of eBay's PayPal unit steps down to join Facebook
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[June 10, 2014]
By Deepa Seetharaman and
SAN FRANCISCO (Reuters) -
David Marcus, who has led eBay Inc's fast-growing
payments unit PayPal for the past two years, will step
down this month to run Facebook Inc's messaging
products, the companies announced on Monday.
EBay shares fell a little more than 2 percent in trading after
hours. Under Marcus, PayPal has moved more aggressively into the
physical world by developing a mobile wallet for consumers as well
as point-of-sale systems for retailers.
The move marks Facebook's latest effort to bolster its private
messaging features as it faces competition from a new crop of
popular mobile messaging services such as Snapchat and Line. In
February, Facebook stunned observers by announcing plans to acquire
messaging service WhatsApp for $19 billion.
In the newly created role of vice president of messaging products,
Marcus will oversee the Messenger service within Facebook's social
network as well as the free Messenger mobile app, but not WhatsApp,
said Facebook spokeswoman Vanessa Chan.
Roughly 12 billion messages are sent every day on Facebook, and the
Messenger app has more than 200 million users, according to the
The move could also signal Facebook's interest in transforming its
messaging service into a platform for transactions, such as buying
concert tickets or making restaurant reservations, said Brian Blau,
an analyst with industry research firm Gartner.
"Clearly with a background in e-commerce and payments, itís natural
to think that heís going to bring a lot of that to Facebook,
presumably around messaging," said Blau.
While Facebook has struggled to make e-commerce a popular activity
on its core social networking website, messaging services are
increasingly adding transactional capabilities. WeChat, the mobile
messaging service owned by China's Tencent Holdings, began letting
users book taxis through the service earlier this year. Google Inc's
Gmail introduced a feature last year that lets users transfer money
to each other.
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"I'm looking forward to getting my hands dirty again attempting to
build something new and meaningful at scale," Marcus said in a post
on his LinkedIn page on Monday. Marcus said that he decided to join
Facebook after Chief Executive Officer Mark Zuckerberg "shared a
compelling vision about mobile messaging."
The move comes as PayPal, which has 148 million active users, faces
tougher global competition from Amazon.com Inc, which launched a
recurring payments program earlier on Monday, as well as Chinese
e-commerce giant Alibaba Group Holdings Ltd, which is going public
later this year.
In a blog post, eBay Chief Executive John Donahoe said Marcus was
leaving behind a strong leadership team and PayPal was on track to
meet its outlook for 2015.
(Reporting by Deepa Seetharaman; Editing by Marguerita Choy and Lisa
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