eBay has suggested that its shareholders and customers are best served by keeping payment processor PayPal and the company together. Further, the e-commerce giant
said it does not support activist investor Carl Icahn’s proposal to spin off PayPal and urged its shareholders to reject the proposal at their 2014 annual meeting.
In a letter to its shareholders, eBay noted that no other payments competitor has achieved PayPal’s success because “no other competitor has had a commerce platform like eBay.”
Citing reasons for PayPal and eBay to remain together, eBay noted that PayPal grew faster because of eBay and the company provided efficient capital for PayPal. Further, the company noted that data sharing led to more profitable growth, while commerce and payments were converging.
eBay said in its letter to shareholders, “Scalable, flexible, integrated digital payments and commerce platforms are competitive advantages in this dynamic environment. That’s why we believe eBay Inc. is well positioned to lead and innovate globally, drive long-term growth and deliver sustainable shareholder value.”
According to eBay, the eBay mobile app has been downloaded more than 186 million times since its launch. In the three-year period from 2010 to 2013, PayPal’s mobile payments volume increased 36 times. Today, eBay’s commerce volume is $22 billion, while PayPal recorded $27 billion in mobile commerce volume in 2013. eBay acquired PayPal for $1.5 billion in 2002.
eBay said, “As we compete in the $10 trillion commerce market, we believe that the opportunity for dramatic growth for eBay and its shareholders is larger than ever before. Some of the most important trends in commerce – including online/offline convergence, mobile, social, data, the app economy, evolving payment systems – align with eBay assets and position us well for the future.”