Feeds

Thanks for suggesting eBay should flog PayPal. It's not happening, CEO tells Carl Icahn

Tat bazaar boss rejects activist investor's proposal

The Essential Guide to IT Transformation

eBay has rejected a call from activist investor Carl Icahn to spin off its PayPal division into a separate company.

John Donahoe, chief exec of the online marketplace, said that he had spoken with Icahn but the board and management believed that eBay and PayPal would do better if they stayed together.

"The synergies are clear," he said in a letter to employees. "PayPal has succeeded because it is a part of eBay, not in spite of it. eBay accelerates PayPal’s success, providing tens of millions of customers who then help PayPal grow off-eBay.

Donahue pointed out that it's not the first time the idea of spinning off the online payments firm had come up, and said the board does keep an eye on that option. But he told employees not to let Icahn's proposals "become a distraction".

"The best way we can create value is by executing our plans, delivering growth and serving our customers," he said.

"The closed loop global transaction data provided by eBay makes PayPal smarter,” he added, “enhancing its world-class risk capabilities. And eBay funds PayPal’s growth. This enables PayPal to invest aggressively in mobile, credit and acquisitions such as Braintree."

Analysts have suggested before that building a wall between eBay and PayPal would help other etailers to see the payments service as an option for their own shops. But eBay is likely to be reluctant to let the once-independent firm go, given that it contributes around 40 per cent of the company's overall revenue.

Icahn's proposal comes along with two nominations to eBay's board, who haven't been named yet. The company said that then nominees would be passed on to the relevant committee for consideration, but also hinted that it was quite happy with the current board. Icahn currently holds a 0.82 per cent stake in eBay.

"We would note that eBay has a world-class board of directors with directors who have significant experience in technology and financial services," the board said in a statement.

Despite Icahn's agitation, the company's full year results, released yesterday, show that both payments and marketplaces are going well for eBay. The online bazaar saw net revenue grow across its business by 14 per cent to $16bn in 2013 compared to the year before, with Payments rising 19 per cent and Marketplaces gaining 12 per cent.

Net income for the year was $2.8bn, a lift of nine per cent from 2012. ®

The Essential Guide to IT Transformation

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.