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eBay to lose half its revenue by spinning off PayPal

Discussion in 'Off Topic' started by emmy, Sep 30, 2014.

  1. emmy

    emmy Active Member

    After a 12-year relationship, eBay (EBAY) has decided to spin off payment processor, PayPal.

    Almost half of eBay's revenue will disappear once PayPal becomes its own publicly traded company in the middle of 2015.

    Hedge fund activist Carl Icahn has been fighting for this for about nine months, saying the separation will create value for investors. Icahn's stance is that separately both companies can focus purely on and highlight their own simplified businesses.

    "I think this is the best news for PayPal. We're at the beginning of the revolution in mobile payments, a revolution in payments in general," said Dan Costa, editor-in-chief at PCMag.com

    With Apple Pay, Google Wallet and other digital wallets popping up, PayPal needs to remain nimble and innovative. Currently, PayPal has 52 million active registered accounts and processes 9.3 million payments every day.

    "They were an early actor, they were one of the leaders in the space, but I think with eBay's management they haven't been really able to focus on innovation, so hopefully they could open that up," Costa said.

    Some analysts say by removing itself from eBay, PayPal could gain more business from rival e-commerce sites such as Amazon and Alibaba.

    On the eBay side, Costa doesn't think consumers will notice too much of a change with payments, however, consumers may see PayPal on a lot of more people's phones.

  2. emmy

    emmy Active Member

    It's time for Ebay to go down...without PayPal Ebay will be dead:)
    BirdOPrey5 likes this.
  3. RickM

    RickM Well-Known Member

    How so?!

    It survived (very well) before PayPal and Ebay joined forces, and given there's no half decent alternatives on the horizon, it'll continue to be the biggest auction site for years to come.

    If anything this is a big plus. Ebay can finally add new payment methods.
    emmy likes this.
  4. emmy

    emmy Active Member

    They'll but eBay gets paid two ways before - Making $$$ through commissions for using ONLY PayPal as your means of receiving payments on Ebay. Thus, Ebay takes commission for selling on the site and also takes commission for using PayPal as only means of payment on the site. Spinning off PayPal now will only give them one way of commission on Ebay.com, although PayPal will still provide income to Ebay through other means like Mobile payments etc
  5. emmy

    emmy Active Member

    Also, I think eBay and PayPal's day are close to over. Between eBay and PayPal, they ran that company like a dictatorship. There are complaints all over the web with PayPal holding money on eBay purchases or refunding purchases without the approval of the seller. I stopped using both. On a side not, companies like SQUARE could put PayPal out of business. I say good ridden to both PayPal and eBay.
  6. AdamD

    AdamD Well-Known Member

    I agree with the good riddance bit
    Got fedup with ebay and paypal a long time ago
    Always kept seeing how Ebay had record profits year on year, yet they kept finding excuses for putting the fees up
    Typical greedy corporation, sadly.
  7. Carlos

    Carlos Well-Known Member

    Actually, on the contrary: This just means that PayPal will be public on its own. EBay will still be a majority owner of it. More and more companies are doing this. Sony is currently considering this similar move with PlayStation, so is Microsoft (by spinning Xbox off into it's own division, and then eventually IPO.)
  8. DRE

    DRE Well-Known Member

    paypal sucks

    too many lame changes to my account after being spun off
  9. RickM

    RickM Well-Known Member

    They've not been spun off yet, and wont be for a long time yet. It's not a quick process to split a company in half.

    They have been having problems for the last week or two with payments being very slow at going through.

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