
The Divorce of eBay and PayPal - doppp
http://mashable.com/2015/07/19/ebay-paypal-divorce/
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fmsf
As an insider (currently employed at eBay) I can say that there is a very
positive vibe going on. Everyone is feeling this is a fantastic achievement
and it allows both companies to flourish and compete much more effectively
with the current market. We'll still be playing our weekly football matches
with a mixture of PayPal and eBay people.

~~~
noja
As an outsider, I can't see how Paypal is holding eBay back - mind explaining?

~~~
Decade
I guess PayPal would hold back eBay because lots of people hate PayPal. When
eBay started, each seller would list their preferred payment method. Then eBay
bought PayPal and banned the others.

It's more secure. I hate PayPal, but I look for it because I'm wary of copying
my card information into yet another store's database to be found by hackers.
As a buyer, PayPal is only mildly annoying. After hearing about so many bad
experiences, though, I'm wary about selling with PayPal, and by extension
eBay.

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adventured
I still find it interesting that eBay went for this. Their platform and
business will be far weaker without the moat of PayPal around it. It would be
as if Microsoft spun off Office back in 2002.

Minus PayPal, they have zero growth and half the net income.

It leaves eBay extremely vulnerable to acquisition. And with zero growth,
their PE ratio will compress significantly. Probably from today's ~27 down to
15-18 range. eBay's auction platform got to ride on the growth halo of PayPal
to a higher multiple on its earnings. Alibaba should obviously acquire them to
use as a leverage point for the US market, including for the benefit of their
11 Main product.

The only upside I can see for eBay in this, is that maybe the smaller company
will become more dynamic and innovative. That's only if it can remain
independent, which is very unlikely with no growth. After a short while eBay
investors will get very frustrated, that'll push toward a business sale.

PayPal's future is obvious, they'll be acquired by one of the financial or
tech giants.

~~~
VLM
"PayPal's future is obvious, they'll be acquired by one of the financial or
tech giants."

WRT the tech giants, who will toss out their existing wallet first? Five to
twenty years ago, everyone who wanted a paypal-killer created their own. Far
more likely some financial giant will buy them, the only question there is a
retail bank (every checking account at XYZ bank is now a paypal account) or a
service provider (every XYZ credit card is now a paypal account). Also tech
giants are not so good at nickel and dimeing and adding crazy fees while
providing poor customer service, but thats all financial companies do, so the
fit is much better.

~~~
parenthesis
I'd have thought a credit card (i.e. old-school payments processing) company
would be the more likely suitor than a bank. After all, Visa and Mastercard
were IPO'd off by the banks that used to own them.

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bitcuration
The reasons are much simpler, albeit speculative. Paypal can be sold without
impact ebay, or vice versus. Or avoid potential anti-trust, such as Microsoft
in 90s. It's obvious ebay/paypal have huge monopoly business advantage than
separated.

A bonus benefit, without ebay auction obligation, paypal may innovate more
rapidly in the financial business.

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inthewoods
Where did this meme about Meg Whitman being bold and decisive come from?
Everything I've heard on her was that she arrived at the right time. A friend
of mine that worked at eBay at the time said something along the lines of "A
monkey could have made eBay work at the time."

Anyone else find her a compelling and effective CEO?

~~~
ashurbanipal
I don't think a monkey would have burned $2b on a non-sensical Skype purchase.
So she's got that going for her.

~~~
inthewoods
That's a great point - I forgot to include the negative value part of the
equation.

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inanutshellus
PayPal gets to expand (eBay's competitors have avoided using PayPal because of
its parent), and eBay gets a one-time mega-paycheck it can use to pivot,
acquire other companies, marketing-blitz, or otherwise rejuvenate the brand.
Sounds like a good plan to me.

~~~
parenthesis
Ebay is just giving Paypal shares to its shareholders—it isn't selling Paypal.
It is, however, sending _Paypal_ off with a big wad of cash.

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superkuh
Skype becomes a problem for the US government. eBay buys Skype for the US
government. eBay sells Skype. PayPal becomes a problem for the US government.
eBay buys PayPal for the US government. eBay sells PayPal.

~~~
kevin_thibedeau
They owned PayPal first. The Skype acquisition was very suspicious though. It
served no purpose to their core business despite their laughable attempt to
hype it as a tool for buyers and sellers to communicate. I suspect that it was
done to take the heat off pressuring them into bank regulation in return for
cross-correlating certain Skype accounts with PayPal registered bank accounts.

