PayPal Set To Be Separated From eBay by 2015

PayPal Set To Be Separated From eBay by 2015

PayPal is set to be separated from eBay by 2015, according to a recent announcement by the online auction house. PayPal will be led by Dan Schulman, current president of the Enterprise Growth Group of American Express, while Devin Wenig, president of eBay Marketplaces, will head eBay.

The split ends the partnership between the two companies following the acquisition of the online payment service by eBay in 2002 for $1.5 billion. The deal was initially planned to benefit both companies but eBay did not find any considerable advantages with the merger.

John Donahoe, present CEO of eBay, said a review by the board revealed that keeping the two companies together is not advantageous to either company due to the changes in the industry landscape.

The two companies have started to move in different directions as eBay has become a full-fledged marketplace while the online payment service has started to aspire to become a mobile wallet. The online auction service has around 149 million active users with the conventional marketplace unit produced around $8.67 billion of revenue in the last twelve months.

On the other hand, the online payment service started to consider methods in allowing individuals to use the service for daily transactions. Mobile payments processed by the company has reach $27 billion in 2013.

Revenues of the payment service have reached $7.2 billion in the last twelve months, which is higher by 19 percent compared to the same period last year. The entry of Schulman into the company brings along a good amount of experience in the mobile and payments world.

Donahoe revealed that Dan has a good record in leading complicated technology businesses at a scale along with encouraging sustainable growth and an understanding in innovating competitive advantage while providing compelling experiences for clients.

The separation of eBay and PayPal is expected to both companies to develop faster in their respective industries.

Posted by James Fried on Wednesday October 01 2014, 8:19 AM EST. Ref: CNET. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0