updated - October 31, 2020 Saturday EDT
Surprisingly, Paypal now to work separately from eBay right after the Apple Pay was introduced
The online auction website eBay is expected to spin off its long time payment partner Paypal to a separate entity next year, according to the online auction website's press release last week.
The unexpected strategic move happened right after the organization received calls from wealthy fund investor Carl Icahn and make his online payment business open for sale..
This came right after the Apple launched its new mobile payment scheme, the Apple Pay. This appears to be a stiff competitor to Alibaba and PayPal.
"The industry directive is restructuring and every entity is faced by various competitive opportunities and struggles," as eBay's chief executive official stated in his press release.
John Donahoe would not play an executive part in either of the office. The latest president of eBay, Devin Wenig, will be named as the chief executive of the new online auction site, on the other hand American Express executive Dan Schulman will be in charge of PayPal. He was the founding CEO of Virgin Mobile and was as well the chief executive of Priceline.com, a discount travel website.
Shares went high for eBay. PayPal handles majority of the online marketplace's earnings. Last January, pressured by Icahn, Donohoe declined a split.
"We together with our board strongly believes the idea way to value our shareholder is to retain partnership with PayPal and eBay. This will keep the opportunities coming. And when the separation might take place it will be at a wrong timing," as he explained to the analysts.
The argument ended last April by adding a new position to eBay's board.
"We are excited that eBay's board and management have been responsible on the separation-maybe they should have done it a bit later," according to Icahn. As per eMarketer's comment, the separation would give PayPal more freedom to compete, specially with Apple Pay and other new mobile payment service providers.
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