Banmoco News As It Happens

EBay thrust its partner PayPal into the limelight yesterday, saying that the online payments unit will surpass its main marketplace division in the next three to five years while executives push the Web company to become a leading innovator.

Total shares of eBay, which has desperately been trying to shed its unwanted image of being an Internet has-been, rose nearly 8% during investor meetings at the San Jose, California headquarters that the auction giant keeps. There, it was said that PayPal revenue might double by 2013.

Although eBay has suggested that PayPal is its prime growth engine in recent years, questions about competition and regulatory environments for payment processors might still be a concern among investors. As well as this, many investors are still underwhelmed by more familiar marketplaces units – high-margin units that connect online buyers to sellers but are largely mature.

Chief Executive of eBay, John Donahoe, said that eBay was is now at an inflection point with regards to its standing in the world of e-commerce. He added that the company needs to exploit the use of smartphones, technology he branded as being a store in the pocket of users that are able to shop and then pay in one fell swoop.

While EBay was a pioneer of Web auctions during the dotcom boom, the novelty of the marketplaces business it runs eventually dwindled in popularity and its growth started to falter.