PayPal, eBay’s (EBAY - Analyst Report) payments arm, has issued a press release saying that its President David Marcus is leaving the company to join Facebook (FB - Analyst Report) mobile messaging. Facebook officials have specified that Marcus will work on mobile messaging and it appears that he will not run WhatsApp or deal with its payment products.
Neither company mentioned whether Marcus was required to work in a non-payments capacity for a specified period given his strategic position at PayPal. By his own admission, Marcus’ role at eBay had become more of a management one. Marcus will report to CEO Zuckerberg and Javier Olivan, who is Facebook’s VP for growth and analytics.
Facebook has been increasing focus on mobile messaging. The company recently struck the service from its main app and is now in the process of beefing it up to keep users interested. Its $19 billion acquisition of WhatsApp remains a bit of a mystery since it won’t be tied in with the messaging app just yet despite the fact that monetization remains an issue. At the same time, Apple’s (AAPL - Analyst Report) recently announced iOS 8 includes some of its most distinctive features and Android could be updated similarly. So the user base could be the only important addition, if monetized.
Building and monetizing Facebook messenger could be interesting, but Marcus comes from an ecommerce background and is known for building payments platforms and bringing them to scale. Facebook has had great success with small businesses that set up their Facebook pages and advertise on Facebook. The obvious next step would be to allow customers to complete the purchase without ever leaving Facebook. One can’t help but speculate on the possibilities, given the competitive nature of the market, the rate of innovation and the growing digitization of our lives.
Marcus joined PayPal in 2011 when his payments business Zong was acquired by eBay. He was promoted to President when the position was vacated upon Scott Thomson joining Yahoo (YHOO - Analyst Report).
This is the second important departure from PayPal in a very short span of time. A little over a month ago, Rakesh Agarwal, the Director of Strategy, departed as a result of bad blood between executives.
eBay’s payments business is very important for its growth. The business processed $180 billion in payment volumes in 2013 and had more than 148 million active users at the end of the year. Growth in the payments business has far exceeded that of the main ecommerce business in the last few quarters.
eBay has a Zacks Rank #3 (Hold), but Facebook is better-ranked at #2 (Buy).