Sunday, October 26, 2008

Wag the Dog...eBay Style...

...Or perhaps it should be Paypal style. Maybe the whole "disruptive innovation" that eBay CEO John Donahoe came up with is to essentially scuttle eBay as an auction house, creating "jr", while at the same time letting former independent Paypal (now "owned" by eBay) become the defacto internet market transaction portal for those convient paperless (and victimless) transactions. That way, even if eBay's core businness as a wanna-be lookalike to uttterly fails (as they seem to be driving at), the real money control will still be Paypal. Since Payal is a subordinate company to eBay, eBay's prime share holders reap the benefits of the deal. Notice that Paypal is NOT publically traded and thus could be spun off soley at the discretion of the board.
Who really runs eBay? eBay or Paypal? Odds are Paypal is calling the shots on this scenario.

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