There’s no doubt in any one’s mind that PayPal is doing well. That’s why investors are happy at the prospect of seeing PayPal floated off as a separate company free to plough it’s own furrow in the payments industry unencumbered by eBay.
What’s not really been talked about however is the amount that eBay has invested in PayPal over the years. Putting aside the symbiotic growth which came about as every eBay buyer and seller were forced to open a PayPal account and offer it (actually pretty much forced to use it) for all eBay transactions, eBay has also spent vast sums of money acquiring businesses to help grow PayPal. Here’s just a few of the notable acquisitions:
eBay Acquisitions to grow PayPal |
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|---|---|---|
| Company | Date | Price |
| Fraud Sciences | 2008 | $169,000,000 |
| Bill Me Later | 2008 | $1,200,000,000 |
| Where | 2011 | $135,000,000 |
| Zong | 2011 | $240,000,000 |
| Braintree | 2013 | $800,000,000 |
Total Expenditure $2,544,000,000 |
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So it would appear that over the past five years eBay has spent well over two and a half billion dollars to grow PayPal to where it is today. That won’t be happening in the future – once PayPal is floated off mid 2015 as a separate company they’ll have to source their own acquisition and growth funds from investors, instead of dipping into the almost bottomless pit of eBay’s coffers.
The big question, assuming eBay carries on generating vast sums of money is what will they spend the next $2.5 billion on. Whatever the cash is spent on, instead of propping up payments, it’ll be invested in growing the marketplace business.
What would you like to see from eBay’s future investment in eBay?
5 Responses
1. Reliable infrastructure to provide the 21st century service people expect.
2. Create the seamless global marketplace people that buyers and sellers want on Ebay.
3. Offer wider range of payment options now that Paypal is no longer officially part of the Ebay set-up.
4. Better trained and more accessible customer service for buyers and sellers.
some interesting numbers there!
To me they seem hooked on following Amazon.
It will be spent on retailing, warehousing and fulfillment.
They need to do a lot of work in bringing their help pages up to date, training their operatives to all sing from one sheet – the latest sheet! – and make sure that their help pages continually reflect latest practices and rules.
Also they need to be making sure that when they say they will implement more stuff to plague the sellers, they will set up the infrastructure in advance.
For example, in many of the latest changes where we have been given the option to ‘opt-out’, the systems for doing so have not been in place at the rollout of these changes.
Quite frankly, lower fees if that much money gets freed up.