News comes in today from all quarters that eBay will spin off PayPal, which it acquired in 2002, as its own public company, sometime late in 2015.
While the news raises some questions, and answers a few others, the move could breathe fresh life into Paypal which is competing with Apple, Stripe, Square, and others in the mobile payments space.
As many have said in early reactions to the deal, this could lead to more innovation at the online payments company.
Paypal has built quite a presence in Boston since it acquired mobile advertising network Where Inc. in 2012. The company’s office in the Financial District is still populated by former Where employees like David Chang. The space also houses the PayPal StartTank—an incubator that has a loose focus on startups that would be of interest to PayPal—and StubHub, another eBay subsidiary.
It will be interesting to see what happens at the Boston office as StubHub will remain a part of eBay.
The PayPal Boston StartTank could be a model for the newly formed company as it moves forward as an e-commerce and payments innovator. Thus far, startups like Wanderu, Gloss48, Manicube, CO Everywhere, the recently acquired Greenbean Recycling, and Launch Angels have spun out of the incubator.
But another Boston company is a model for what a successful PayPal spinout might look like.
TripAdvisor was started in Needham in 2000 and acquired by IAC/InterActiveCorp in 2004. In 2005, IAC spun out its travel businesses as public company Expedia, Inc. By 2011, TripAdvisor itself was spun off from Expedia as its own publicly traded company and quickly surpassed its former owner.
With Expedia and TripAdvisor, it seems that the innovative little brother has surpassed its big bro.
TripAdvisor is Boston’s biggest internet company, and is showing no signs of slowing down. It is currently completing construction of its massive new headquarters just off of Rt. 128 in Needham.
If PayPal wants a model to follow when it spins off as a public company next year, there might not be a better path to follow than the one trail-blazed by TripAdvisor already.
(Another New England connection: Dan Schulman, a graduate of Middlebury College in Vermont, will be the chief executive of the new spun-off PayPal. Schulman has been the president of American Express’ Enterprise Growth Group since 2010)