PayPal will be guaranteed a reliable source of revenue after the payments service separates from eBay Inc later this year.
The businesses are drawing up a five-year operating agreement in preparation for the split, which was announced six months ago and is scheduled to be completed by the end of this year, eBay said in a statement on Thursday.
The names of initial board members after the separation were also announced.
Photo: Reuters
An independent PayPal will be freed up to forge alliances with retailers and other financial firms, as Google Inc and Apple Inc seek to turn their products into tools for digital payments. EBay’s marketplaces business, which is facing competition from Amazon.com Inc and Alibaba Group Holding Ltd (阿里巴巴), has seen revenue growth lagging behind PayPal, which it bought in 2002.
The goal of the contracts is to provide stability and flexibility for each company after the split, eBay chief executive officer John Donahoe said in an interview.
The plan was designed so that each enterprise could survive on its own, even if either company was acquired by a competitor, he said.
“The guiding principles are continuity for eBay customers — merchants and consumers — as well as synergies and strategic flexibility,” Donahoe said.
Donahoe is to chair PayPal’s board. EBay director Thomas Tierney is to become chairman of the online marketplace. EBay’s current chief financial officer, Bob Swan, is also to join the board of the marketplace business, the company said.
Pierre Omidyar, eBay’s founder, is to be a director of both companies after they separate. Additional board announcements will be made in the coming months, eBay said.
The agreement prevents eBay from forming a payments service and bars PayPal from developing its own online marketplace for physical goods, Donahoe said.
EBay could change its payments strategy if PayPal is bought by an eBay competitor, he said. In that event, eBay would have to give PayPal 15 to 21 months notice.
Donahoe declined to name potential acquirers.
The companies is to continue to share data to prevent fraud and provide customer service, he said.
EBay, based in San Jose, California, announced the split last year after activist investor Carl Icahn said PayPal was being held back by being put together with its parent’s slower-growing business.
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS