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eBay considering PayPal split?

BusinessNews
by Barclay Ballard, 22 Aug 2014News
eBay considering PayPal split?

EBay is considering a spin-off, or perhaps even a split from, its e-commerce partner, PayPal.

The Information reports that the company shared its plans with potential candidates for PayPal's chief executive officer, a position that has remained vacant since David Marcus left in June. Marcus has since taken a position as a Facebook executive.

Read more: eBay goes down for 10th time this year amid Internet blackouts

The news led to an increase of four per cent for eBay share prices.

If eBay do decide to create a PayPal spin-off, it would mark a dramatic change of direction for the firm. In the past, John Donahoe, eBay CEO, has blocked attempts by activist investor Carl Icahn to ditch the payments service, stating that PayPal was integral to eBay's business and vice versa.

"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," said Amanda Miller, an eBay spokeswoman.

Currently, it is unclear whether eBay has finalised plans to spin-off all or part of PayPal, and what structure that would take.

Back in April, Icahn pressed for a PayPal split, before eventually deciding that the timing was not right. However, some investors continue to push for the move, believing that an independent PayPal could attract online retailers wary of rival eBay.

Read more: Hacker discovers "license to print money" on PayPal

PayPal was launched in 1999 as an online money transfer system, before being acquired by eBay in 2002 for a reported $1.5 billion (£900 million).

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