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Ebay to Separate eBay, Paypal Into Independent Companies in 2015
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EBay Chief Executive Donahoe Says PayPal Is Stronger as a Unit

EBay Inc. (EBAY) Chief Executive Officer John Donahoe said digital-payment provider PayPal is stronger as a unit of the online marketplace, as both benefit from the convergence of commerce and payments.

“We look at how EBay and PayPal can be most successful,” Donahoe said yesterday in an interview on Bloomberg Television. “I continue to believe the best way is together -- that EBay makes PayPal stronger. And it makes PayPal stronger by helping it grow faster. It provides more data and it provides a strong financial foundation that will ultimately make PayPal more successful as part of EBay than separate.”

EBay last month said activist investor Carl Icahn had proposed spinning off PayPal and was nominating two of his employees to join the board. In an interview on Bloomberg TV at the time, Icahn said EBay “hasn’t done as well as it should have” and called a separation of PayPal -- which is one of EBay’s faster-growing businesses -- a “no-brainer” that would boost value.

San Jose, California-based EBay isn’t working “at odds” with Icahn, Donahoe said in the interview yesterday.

EBay shares rose less than 1 percent to $55.15 at yesterday’s close in New York. They have gained 1.4 percent since the company disclosed Icahn’s proposals.

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Reed Stevenson at rstevenson15@bloomberg.net

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