PayPal to cut about 325 jobs in major reorganization

SAN FRANCISCO, Mon Oct 29, 2012 – PayPal is cutting about 325 jobs as part of a major reorganization by its new president, David Marcus, designed to regain an innovative edge and head off rising competition.

PayPal, the online payment pioneer owned by eBay Inc., said on Monday the full-time jobs would be eliminated as it combines nine product-development groups into one. The company is also cutting about 120 contractors.

EBay announced a $15 million pre-tax restructuring charge, to be recorded in its fourth quarter, related to the job reductions.

PayPal, which started in the late 1990s as a scrappy Silicon Valley start-up, had almost 13,000 employees earlier this year.

“In a large company, at some point you reach the law of diminishing returns when more people means slower,” said Marcus, who used to run mobile payments start-up Zong, which PayPal acquired last year.

“You have a lot of duplication of roles with nine product groups merging into one,” he said.

Wall Street considers PayPal the crown jewel of eBay because it is growing fast and profit margins are expanding. But in Silicon Valley, PayPal is considered a slow, bureaucratic behemoth – a reputation that has made it difficult for the company to attract and retain smart software engineers and designers.

PayPal needs such talent more than ever because a slew of payments start-ups, including Square, Stripe and Dwolla, are developing rival services and products that are beginning to catch on with merchants and consumers.

“PayPal has been on a very strong growth trajectory, but it’s facing a period of disruption ahead,” said Kevin Hartz, chief executive of ticketing start-up Eventbrite.

“We just haven’t seen a lot of innovation that’s needed for them to continue their leadership,” added Hartz, who was an early investor in PayPal and owns a small stake in Square now.

Marcus said he is reorganizing PayPal to help engineers and designers develop new products and services more quickly, to keep up with new rivals.

eBay takes on Groupon over daily deals

SAN FRANCISCO, Wed Oct 10, 2012 – EBay Inc. has quietly launched an online marketplace for deals on local services, taking on Groupon Inc. and expanding into a potentially big category.

Groupon shares fell 4.3 percent to $5.05 in afternoon trading.

The news of eBay’s deals service emerged as the e-commerce company unveiled a major re-design of its website, adding Facebook-like features it hopes will spur more sales.

Called eBay Lifestyle Deals, the daily deal offers are being run in a limited number of urban areas, including the San Francisco Bay area, Los Angeles and Washington D.C.

Recent deals included $12 for a one-hour dog-walking service worth $25; $50 for a month of Yoga classes worth $110; and $180 for six private gym sessions worth $360.

The move is potentially a big step for eBay, which has traditionally focused on products rather than services.

“We have a big marketplace and a lot of people who come to eBay don’t just come for one thing – they stay and buy across categories,” said Devin Wenig, president of eBay Marketplaces.

EBay and Amazon eye same-day delivery

SAN FRANCISCO, Aug. 13, 2012 – Getting a new music CD or a cup of coffee delivered to your door within the hour was one of the things that made the Internet seem so amazing back in the late ’90s. Then, of course, it turned out the Net wasn’t able to revoke the laws of business physics, and delivery services such as Kozmo.com and Urban Fetch blew up. Now, the two giants of Web retailing are giving same-day delivery another try. But they’re taking very different approaches, and it remains to be seen whether the services will scale up beyond a few cities.

Earlier this week, EBay invited select San Francisco customers to sample EBay Now – a shopping app that boasts same-day delivery. Bay Area residents who have received an invite will be able to download the app to their Apple  iPhones and iPads.

All of the products featured will be new and sold directly by local stores, including Target, Nordstrom  and Walgreens. Once you hit the “Bring It” button, your personal

EBay shopping valet will pick up and deliver the item to wherever you are—the office, home, coffee shop. The Web auction house will waive the delivery fee for your first three purchases (which can’t cost less than $25), after which point a $5 surcharge will be tacked on. The beta pilot is only meant to gauge whether there’s an appetite.

“Same-day services are satisfying both the convenient need of online shopping and immediacy factor of offline,” says Scot Wingo, chief executive officer of ChannelAdvisor, a global e-commerce software provider.

Amazon.com already offers limited same-day delivery. Shoppers who have signed up for a $79-a-year Prime account can get it on eligible items for $3.99 in 10 metro areas, including Chicago, New York, and Seattle. Retail experts speculate Amazon could roll out a more extensive same-day model, coupled with a change in its sales tax policy.

The Seattle-based company has avoided having a physical presence in states that require e-tailers to charge sales tax. That has kept prices low but made same-day delivery in those places almost impossible. Under mounting political pressure, Amazon has agreed with several states to do that in return for tax credits to build warehouses near metropolitan hubs, according to a Financial Times investigation.

An Amazon spokeswoman declined to comment.

EBay sees strong mobile commerce volume growth in 2012

SAN FRANCISCO – EBay Inc. forecast robust growth in its mobile commerce segment as the online commerce and auction site expects more people to shop and pay via smartphones.

The company has been making a particularly strong push in mobile commerce and developing new applications for its e-commerce platforms.

In 2012, eBay expects to do $8 billion in mobile commerce retail volume, and its electronic payments system PayPal expects to process $7 billion in mobile payment volume.

In 2011, eBay mobile commerce generated $5 billion in retail volume, and PayPal mobile generated $4 billion in payment volume.

In January eBay gave a conservative quarterly sales forecast despite unveiling better-than-expected results, warning that a weak European economy may take the gloss off rip-roaring growth in online commerce.

The company also announced a new partnership with carrier three.co.uk and strategic agreements with merchants such as Yotel and entradas.com

EBay buys analysis firm Hunch to boost recommendations

SAN FRANCISCO ― EBay said it acquired the data analysis firm Hunch to help it develop more recommendation technology for its online marketplace.

Chris Dixon, Tom Pinckney and Matt Gattis, who founded Hunch in 2009, will stay on at eBay and remain based in New York. The purchase price was not disclosed.

Hunch analyzes data from social networks like Facebook and from questionnaires to make personal recommendations. EBay said Hunch will help it suggest relevant products for shoppers on its online marketplace.

This is the latest in a string of acquisitions by eBay as it tries to revive its online marketplace, which has lost market share in recent years to Amazon.com Inc., the world’s largest retailer.

Most retailers, like Amazon, have inventory that they can catalog and use to recommend related products to customers. In contrast, eBay’s Marketplaces business offers items from other sellers, and a lot of the products are used and unique. This creates a lot of unstructured data that is harder to analyze for search and recommendations.

“Hunch was solving a similar problem with unstructured data,” said Mark Carges, chief technology officer at eBay. “The type of technologies were similar enough that this makes sense.”

Hunch’s Dixon said the company was attracted by the large amount of data eBay has amassed. Becoming part of eBay will give Hunch unfettered access to analyze this information.

EBay to deepen Facebook relationship; to unveil PayPal Access

SAN FRANCISCO ― EBay Inc. is set to deepen its relationship with social network leader Facebook at a developer conference this week, a person familiar with the e-commerce company said on Tuesday.

EBay will also unveil a new online identification service for shoppers called PayPal Access, the person added.

The company expects almost 4,000 people to attend its X.commerce conference in San Francisco on Oct. 12, 13 and 14. The event marks the official launch of the company’s new X.commerce division, which will target e-commerce software developers.

EBay is trying to encourage outside developers to create applications for its e-commerce platforms and is making a particularly strong push in mobile commerce.

At the end of September, Katie Mitic, head of Platform and Mobile Marketing at Facebook, joined eBay’s board of directors, sparking speculation that the two companies were working on new partnerships.

Mitic is scheduled to be one of the keynote speakers at the X.commerce conference on Wednesday. Facebook Platform, which Mitic helps run, is the company’s developer unit, so any new partnership will focus on this area, the person said on condition of anonymity because the plans aren’t public yet.

EBay and Facebook have an existing partnership the allows the purchase of Facebook self-serve ads and Facebook Credits using PayPal, eBay’s electronic payments system.

“We believe a deeper partnership could be announced at the conference,” Doug Anmuth, an analyst at JPMorgan, wrote in a note to investors on Monday.

EBay’s new PayPal Access service will let users shop across the Web using just their PayPal email credentials and password, according to the person.

The service will eliminate the need to type in credit card information, billing and shipping addresses and any age verification requirements, they said.

Customers will be able to chose whether to activate PayPal Access. Merchants who sign up for the service will only see customers’ shipping addresses because PayPal has already verified the other information, they added.

Merchants may be attracted to PayPal Access because it could encourage shoppers to complete purchases, rather than giving up when they’re asked for a lot of information at checkout.

For eBay, the new service could encourage more merchants to accept PayPal as a payment option.

HP may oust CEO Apotheker, hire eBay veteran Whitman: source

PALO ALTO, Calif. ― Hewlett-Packard Co’s board convened on Wednesday to consider ousting CEO Leo Apotheker after less than a year on the job and replacing him temporarily with former eBay CEO Meg Whitman, a source familiar with the matter said.

HP’s board of directors — facing shareholder lawsuits and intensifying criticism from investors — is thrashing out a host of issues, including whether to name Whitman as the interim CEO, the source told Reuters.

The storied Silicon Valley giant is fighting to restore its crumbling credibility. During his 11-month tenure, Apotheker slashed sales forecasts repeatedly, backtracked on promises to integrate Palm’s webOS software into devices, and struggled to halt a 50 percent plunge in the share price.

No decisions have yet been made about leadership, the source said on condition of anonymity because of the sensitivity of the issue.

Wall Street roared its approval, sending HP shares up 6.6 percent to close at $23.96, a gain of $3 billion in the company’s market value.

If Apotheker is let go, he would be the third CEO in a row to be ousted by the board of the largest U.S. technology company by sales.

Analysts say the odds may have been stacked against Apotheker from the beginning. Venture capitalist Ray Lane, who this year assumed chairmanship of an often-lambasted but powerful board, has argued that previous management underinvested in areas including software and services.

“He was doomed from the beginning,” said Ticonderoga Securities analyst Brian White. “The die was cast for whoever stepped into that position.”

Investors seemed to approve of Whitman, a billionaire who joined HP’s board this year on an interim basis after a failed bid to become California’s governor.

Apotheker, former CEO of German business software maker SAP AG, was a surprise choice to replace the popular Mark Hurd, himself ousted last year after a scandal involving expense reports and a female contractor.

Before Hurd came Carly Fiorina — like Whitman, a candidate for California political office — whom investors blamed for betting on a sunset PC industry by buying Compaq. She was eventually fired by the board.Now, HP is grappling with withering criticism from Wall Street — and a raft of shareholder lawsuits — over recent strategic decisions and the haphazard way in which they have been communicated.

In August, it confounded investors by killing off a much-touted line of mobile devices including the TouchPad and declaring it may spin off its massive PC division. Apotheker also spearheaded a deal to buy British software maker Autonomy that many considered too costly.

The potential loss of HP’s main public face raises questions about those pivotal strategic shifts, and has even triggered speculation the board might do an about-face on some of them.

Especially rankling to investors had been a decision to fork over close to $12 billion for Autonomy, without clarifying how the niche maker of cloud-computing software would fit into or help drive a sprawling empire that spans computers, printers, software and enterprise IT solutions.

“If (HP) fires Apotheker, cancels Autonomy deal, and keeps PC division, it’ll be great for the stock — and every director should be arrested,” outspoken hedge fund manager Eric Jackson said on Twitter in reaction to the news.

EBay, Newell Rubbermaid invest in Shipwire logistics provider

SAN FRANCISCO ― EBay Inc. invested in logistics provider Shipwire, according to a statement Wednesday, the latest example of the e-commerce company’s push to add more services for merchants moving online.

Newell Rubbermaid Inc. invested alongside EBay. The two companies join existing Shipwire backer Meakem Becker Venture Capital. The size of the investment was not disclosed.

EBay Vice President and Head of Corporate Strategy Jean-Francois Van Kerckhove will go on Shipwire’s board of directors, along with Amine Khechfe, founder of DYMO Endicia, a shipping technology company owned by Newell Rubbermaid.

Shipwire stores and ships products for merchants and sells order-management software. Such services are in demand as more retailers expand online sales and look for ways to offer customers easy shipping options.

EBay has been on an acquisition spree in the past year. Many of the businesses it has bought provide services that help merchants operate online.

“Shipwire built a logistics technology platform, that gives any seller access to storage and shipping tools in domestic and international markets, previously only available to the largest merchants,” Van Kerckhove said in the statement.

E-commerce rival Amazon.com Inc. unveiled a new shipping service on Wednesday.

Endless.com, a unit of Amazon that sells shoes online, said international shipping in more than 50 countries will be free on orders over $100. All other orders will be shipped for a flat $10.

EBay and PayPal sue Google over mobile payment trade secrets

NEW YORK ― EBay and its online payment unit, PayPal, Thursday sued Google Inc. and two executives for stealing trade secrets related to mobile payment systems.

The two executives, Osama Bedier and Stephanie Tilenius, were formerly with PayPal and led the launch Thursday of Google’s own mobile payment system in partnership with MasterCard, Citigroup and phone company Sprint.

The suit highlights the growing battle by a wide range of companies from traditional finance to Silicon Valley trying to take a major stake in what has been described as a $1 trillion opportunity in mobile payments. The mobile phone is seen as the digital personal wallet of the future.

The eBay suit said Bedier worked for nine years at PayPal, most recently serving as vice president of platform, mobile and new ventures. He joined Google on Jan. 24 this year.

Tilenius was at eBay from 2001 to October 2009 and served as a consultant to the company until March 2010. The suit says Tilenius joined Google in February 2010 as vice president of e-commerce.

Bedier is accused in the suit of having “misappropriated PayPal trade secrets by disclosing them within Google and to major retailers.”

The suit accused Tilenius of recruiting Bedier, thereby breaking a contractual agreement with eBay. It also claims Bedier attempted to recruit former colleagues still at PayPal.

Ebay said PayPal and Google worked closely together for three years until this year on developing a commercial deal where PayPal would serve as a payment option for mobile application purchases on Google’s Android phones.

It said Bedier was the senior PayPal executive leading and finalizing negotiations with Google on Android during this period.

It also claimed Bedier transferred up-to-date versions of documents outlining PayPal’s mobile payment strategies to his non-PayPal computer just days before leaving PayPal for Google.

“By hiring Bedier, with his trade secret knowledge of PayPal’s plans and understanding of Google’s weaknesses as viewed by the industry leader (PayPal), Google bought the most comprehensive and sophisticated critique of its own problems available,” the suit said.

Google spokesman Aaron Zamost said the company had not yet received a copy of the complaint would not be able to comment until it has had a chance to review it.