Paypal’s Seeks to Spinoff from eBay Inc (NASDAQ:EBAY), Due to Double Annual Revenue Growth

By the year 2015, PayPal will become a company that will be trading publicly and independently from eBay.

eBay Inc (NASDAQ:EBAY) is an online site that easily connects sellers with willing buyers. PayPal, which was acquired by eBay Inc (NASDAQ:EBAY) during the year 2002 for 1.3 billion dollars, has been a rapidly growing component. PayPal’s annual revenue growth is estimated at 19%, which is more than twice that of eBay Inc (NASDAQ:EBAY) who generates an annual income of $9.9n, which averages to be only a 10% annual increase in comparison.

Users of PayPal can easily, safely and quickly received and forward monies online. All transactions are backed by credit cards, prepaid accounts or linked to bank accounts. This service is currently available in more than 200 worldwide markets and their aim is to process more than a billion payments, via mobile devices, by the end of 2014.

Apple Inc. (NASDAQ:AAPL), one of the leaders in the mobile device industry provides huge competition to PayPal and other companies looking to enter the mobile payment sector.

In fact, just last month, Apple Inc. (NASDAQ:AAPL) made an announcement introducing their new digital wallet service that is referred to as Apple Pay.

Traditional credit card usage is becoming a thing of the past, especially since the recent security breaches of personal data that has attacked major retailers like Home Depot and Target.

Citibank recently made a prediction stating that the mobile payment industry will soar from $1 billion to more than $55 billion by the year 2017.

During the most recent fiscal quarter, PayPal has acquired more than four million new accounts.

John Donahoe, the President & CEO of eBay Inc (NASDAQ:EBAY) announced the split. After overseeing the separation of these two companies, Mr. Donahoe will be stepping down from his position and will have no further management authority over either of the companies. He may retain a seat on the board of directors for one, or both, of the companies.

According to John Donahoe, the split between eBay Inc (NASDAQ:EBAY) and PayPal has to happen because each company no longer benefits for the union. Mr. Donahoe further stated that each business is facing a different set of challenges and opportunities and they no longer serve to help each other.

An executive for the American Express Company (NYSE:AXP) will become the new PayPal president. Mr. Daniel Schulman will assume the role of CEO immediately after the separation is completed.

Devin Wenig, who is the current president and CEO of eBay Marketplace will step into the new role of Chief Executive Office of eBay Inc (NASDAQ:EBAY).

, a company that is based in San Jose, California, has said that this split is the best option for company growth and for increased shareholder value for both businesses.

eBay Inc (NASDAQ:EBAY) opened today at 56.60 and at 12:15 pm EDT, it is holding at 56.59. The 52 week outlook ranges from 48.06 to 59.70 with a market cap of 69.67B and an 83% ownership.