I just got a message saying the companies were parting ways by June. What do you guys know about this?
Yes they are and in part to avoid a free for all with the government deciding they are getting too big for their britches. Kind of like Wal-Mart trying to start their own banking system-Big Fail>
Let me Google that for you: http://lmgtfy.com/?q=EBay+and+Paypal+split+announcement September 30, 2014
I hope this means that PayPal is no longer more or less the mandatory means of payment for eBay lots. Some of my Buy-It-Now items I will demand a postal money order, and the buyer can take it or leave it. Anyone know the details on this particular issue?
Nobody knows. TYPICALLY in corporate divestiture or splits there are contractual relationships maintained between the companies. These often take two forms... 1. Providing services across companies. Prior to the split yYou have combined corporate facilities. You decide that part X has 40% of the space and you move all their people into 40% of the space, while part Y has the other 60%. But until you can build walls and create separate entrances, there's a sharing agreement for the real estate. At it's simplest, who pays which part of the cleaning service costs? You often find companies sharing finance operations, etc. 2. Preferred vendor arrangements. The split off services company agrees to buy it's widgets from the former parent company for some # of years.
eBay will be contractually obligated to use PayPal for a set amount for the first few years... basically it's to ensure PayPal has a continuing revenue stream and eBay just doesn't start something else and dump PayPal altogether. The possibility of a split started when Carl Icahn bought a bunch of eBay shares and started pushing for it.
We'll get a peek (but only a peek) when they file the S-1 (registration statement) for the new shares that will be issued. Some aspects of the relationship will be material information that will have to be disclosed. But we won't get hard #s, just generalities.
Some indications are already posted on their web site. This was certainly expected. It's the only reason they are splitting apart, to allow PayPal to grow more. I don't anticipate eBay is going to benefit greatly from this. 80% of transactions will still be funneled through PayPal. I read this somewhere else too. As I mentioned, eBay can't spin off PayPal and then immediately create another payment system. This is the most important aspect of the agreement from PayPal's perspective, in my opinion. It protects the new company. It's an amicable divorce. We'll stay friends for the kids. One of the key elements that is not stated here but will no doubt exist is that the APIs created to share data with PayPal will have to be made available to any other payment vendor that eBay starts working with. That ensures a level playing field. Source page: http://www.ebayinc.com/in_the_news/...stability-synergies-and-strategic-flexibility Infographic if you like pictures: https://separation.ebayinc.com/2015/04/highlights-operating-agreement/
Hmm. Sounds more amicable than my first divorce, and less so than my second, which I handled pro se. There is no problem a lawyer can't make infinitely worse.
Man oh man...I knew it...E-bay doesnt want to share its crown jewel with the rest of the world because it knows it will become bigger than E-bay itself. Money is NOT the root of evil. GREED is the root of all EVIL!!!
PayPal is already bigger than eBay, as of their last quarterly report. Source: http://www.forbes.com/sites/ryanmac/2015/04/22/ebay-earnings-2015-first-quarter/
