EBay will be spinning off its PayPal division to operate as an independent business, heeding calls from activist hedge fund manager Carl Icahn.
The move is viewed as beneficial for both companies. It may help eBay focus more on its core business, which may soon face more heat from the likes of Apple and Google.
PayPal was acquired by eBay in 2002 and has an estimated worth of $47 billion, according to Bloomberg.
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John Donahoe, currently the CEO of eBay and PayPal, will cede control to Dan Schulman, who will become PayPal’s new boss after joining from American Express. The split is to happen next year.
During an interview on Bloomberg in February, Donahoe fielded questions related to his ongoing struggle with Icahn. It was suggested that the emergence of digital currencies like Bitcoin can render PayPal useless and therefore, it should make more sense to spin off the unit. Donahoe then revealed PayPal’s prospective plans for Bitcoin.
But with all the Bitcoin adoption and energies thus far being relegated to PayPal and its subsidiary Braintree, the question becomes if any Bitcoin remains for eBay. It may be too early to tell. But the split may reshape the identities of the two companies down the road, and both strategic and ideological differences can emerge.