possible spinoff of the payments unit, the website reported. Marcus is now a Facebook Inc executive.

A PayPal spinoff would mark an about-face for the company. EBay CEO John Donahoe has resisted demands by activist investor Carl Icahn to hive off the payments service, saying PayPal was integral to eBay's business - and vice versa - and a split would not make sense.

"The board will continue to assess all alternatives to create that long-term value and to enhance the growth and competitive positions of both eBay and PayPal. This position has not changed," eBay spokeswoman Amanda Miller said.

Whether eBay has decided to spin off all or part of PayPal, and what structure that could take, remained unclear, The Information reported.

Icahn eventually backed off from his demand in April, saying that while he supported a PayPal split in the near future, now was not the time. Some investors, however, feel an independent PayPal can grow by attracting online retailers wary of rival eBay.

(Reporting by Supantha Mukherjee and Edwin Chan; Editing by Rodney Joyce and Jeffrey Benkoe)

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Comments (5)
Daleville wrote:
Does this mean that eBay will stop trying to force people to use PayPal to pay for their purchases?

It seems like a conflict of interest to say that sellers can’t accept checks or money orders if they choose to and to insist that they use PayPal, which eBay owns.

Aug 21, 2014 3:27pm EDT  --  Report as abuse
goper0xBTC wrote:
eBay will be extinct within 5 years. openbazar
Paypal will be extinct within 3 years. ripple
Western Union will be extinct within 2 years. bitcoin

I am shifting funds out of ebay into Tesla, and solar panel manufacturers. Thats the proper long play.

I would get my money out of any types of payment processors, financial networks, etc. its going to be swift extinction once the tipping point is reached.

Think .. what the internet did to bell atlantic. overnight.
Thats what decentralized networks will do to financial networks.

yup

Aug 22, 2014 2:06pm EDT  --  Report as abuse
Anonymous14 wrote:
Anyone that would consider a split between Ebay and Pay Pal from their businesses would ruin it. Sure, they advertise their payment plan which also leads to Bill Me Later caused me several years ago to sign up and get the things I NEEDED and still DO at a much better price. They give a person time to pay off their purchases if they spend $200 with interest free purchases as long as you pay it off in time. I pay my needed expenses off way ahead of time anyway to boost my credit reports. So many businesses are accepting Pay Pal alongside their listed other user major charge cards. I’m VERY slow to add a new credit card to keep my FICO score climbing towards perfection. To cut off Ebay from Pay Pal would cause me to not shop there anymore. I’ve been an Ebay buying customer for a number of years. When more online and storefront businesses keep adding Pay Pal (Bill Me Later) as a method of payment, that says something about how much customers prefer, have asked for it, and love Pay Pal. WalMart has had it for a while. I’ll use Pay Pal/Bill Me Later instead of my WalMart card sent to me free when Montgomery Wards shut down our stores years ago. That’s why I stay with Best Buy with their promos with no interest. Care Credit is another one very popular with consumers for various needs, such as vet visits and paying for the larger bills interest free above $199, dentists, medical care, and everyday necessities is also on fire with the public. Don’t separate yourself EBAY from the golden calf of Pay Pal (Bill Me Later), or kiss your business goodbye!

Aug 23, 2014 1:34pm EDT  --  Report as abuse
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