Too Early to Spinoff Paypal From eBay?

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March 19 (Bloomberg) -- Personal Capital CEO Bill Harris discusses the future of eBay and Paypal on Bloomberg Television's “Bloomberg Surveillance.” (Source: Bloomberg)

And then there is another side to the story.

Bill harris, honored to have you here.

How wrong is carl icahn?

I think he is wrong because there are tremendous synergies between ebay and paypal.

So much of paypal's business is on ebay.

Back in 1999 when we started, it was essentially a person-to-person payment system, but it was not.

It was 95% being able to buy things on ebay.

That is fine, but as mr.

Carl icahn writes -- do they have to be more responsible and start deploying more cash to shareholders?

Yes, i think that makes a lot of sense.

But you do not do that by breaking up the company's. they have too many things that are linked.

There has been a big technology push over at paypal.

They were very active last year, adding 58 products.

Rethinking mobile payments, simple fine transactions for small businesses.

Isn't this a sign that ebay is allowing paypal to grow organically and that's it is a good fit?


And they need to do this.

The move from desktop to mobile is a revolution that is sweeping the entire tech industry.

They have been slow to jump on that.

But i think they are doing that now.

We have to educate everybody, including me.

I look at paypal as nothing more than an easy way to do ebay.

It is more now, right?

You do not have to necessarily be involved with ebay.

I can get money to you on paypal.

I don't know that.

My bar tab?


[laughter] t-mobile is trying to do the same thing in the t-mobile network.

That is what the company is doing.

This is where it is going.

Two carl icahn's point, why is it that you cannot have separate companies, paypal, ebay, they agree to do business with one another and then each with its own valuation?

Paypal presumably more.

What is wrong with that logic?

Two major companies agreeing to do business together for the long term does not work.

Why not?

Joint ventures.

You ran paypal.

You created it because you needed a way to make transactions happen on ebay.

Why can't you have those two together that are linked?

Creating long-term cooperative ventures between two large institutions with their own financials and directives just is not a stable long-term formula.

Paypal has a tremendous opportunity to become the online payment system that really threatens to be the next-generation visa.


Pulling it apart from ebay, which is where they still get a large portion of their direct revenue, is not the right thing.

If carl icahn went to hbs and give a speech, would he get the respect in a lecture hall?

I don't think so.

Why not?

The biggest reason is that he is always talking about doing things in the interest of shareholders.

In fact, he is doing tings in the interest of his own pocket.

He is a shareholder.


But he is interested in his shareholdings, as opposed to the shareholdings of others.

I will go with that, but i don't understand why silicon valley has a different rulebook on use of cash.

They have to keep a huge amount, so does ford and gm.

You just said that carl icahn can jumpstart the idea that ebay and paypal employ more cash to shareholders.


It is a public good.

Across technology.

-- across technology, there is too much retention of cash.

Particularly, the old-line companies who were sitting there with billions of dollars of cash on their balance sheets who don't need them.

Those should be distributed.

What would you say to john donahoe, the ceo of ebay?

I would say, makes a business work.

That is the biggest way to fend off someone like carl icahn.

Is he there?


paypal is starting to become aggressive outside of ebay, but not enough.

Ebay itself is struggling.

Bill harris, former ceo of paypal and former ceo of intuit.

I will do it for report right now.

This text has been automatically generated. It may not be 100% accurate.


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