Ebay defends keeping Paypal

Beleagued Ebay CEO John Donahoe, who is fending off activist investor Carl Icahn, claims the majority of shareholders are behind him.

Icahn wants Donahoe to spin-off of the company’s PayPal unit and has sent letters to shareholders accusing two eBay directors of conflicts of interest, and calling the board dysfunctional.

In the past, eBay has considered spinning off the multibillion-dollar payments service, but ruled it out because it would lose some advantages in the mail order business .

Donahoe told Reuters he has spoken with as many as 16 of the 20 most-active shareholders in eBay, and most favoured hanging on to the fast-growing PayPal payments unit.

PayPal had become the preferred online payment method of the online marketplace’s customers when eBay acquired it for $1.5 billion in 2002. Icahn owns  two percent of eBay and has been scrapping with the management  since January.

Still Apple will be happy that Icahn has stopped bothering them and has moved onto new targets.  For a while, he was buying shares in the fruity cargo cult with the aim of getting Apple to buy out more of its own shares to increase the value.