How many of you knew EBay and PayPal were both within the same company? Well not many knew. The news is that these two online giants are going to be separated from one another come 2015. This was announced on Tuesday by EBay. The e-commerce giant said Devin Wenig, currently president of eBay Marketplaces, will become CEO of eBay while Dan Schulman will become PayPal's chief executive officer in the second half of 2015, following the planned separation of the business.
In a press release by John Donahoe, the eBay president said,
"For more than a decade eBay and PayPal have mutually benefited from being part of one company, creating substantial shareholder value. However, a thorough strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively. The industry landscape is changing, and each business faces different competitive opportunities and challenges."
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The spinoff is expected to expected to be completed in 2015 after regulatory approvals.The e-commerce company is expected to report earnings on Oct. 15 after the U.S. markets close.
"As independent companies, eBay and PayPal will enjoy added flexibility to pursue new market and partnership opportunities,” Donahoe added. “And we are confident following a thorough assessment of the relationships between eBay and PayPal that operating agreements can maintain synergies going forward.”