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Friday, October 3, 2014

eBay to split PayPal into a separate business

eBay has announced plans to separate its PayPal e-commerce operation from its online auction and shopping business. PayPal was created around 15 years ago and launched on the stock market in 2002. It was acquired by eBay later that year.

In a recently-completed review, the board of eBay said separation would create a sharper strategic focus and would better position each business to capitalise on the growth opportunities offered by a changing competitive landscape. In addition, it noted that the benefits of the current relationship between eBay and PayPal would decline over time.

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John Donahoe, CEO and President of eBay Inc, said “eBay and PayPal are two great businesses with leading global positions in commerce and payments. For more than a decade eBay and PayPal have mutually benefited from being part of one company, creating substantial shareholder value. However, a thorough strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively. The industry landscape is changing, and each business faces different competitive opportunities and challenges. eBay and PayPal will be sharper and stronger, and more focused and competitive as leading, standalone companies in their respective markets.”

The split is expected to take place in the second half of next year. Afterwards, Devin Wenig, the current president of eBay Marketplaces, will become CEO of the new eBay company.

Meanwhile, Dan Schulman - who’d previously worked at American Express - has been appointed as the new President of PayPal. He’ll also become CEO of PayPal when it separates from eBay.

PayPal currently has more than 152 million active registered accounts. It processed $27 billion (around £18 billion) in mobile payments last year and expects to handle 1 billion mobile transactions in 2014. The eBay mobile app is installed on 200 million devices, generating $20 billion of transactions last year.

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Opinion Articles

Sponsor our coverage of Mobile World Congress 2014

Mark Bridge writes:

Would you like to be part of our Mobile World Congress coverage?

Mobile World Congress is Europe’s biggest mobile communications industry show. It runs from 24th - 27th February next year in Barcelona and is expected to welcome over 70,000 attendees and around 2,000 exhibitors.

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Ruthless logic is revolutionary: we talk smartphones and customers with Kazam

Interview with Chief Marketing Officer James Atkins

Mark Bridge writes:

Earlier this month, London-based smartphone company Kazam announced seven new Android handsets. That's pretty impressive... and is an even more noteworthy feat when you consider the company didn't even exist at the beginning of the year.

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Printed interactive Bluetooth-enabled books and posters are just around the corner

Mark Bridge writes:

Imagine books that could automatically link with your tablet as you touched the pages. Or posters that reacted to your fingertips and displayed the results on your smartphone. It seems this kind of Bluetooth-enabled interactivity is just around the corner, thanks to tiny low-power processors and a patented printing process that doesn’t require specialised equipment.

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Banking on good customer service?

How mobile technology is changing the banking sector

The future of customer service is to bridge the gap between the smart consumer with the smartphone and the bank holding his or her financial assets. Even though mobile applications are becoming increasingly powerful customer touch points, many banks are failing to leverage them in order to engage with consumers.

Mandip Shergill, Account Executive at Genesys, looks at how banks can maintain and strengthen the customer relationship in the mobile channel.

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Facebook is a mobile company – are you?

Ashley Gilmour writes:

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That’s right – of the social network’s $1.8 billion (£1.1 billion) generated in the third quarter of 2013, 49% of it was made up of mobile advertising revenue. Last year, the channel represented only 14%.

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