In Debate Over PayPal, Lessons from Alibaba

Ebay has rebuffed demands from investor Carl Icahn that it sell or at least partially spin out its PayPal division. In doing so, the e-commerce giant has painted Mr. Icahn as a self-serving vulture who doesn’t understand or care about innovation and the technology business.

Yet the case for a PayPal spinoff is much stronger than the company acknowledges. Indeed, the experience of a different online retailer shows that even a poorly-timed, acrimonious partial spin off of a valuable payments unit can work out in the end.