I generally think that it is a symptom that the management isn't able to manage the business. Not everyone has the skill set to mix a tech and commerce company into a living / breathing entity.
A CEO who wants to do a risky strategy will hire the biggest brand name possible to provide cover. "Nobody got fired for hiring McKinsey for advice" is similar to "Nobody got fired for buying IBM hardware". And in this case, the CEO can say, "Well, I hired the best to help me think it up" when it goes wrong.
In his defense, he was there for almost 10 years, no?
Speaking only for myself, I don't see a conflict of interest between us and PayPal. PayPal has embraced our APIs and approach to support as the future of how merchants will integrate with PayPal, and we've been able to leverage PayPal's consumer brand to build better products for our merchants.
I was initially very, very skeptical of our acquisition, but I have to admit it's turned out well. I don't think there is any risk of them underfunding or cannibalizing us.
hopefully that integration won't suffer.
But, as a current shareholder, you will still own PayPal and Ebay shares. The question is whether they are better together or better apart. There isn't any obvious synergy between the two anymore.
> Will be very interesting to see how they split the existing EBay shares for shareholder and at what price.
No, there is nothing interesting about that. Each shareholder get X shares of Ebay, Y shares of Paypal and Z dollars of cash. The price of the shares is set by the market. The values of X and Y are pretty much arbitrary.
PayPal will have to become five times larger to equal the profit that eBay spins off. Perhaps they can pull that off, but it's going to take a decade or longer.
Secondly, Icahn has been completely right about eBay. Andreessen functionally stole billions from eBay via a deal with one of the most egregious conflicts of interest we've seen in all of corporate America. Which, fine, it was a fuckup. Sometimes companies fuck up. But then, eBay keeps the same board of directors with the same crooks running the show. eBay needs an activist investor or else these are the guys who are going to pillage the company (even further). Not Icahn.
Though don't forget what is actually the far far bigger failure. When that idiot Meg Whitman acquired skype in 2005, she acquired skype but not the underlying tech (Joltid), then fucked the founders on an earnout. So there was tons of bad blood, and they were declining to relicense their p2p tech to skype. You can read all about it [2] and elsewhere. That, plus some other stupid stuff, made ebay give the founders 30% of the company back for $160m. I don't think Andreessen was on the board for the initial acquisition, but what idiocy.
It's hard to believe a reasonable technical person was involved in the initial acquisition. Where the hell was the board? The point is, it's hard to say ebay has had competent executive leadership or a board for a while.
[1] http://www.bloomberg.com/news/2014-03-03/ebay-andreessen-ref...
http://www.cnet.com/news/google-to-buy-slice-of-ebay-unlikel...
Like CrazyCatDog said, eBay is the textbook example of what happens when a tech company is run by consultants who don't understand the users.
Good luck with that. I've spent over $50K at Amazon over the last decade according to the data I dumped out of my orders. I'm a prime member. Amazon's site isn't perfect, but between the reviews, 2-day free shipping, 1 day at ~$5 extra, and product selection rivaled only by Walmart, I wouldn't look at Ebay unless it was something exotic (5 ton military truck for example).
"Bid" on something? No. Use Ebay's UX compared to Amazon's? Again, no thank you. Wait 5-7 days (at least) for something? Good luck Ebay!
However, even though I really freaking hate some aspects of the Amazon website I am a repeat customer. I don't have much money but the small amount of disposable income I do have goes to Amazon.
Competitors would need to have similar customer protection and customer service; and at least similar pricez or justification for higher prices.
"That’s no surprise since about 30 percent of PayPal’s business is still on eBay, although that is down from 50 percent only a few years ago. Donahoe said eBay projected it would get to 15 percent quickly." http://recode.net/2014/09/30/ebay-to-spin-off-paypal-with-ne...
That is why eBay's stock lurched upwards as soon as the news was announced. To someone looking to invest in an online marketplace, eBay is more important than PayPal by itself.
The landscape won't change in a few years, but in a decade, may look completely different.
Foreign investors still can't own more than the majority share in a Chinese company.
China is anti-West when it comes to supporting their domestic companies. They block out major competitors, such as Google or Facebook, and they make life very difficult for anyone that attempts to compete with their domestic companies.
The crap Alibaba pulled in stealing tens of billions in wealth from Yahoo by spinning off Alipay without proper compensation and forcing Yahoo to sell half its stake in Alibaba is par for the course in China.
Visa has a $134 billion market cap and is the payments juggernaut globally. I'd bet on them at least attempting to acquire PayPal.
To put Visa in perspective, their profit for 2013 was roughly 60% greater than Alibaba's.
I mean, Paypal is all very well for a small site where customers don't trust you with their card details or you're not doing enough volume to get a decent merchant account - but neither of those applies to Amazon.
Paypal will want a bigger cut than Amazon's existing credit card processors. So why would Amazon want to use Paypal?
Once Paypal and EBay are separate entities, Amazon now can reasonably enter into a merchant agreement with Paypal.
I don't buy into the Amazon/Paypal being competitors - while in theory this is true, Amazon has far more to gain by accepting paypal customers, than it has to lose by not winning the online payment business.
Hopefully, the industry will shift as more options become available and user-friendly. PayPal has the advantage of name recognition, but Amazon shares the same, and frankly, I personally regard Amazon more positively than PayPal. Hopefully, the industry continues its trend, now a quasi-oligopoly and eventually monopolistic competition.
Like others have mentioned, I too wonder how they are going to divvy shares.
EDIT: why have two green accounts posted the same non-idiomatic comment in a matter of minutes?
It's delusional to think people would want to buy stuff from ebay without the protections from Paypal or their credit card provider.
Current consumer protection advice is to walk away from any sale that uses things like Western Union or cash transfer - and this is likely to be extended to include Bitcoin as soon as anyone in the general public hears about Bitcoin.
You see, no payment technology is perfect. Credit cards have flaws. Bitcoin has flaws. But Bitcoin is better than credit cards for the average consumer. In the last 10 years:
- I have had to deal with 2 identity theft incidents that caused me major hassles and waste of time. Bitcoin would have prevented this because a Bitcoin transaction authorizes 1 and only 1 payment to a specific address. Bitcoin utilizes cryptography to guarantee that, not blind faith in the merchant not being compromised by hackers...
- on the other hand I have never had the need to issue a credit card chargeback, so this protection of credit cards was, although real, unneeded, useless to me.
