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Perhaps it was inevitable but hopefully it won't have nasty implications for
payments made outside of eBay.
ugh,
John
#388
http://www.theregister.co.uk/content/23/26080.html
"eBay is to buy Paypal, for $1.5bn in stock.
That's sorted then, or it will be when the deal closes at the end of the
year. PayPal conducted its IPO in February - four months ago. Surely the
point of that exercise was not to sell up so soon? All that expense could
have been avoided by going for the trade sale in the first place.
But the capital markets are dead, and PayPal needs eBay - It became the
world's biggest web micropayments platform on the back of an exclusive deal
with eBay. and 60 per cent of its turnover derives from this auction
marketplace. This ended earlier this year, and eBay hoovered up stock in
Billpoint, a rival payments provider.
eBay reckons it can save operational costs by combining the two companies -
earnings will be immediately accretive on a pro-forma basis (i.e. with the
merger costs stripped out). The company also becomes substantially bigger by
gaining control of the online payment system.
PayPal's Q2 turnover is expected to come in at $53-$54m, while eBay's Q2
revenues, announced today, were $266m. GAAP net income was $54.3m on sales
up 46 per cent on the same period last year. eBay attributes the growth to
the accelerating pace of US transactions.
eBay points to the market opportunities presented by the rest of PayPal's
business, but post-acquisition, PayPal's non-eBay turnover may well fall.
Its new owner intends to phase out business with gambling sites -
'regulatory uncertainty' is the rationale.
PayPal is a tad controversial - it's got jaw-dropping Ts&Cs and it's not
very friendly to people outside the US. Also, there are occasional foul-ups,
and several states want much closer scrutiny - if PayPal.looks like a bank
and it acts like a bank, then it should regulated like a bank."
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Message has 4 Replies:
 | | Re: eBay buys PayPal
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| (...) Let's hope not. It remains to be seen what this will actually mean for users, but here's a link to an article that doesn't sound too hopeful... (URL) the meantime, I just signed up for another online payment service run by CitiBank, (...) (22 years ago, 8-Jul-02, to lugnet.market.services)
| | | Re: eBay buys PayPal
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| Oh boy. I work for one of the banks that did the IPO. I'm not supposed to voice my true feelings about this whole thing. The numbers though: eBay just paid 24 times sales for a money-losing company. In other news, Warren Buffett got his first piece (...) (22 years ago, 9-Jul-02, to lugnet.market.services)
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