John Donahoe talks about the future of eBay and PayPal
eBay Inc. is under a bit of pressure. Carl Icahn, activist investor, has been buying up stock and has called for eBay to spin off PayPal.
John Donahoe, eBay Inc. President and CEO is on the publicity offensive talking the prospect down. Rightly in Tamebay’s opinion.
In this video with Bloomberg Donahoe explains why and also looks at the future of eBay/PayPal with reference to cyptocurrencies such as Bitcoin.
As a small seller it is convenient to have eBay and Paypal as one entity.
I wonder, though, if Paypal split off whether it would make it easier for rivals to eBay to appear? Ebay would be just another online marketplace using the Paypal system. That might be good news for all of us sellers.
What the splitters want is paypal tp be able to operate separately from ebay. No be removed from it. There have been loads of innovations in omline payments like square, stripe etc to name just a few. They feel paypal is being left behind because its being held back by ebay, which in turn focues energy away from its core business and development of its infrastructure to compete with the newer services.
Paypal would be better placed if it was a standalone company.
And in turn ebay is being held back by Paypal. To tie ebay to a single payments service may well be behind the ebay issues we are seeing with basket, checkout, mobile payments and the confusion with buyer/seller protection. ebay should open its payment channels up to more offerings so that ebay is seen as an innovator rather than a follower. And in turn payment fees could come down and buyer/seller protection would be less muddied which is good for everybody including ebay.
If you watch the Stock Exchange and Investing in Stocks and Shares you will soon notice a number of trends. Firstly Companies go out and buy up numerous small companies because they can make money on them. Then a few years later they divest themselves of all or a large proportion of these Subsidiaries because they can make more money by selling them and concentrating their efforts on the core of the business.
No doubt Carl Icahn has done his calculations and has identified a short term profit from spinning off Paypal. He is probably not that interested in the long term because long before then he will have taken his profit liquidated his holdings in ebay and be off to some other Investment Opportunity elsewhere.
Certainly from my way of looking at things the long term benefits to ebay are with staying closely linked with Paypal.