eBay today announced plans to separate its online auction business from its online payments business.
eBay will spin off PayPal into its own company, a move it expects to complete during the second half of 2015. eBay and PayPal have long worked hand-in-hand to let people make online purchases easily with just their email address. PayPal has expanded its scope beyond simple online transactions, but will need to push further into the mobile space to combat the likes of Apple Pay and Softcard.
“For more than a decade eBay and PayPal have mutually benefited from being part of one company, creating substantial shareholder value,” said eBay CEO John Donahoe. “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.”
Activist investor Carl Icahn long pushed for eBay and PayPal to separate, but eBay resisted the move until today. Devin Wenig, eBay Marketplace President, will be the new eBay’s CEO. eBay has tapped American Express executive Dan Schulman to run the new PayPal. He is joining PayPal immediately. Donahoe will oversee the separation of the two companies, and will then step aside.
