Ebay to split off PayPal business

The online auction site eBay is planning to split off it’s payments system PayPal into a separate company. It expects to do that in the second half of 2015. EBay’s chief executive John Donahoe said: “A thorough strategic review… shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively.”
PayPal’s revenues are growing at 19 per cent a year, twice as quickly as eBay’s.
PayPal’s annual revenue is $7.2bn, while eBay’s is $9.9bn and is growing at 10 per cent a year.
Earlier this year the activist investor, Carl Icahn, began pressing for eBay to sell PayPal, a plan that was resisted by the eBay board. He stopped pushing
after failing to gain enough support.
eBay bought PayPal in 2002 for $1.5bn (£905m), and the payments company is now the Silicon Valley firm’s fastest-growing business, with 143 million
active users at the end of 2013, up 16 per cent from a year earlier.

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