eBay and Paypal Decide to Split Up

As you may know, Paypal is owned by eBay Inc. After 12 years of operating as a single company, eBay and PayPal have decided to split up into two separate companies. This news comes as a strategic decision made by the Board of Directors after evaluating their current positions in the market.

John Donahoe, CEO of eBay, said:  “eBay and PayPal will be sharper and stronger, and more focused and competitive as leading, standalone companies in their respective markets,” Donahoe continued. “As independent companies, eBay and PayPal will enjoy added flexibility to pursue new market and partnership opportunities.”

With pressure from the new Apple Pay and other payment processors, they felt it was the right time to make the move. As a single company, there was a conflict of interest and other companies knew it. As separate companies, they would be able to promote themselves as individual entities and could create partnerships on a broader level.

The separation will occur in 2015, subject to customary conditions.

I think it was a smart decision on their part. It opens up more doors for both companies, while making the industries a little more competitive. Competition is good for both consumers and the economy.

What do you think about this split?