“eBay and PayPal will be sharper and stronger, and more focused and competitive as leading, standalone companies in their respective markets,” Donahoe continued. The industry landscape is changing, and each business faces different competitive opportunities and challenges. 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. “For more than a decade eBay and PayPal have mutually benefited from being part of one company, creating substantial shareholder value. “eBay and PayPal are two great businesses with leading global positions in commerce and payments,” said eBay Inc. Creating two standalone businesses best positions eBay and PayPal to capitalize on their respective growth opportunities in the rapidly changing global commerce and payments landscape, and is the best path for creating sustainable shareholder value, the company said. PayPal handles one in every six dollars spent online today.EBay Inc. today said its Board of Directors, following a strategic review of the company’s growth strategies and structure, has approved a plan to separate the company’s eBay and PayPal businesses into independent publicly traded companies in 2015, subject to customary conditions. That represents a growth rate of 19% over the previous year. In 2013, PayPal processed $27 billion in mobile payments out of a total of $203 billion.ĮBay said PayPal has more than 152 million active registered accounts, with revenue over the last 12 months at $7.2 billion. The company, over the last three years, has increased its focus on building a larger presence on smartphones through mobile payments. The business has tinkered with ways for people to use PayPal for real-life transactions in addition to transferring funds online or through its mobile app. PayPal, meanwhile, has grown from an online payments business to one that aspires to become your mobile wallet. The company said eBay handled roughly $85 billion in gross merchandise volume, which represents 13% growth year over year. eBay has been building up its Enterprise business, which manages the online retail presence of other brands. eBay has 149 million active buyers on the site, and its Marketplaces unit generated $8.7 billion in revenue over the last 12 months, out of $9.9 billion in revenue for eBay as a whole. eBay has grown from a simple auction house for used goods to a full-fledged marketplace. The two businesses have increasingly moved in separate directions. “The industry landscape is changing, and each business faces different competitive opportunities and challenges.” “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,” Donahoe said in a statement. But eBay couldn’t realize any significant merger benefits beyond pushing traffic. The deal was initially pitched as a way for eBay to boost PayPal transactions by driving its auction participants toward the online payment service. The move marks the end of what has been seen as an awkward partnership since eBay acquired PayPal for $1.5 billion in 2002. The split is expected to happen in the H2 2015. Dan Schulman, president of the American Express Enterprise Growth Group, will serve as the new CEO of PayPal.Ĭurrent eBay CEO John Donahoe and CFO Bob Swan will help with the transition, but will no longer serve as executives at either of the companies. President, will become the new CEO of eBay. EBay, PayPal to split into separate companies in 2015
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