A new attractive App on iPad is not the only thing that will revitalise eBay Inc (NASDAQ:EBAY) as an e-commerce. On CNBC, John Quain, who is a contributor of New York Times, talked about what other changes the e-commerce company will have to make besides splitting PayPal next year.
“[…] The major move is of course people going mobile. More and more sales are mobile. People are buying cars on their smart phones, so there’s got to be a bigger push to get eBay Inc (NASDAQ:EBAY) into that space, and the way we shop on a handset or a tablet is different from the way we shop when we sat there waiting for the time to expire on an auction […],” said Quain.
In a fast paced environment of mobile shopping, auction might just be the thing holding eBay Inc (NASDAQ:EBAY) back. It is unlikely though that the change will come in the company’s business model fast enough to accelerate the sales during the upcoming holiday shopping season.
In fact, hopes of many eBay Inc (NASDAQ:EBAY) employees are riding on their company performing particularly well during Christmas, as it is estimated that eBay might have to cut as much as 10% of its workforce in light of its split with PayPal.
Quain expected the auction based e-commerce business to benefit significantly from the split. He expressed the opinion that such spinoffs have a much better track record of creating additional value for the shareholders than the mergers and acquisition strategy.
“[…] Usually we talk about Mergers & Acquisitions as, they don’t usually make people money, they make people who are involved in the deal money, but in the end, you know, the splits actually turn out to be more profitable, if you look at the economics of it and across all sorts of businesses […],” explained Quinn.
eBay Inc (NASDAQ:EBAY) is up about 3% year to date and was trading at $56.7 at the closing bell of the last trading day.
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