EBay to spin off PayPal next year
Leadership finally agrees with Icahn, following review of online payments market
EBay Inc yesterday announced it would allow its prize online payments operation PayPal to operate separately, in a huge U-turn by senior management, Reuters reported.
Chief executive John Donahoe had earlier this year resisted efforts by maverick investor Carl Icahn to split the payments unit from the parent enterprise. Following the end of Icahn's campaign in April, senior eBay executives were swayed by the results of an internal study of the payments market.
"We felt like a couple things were changing," Donahoe said. "Most notably, the pace of change in this competitive environment, and payments and commerce is accelerating and will continue to, over the next three to five years."
The spin-off is scheduled for the second half of 2015, after which Donahoe will step down as CEO and be replaced by Devin Wenig, current president of eBay marketplaces and former head of the markets division at Thomson Reuters.
The CEO of the independent PayPal is expected to be Dan Schulman, former head of American Express' online and mobile payment business.