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In prelude to spin-off, PayPal eclipses eBay's marketplace


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While all signs point to PayPal emerging from the spinoff as a healthy company, it will likely be a different story for eBay. Without PayPal, eBay   EBAY 0.87%  would merely be a slow-growth business at best and a possible acquisition target, and a possible acquisition target of Chinese e-commerce giant Alibaba   BABA 0.88%  could be an interested buyer as it looks to expand to the U.S.

Thankfully for eBay, it doesn’t look like the company will face competition from PayPal anytime soon. Earlier this month, the company revealed additional terms of the split,with eBay and PayPal entering into a deal that prohibits them from competing against each other after they’ve parted ways. PayPal is blocked from creating its own marketplace for physical goods, while eBay has promised to steer clear of building a payments system. As part of the agreement, the two companies will share data around payment risk and security.

Thankfully for eBay, it doesn’t look like the company will face competition from PayPal anytime soon. Earlier this month, the company revealed additional terms of the split,with eBay and PayPal entering into a deal that prohibits them from competing against each other after they’ve parted ways. PayPal is blocked from creating its own marketplace for physical goods, while eBay has promised to steer clear of building a payments system. As part of the agreement, the two companies will share data around payment risk and security.

But if Alibaba buys eBay then all bets are off because Alibaba has its own payment system. 

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