eBay Foresees Revenue Drop as PayPal Split Looms

eBay Foresees Revenue Drop as PayPal Split Looms

eBay is projecting a dip in sales following PayPal’s planned departure from the parent company. And the lower revenues have investors worried; following the announcement of its 2016 projections, eBay saw its share price drop over four percent.

First announced last fall, PayPal’s split from eBay is poised to be finalized in the third quarter of this year. Since the announcement, PayPal has been fairly aggressive in trying to solidify its position in the growing mobile payments market. Just this month, the company announced a partnership that would enable in-store mPayments with thousands of merchants in Australia, as well as plans to expand its One Touch service beyond the US.

Meanwhile, eBay is losing one of its biggest earners. While the two companies will remain linked for another five years in some of their operations, eBay will essentially lose its best avenue into the burgeoning mPayment market. PayPal, meanwhile, faces a number of exciting new opportunities in this area as it strikes out on its own.

Source: Wall Street Journal