eBay and PayPal to Split
eBay and PayPal are to split into two separate publicly traded companies next year.
The board of Directors arrived at this decision due to the large increase in competition eBay faces from other big rivals such as Amazon, Alibaba and Square.
The directors are reported to have said that splitting eBay into two distinct companies would enable each respective company to “capitalise on their respective growth opportunities in the rapidly changing global commerce and payments landscape.”
President and CEO of eBay John Donahoe stated: “a strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically.”
Despite the fact that eBay and PayPal have benefited from being one company for over a decade. The directors believe that each must now go its own way to remain competitive.
“The industry landscape is changing, and each business faces different competitive opportunities and challenges,” said John Donahoe.
The separation will be led by Donahoe and CFO Bob Swan with oversight from the board, though neither will hold an executive management position in either company. eBay’s new CEO will be Devin Wenig, who is currently president of eBay Marketplaces. Dan Schulman is to be President of PayPal and will also be responsible for determining the CEO there. Dan Schulman has an impressive portfolio including CEO at Virgin Mobile, President at AT&T and President of Enterprise Growth at American Express.
So what does the split mean for us mere mortals: the customers of eBay?
Well, the split will take up to twelve months so there will be no immediate effect on your account. Beyond that are the usual promises received from large corporations when there are big changes such as: “ eBay has always been more than a store. It is a community of people—buyers and sellers—connecting around the world. As we begin this next chapter of the eBay story, you have our commitment to make sure people like you remain at the heart of everything we do... ” Blah blah blah.