Following a strategic review of the company’s growth strategies and structure, the Board of Directors of eBay Inc. has approved a plan to separate the company’s eBay and PayPal businesses into independent publicly traded companies in 2015.
“eBay and PayPal are two great businesses with leading global positions in commerce and payments,”
said eBay Inc. President and CEO John Donahoe.
“The industry landscape is changing, and each business faces different competitive opportunities and challenges. eBay and PayPal will be sharper and stronger, and more focused and competitive as leading, standalone companies in their respective markets. As independent companies, eBay and PayPal will enjoy added flexibility to pursue new market and partnership opportunities.
Support for digital money
It’s interesting to speculate on whether and how the “added flexibility to pursue new market and partnership opportunities” may be related to Bitcoin. Both companies have expressed growing support for Bitcoin, and last week PayPal partnered with three major Bitcoin exchanges. In June, Donahoe expressed a strong interest to integrate digital money:
“I think there’s no doubt digital currency is going to play an important role going forward, and at PayPal, we’re going to have to integrate digital currencies into our wallet.”
In 2011 eBay filed a patent which mentions Bitcoin, titled “System And Method For Managing Transactions In A Digital Marketplace,” that enables them to process transactions involving digital currencies, such as Bitcoin.
While it isn’t likely that Bitcoin was one of the main factors in the decision to split, it’s evident that the separation can only have a positive effect and speed up the implementation of Bitcoin payments. A smaller company is faster than a larger company, which permits agile decision making and experimenting with pilot projects in preparation of a major shift. Bitcoin, though it’s advancing fast toward mainstream adoption, could still be perceived as a potential image problem (Silk Bay anyone?). In this case, the separation from PayPal could provide plausible deniability to eBay.
Images from eBay and Shutterstock.