|Wed Jan 22 2014 16:46:06|
Should eBay Spin Off PayPal?
By: Ina Steiner
Carl Icahn wants eBay to spinoff PayPal into a separate company. The idea has been batted around before now, but thanks to Icahn's new proposal, eBay now has to deal with it publicly. (You can read what eBay had to say thusfar about the Icahn proposal in the fourth quarter earnings release.)
In fact, eBay said today it has explored in depth a spinoff or separation of PayPal, but the Board of Directors does not believe breaking up the company is the best way to maximize shareholder value.
"As part of eBay Inc., PayPal is able to leverage the company's technology capabilities, commerce platforms and relationships with retailers, brands and large merchants worldwide. Payment is part of commerce, and as part of eBay, PayPal drives commerce innovation in payments at global scale, creating value for consumers, merchants and shareholders."
But more interesting is what a separation would mean for online sellers (and buyers). Would PayPal continue to benefit from eBay's requirements around the use of PayPal on its marketplace? Would disputes be more difficult to resolve, or would the process become more transparent?
What would be the impact on your business if PayPal was spun off of eBay?
eBay spokesperson Ryan Moore said eBay CEO John Donahoe will talk about the board's take on Carl's proposal during the conference call coming up this afternoon - we'll be tuning in to learn more.
Here's a piece of a slide from the eBay earnings slideshow coming up shortly.