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EBay to Split Off PayPal as Mobile Payments Gain Ground

EBay Inc. is spinning off its PayPal division, throwing the business into direct competition with Apple Inc. and Google Inc. as consumers step up the use of smartphones and computers to pay for goods and services.

Activist shareholder Carl Icahn had pushed for a split earlier this year, only to be rebuffed by Chief Executive Officer John Donahoe, who said in March a separation was “not a good idea.” Since then, EBay’s board reviewed the company’s strategy and decided EBay and PayPal will be better off as two independent public companies, the San Jose, California-based company said in a statement yesterday.