eBay to ditch PayPal next year

The American auction site eBay is selling payment processor PayPal, the company has announced. PayPal will go public in the middle of next year. Earlier, eBay CEO John Donahoe said PayPal was an integral part of eBay.

The eBay CEO now says in a statement that eBay’s board of directors has concluded in a “strategic study” that there is no longer-term value in housing eBay and PayPal in the same company, Reuters reports. Therefore, PayPal will become an independent, publicly traded company next year, much like eBay is now. PayPal’s IPO is likely to make eBay a lot of money.

Last month it was rumored that eBay would like to sell PayPal, although eBay CEO Donahoe previously insisted that PayPal is an “integral part” of the auction site. Venture investor Carl Icahn previously called on eBay to get rid of PayPal; in the end, Icahn failed in his efforts to make it happen. According to some investors, PayPal could grow more as an independent company because it would make the tool more attractive to eBay’s competitors. eBay bought PayPal in 2002 for $1.5 billion.