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 The company plans to spin off its payments division, PayPal, from
its core marketplace division in the second half of the year, making
two standalone publicly traded companies that some analysts say
could be worth more than the combined entity.
On Wednesday, eBay added that it will sell or prepare a public
offering of its eBay Enterprise unit, which the company bought for
$2.4 billion roughly four years ago.
The announced moves are intended to give each business the ability
to consider all their alternatives, including a sale, eBay Chief
Executive Officer John Donahoe said.
"No one knows what's going happen down the road," Donahoe said in an
interview on Wednesday, after eBay reported fourth-quarter earnings.
"But each business will have the flexibility they need to do what
they need to do to win."
The moves come as Wall Street analysts question how long eBay and
PayPal can withstand growing competition from online rivals such as
Amazon.com Inc, Google Inc and Alibaba Group Holding Ltd, as well as
retailers such as Wal-Mart Stores Inc which are investing in their
own e-commerce and payments platforms.
As part of the moves announced on Wednesday, eBay agreed to adopt a
number of corporate governance changes championed by activist
investor Carl Icahn that would limit PayPal board's ability to
prevent a takeover once it splits from eBay.
Any investor who owns 20 percent of PayPal will be able to call
special meetings of shareholders, Icahn said in a separate statement
that coincided with eBay's release. EBay also outlined plans to cut
7 percent of its workforce, or 2,400 positions, in the current
quarter.
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"I don't think that is the primary goal, but in general these moves
could make for a cleaner, or more attractive, merger or
acquisition," said Baird analyst Colin Sebastian, who has previously
said Google could be a suitor for eBay.
The eBay Marketplaces unit is now going after so-called "avid"
shoppers hungry for a bargain. Its enterprise division, which
advises companies on how to grow online, will strengthen its
relationships with top retailers and brands.
Potential buyers of eBay Enterprise include companies focused on
building ties with other businesses, such as Salesforce.com Inc, IBM
Corp, Demandware Inc, Adobe Systems Inc or startup Bigcommerce, some
experts said.
Salesforce declined to comment, while the other companies were not
immediately available for comment.
(Reporting by Deepa Seetharaman; Editing by Lisa Shumaker)
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