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Business eBay to Spin Off PayPal into a Separate Company


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eBay Inc., the online auction site in a reversal strategy is planning to split off its payments system PayPal into a separate company in the second half of 2015, a statement on its website says.

According to EBay's chief executive John Donahoe "a thorough strategic review... shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively."

eBay bought PayPal in 2002 for $1.5bn (£905m), and the payments company is now the Silicon Valley firm's fastest-growing business, with 143 million active users at the end of 2013, up 16% from a year earlier.

PayPal's revenues are growing at 19% a year, twice as quickly as eBay's.

PayPal's annual revenue is $7.2bn (£4.5bn), while eBay's is $9.9bn and is growing at 10% a year.

Earlier this year the activist investor, Carl Icahn, began pressing for eBay to sell PayPal, a plan that was resisted by the eBay board. He stopped pushing after failing to gain enough support.

#eBay #PayPal #BBC

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