Following the news of the proposed separation of Paypal from eBay, the online retailer company also announced that it will be cutting off 2,400 of its employees, nearly seven percent of company's entire workforce.
According to official reports, eBay's plan is to break down the company into two smaller companies thus making it easier for them to be acquired by other bigger companies. After the corporate spin-off is done, the two companies would definitely be a target for industry acquirers like Alibaba and Google.
River Road Asset Management money manager Daniel Johnson said, "Now that Paypal will be a separate company, there's absolutely a possibility of an acquisition. There's a strategic benefit that PayPal would bring, whether it's to Google or Alibaba."
On the last quarter of 2014 despite the increase in revenue eBay did not hit what analysts at Wall Street had been expecting. Based on official statistics, sales rose to $4.92 billion compared to $4.53 billion on 2013, however it did not reach the Wall Street estimate of $4.93 billion.
eBay is also reportedly open to other strategic options such as sale or initial public offering for its eBay Enterprise, according to Market Watch.
The decision to split up the company was first proposed by investor Carl Icahn. Icahn proposed that in order to avoid total disruption of its core business segment eBay must cut down on both its workers and its units adding that splitting eBay and Paypal will result in easier acquisition of other companies.
Despite initial rejection of the idea, eBay finally conceded to the new less-is-more philosophy of Icahn in September.
If Google is interested in acquiring Paypal, it would cost the search engine giant around $50 billion to $60billion, according to Bloomberg.