Embattled paypal payment service remains a drawcard for ebay

Embattled paypal payment service remains a drawcard for ebay

Group sales rose 14 percent to 4.3 billion dollars (3.1 billion euros), ebay announced in san jose on tuesday.

At the beginning of the year, the feisty u.S. Investor and ebay major shareholder carl icahn had demanded that paypal be spun off. The service can be used to pay for online purchases and transfer money. Especially in the USA, where bank transfers are complicated, paypal is popular and growing accordingly fast.

Icahn, however, believed that the individual parts were worth more than the group as a whole. Ebay leadership, on the other hand, sees paypal as an ideal complement to the marketplace. A heated debate broke out. The two sides made peace only this month. Icahn withdrew his demand and in return was allowed to nominate a candidate of his choice for the board of directors, the highest company body.

Ebay boss john donahoe himself did not elaborate on the dispute in his announcement of the business figures. "We have had a strong first quarter," he declared. However, investors were disappointed with the outlook for the rest of the year. The share price fell by 4 percent in the second quarter.

Ebay is therefore only expected to make a small profit. The reason is an unusually high tax burden, because ebay brings profits of 6 billion dollars from abroad into the u.S. U.S. Tax authorities are holding out their hand.

For this reason, american companies usually avoid bringing their foreign profits home. So the rich apple company is tapping the capital market for fresh money again, in order not to have to go to the cash reserves on the other side of the US border.

Ebay, on the other hand, took a $2.3 billion loss in the first quarter to get its money from abroad. The company had earned 677 million dollars in the same period last year. Before taxes, ebay could earn more.

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