Ebay stock was on the rise yesterday following a report from subscription site The Information that the ecommerce company has been considering spinning off PayPal as the search for former President David Marcus' replacement gets underway. Marcus exited the company in June to be Facebook's VP of messaging products.
Keith Rabois, a partner with Khosla Ventures, a former PayPal executive and Square's former COO, told Bloomberg TV he thought it was a good idea, but if it were up to him, eBay would be rebranded altogether -- by changing its name to PayPal. "It's a really simple solution. You could do it in probably 24 hours. A lot less financial gimmicks involved, you don't have to hire investment bankers, and various other things, but you get all the benefit."
He went on to argue that PayPal, purchased by eBay 12 years ago, is still considered a subsidiary of the company internally, and that could be a going concern for anyone taking on Marcus's position. "I don’t think there is any way that long term the companies stay together…They've missed all the macro trends and innovation around Bitcoin, Stripe, Stellar, Square, because they still think of themselves as hostage to the eBay market."
Proponents of PayPal's independence believe that the company hasn't been able to live up to its potential as a major player in mobile-payments space, despite its consistent growth and its 150 million users around the world.
The issue came to the surface back in January, when investor Carl Icahn began agitating for PayPal to spin off from eBay through an IPO, a campaign that included an open letter to eBay shareholders that accused board members Marc Andreesseen and Scott Cook and CEO John Donahoe of conflicts of interest and negligent leadership, respectively. In April, Icahn withdrew his demand, the fight ending with the addition of Icahn's pick, David Dorman to the eBay board.