Tech

EBay Sheds Assets

E-commerce giant, eBay, has agreed to sell eBay Enterprise for $925 million to a consortium that includes private-equity firms Permira and Sterling Partners.

EBay Enterprise helps companies, including Timberland, Ikea, and iRobot, run their online retail sites reported Cnet Thursday.

Buying GSI Commerce, a precursor to eBay Enterprise, for $2.4 billion in 2011, eBay took a loss on the sale.

Research director at online brokerage City Index, Kathleen Brooks, said, “Without a sale the enterprise unit could have been a weight around eBay’s neck, after one of its largest customers, Toys ‘R’ Us, said it would stop using the service and bring operations in house by 2016.”

This is a continuation of eBay’s resolve to focus solely on its online marketplace. Last month eBay sold its stake in Craigslist, and Friday it plans on separating from PayPal.

Influential investor Carl Icahn helped facilitate the PayPal breakup to foster more growth on behalf of the online payment system.

Although PayPal will face tough competition in the form of Apple and Google, once the split with eBay is finalized, it will have more room to maneuver and partner with other companies.

Following Friday’s split, PayPal is expected to surpass eBay in terms of raw market valuation.

PayPal president Dan Schulman said, “We want to become more of a part of how customers move money,” in reference to the split.

EBay’s just released second quarter earnings show the company’s better than expected adjusted earnings, causing stocks to rise 3 percent to $65.47 by the afternoon.

Incoming CEO Devin Wenig said, “I’m encouraged by the state of our business. We’ve made solid progress but we have significant work ahead of us.”

This “significant work” comes in the form of raising the marketplaces’ unit’s revenue, which fell 3 percent to $2.12 billion, since last year.

In contrast, the unit that PayPal fell under, the payments unit, saw revenue surge 16 percent to $2.26 billion.

Overall, the company saw $83 million in profits. But without PayPal, eBay will have a tough time facing serious competition in the form of Amazon and other online retailers.