eBay Inc. has announced the spin off of PayPal, which will become its own publicly traded company in 2015.
The news from the US overnight has revealed that eBay Inc. intends on splitting off PayPal Inc. as its own publicly traded entity in 2015.
The move will allow the two organisations to “capitalise on their respective growth opportunities in the rapidly changing global commerce and payments landscape,” eBay has said in a statement.
According to Internet Retailer, the announcement follows in the wake of pressure from eBay investor Carl Icahn to spin off the payments provider that led to a heated discussion earlier this year. General consensus is the move will allow both enterprises to be more nimble while pursuing their independent business objectives.
According to ChannelAdvisor CEO Scot Wingo, the move will also be good for online retailers, as it will allow eBay to more quickly respond to shifts within the e-commerce landscape.
“The marketplace can focus faster on e-commerce, which is a stated goal of theirs and they haven’t been achieving it,” he said.
Meanwhile, PayPal will also see the obvious benefit of opening itself to more partnerships – a necessary ability in the face of increased competition as a result of new payment providers and technologies, such as Apple Pay, appearing in the market.
“PayPal has to be able to work with Google if they build a marketplace and they can’t do that being 100 percent married to eBay,” Wingo added.
The split will enact the promotion of eBay President of Marketplaces Devin Wenig to CEO of the new eBay company, a move that is expected to be complete by the second half of 2015. Simultaneously, the current President of Enterprise Growth Group for American Express, Dan Schulman is expected to take the helm at PayPal as President and CEO.