I highly recommend listening to the webcast from eBay’s Analyst Day yesterday
http://investor.ebay.com/events.cfm
Will write a more thoughtful post this weekend.. just some quick thoughts
I like the 2x growth plan… REALLY LIKE IT.. For the record I have a bias: I have a paypal account, merchant account, paypal debit card, iPhone app, and I know several of their current and former execs. PayPal has the product, plan, network, and market to execute on this growth plan… their only issue seems to be talent.
Just 2 weeks ago they lost their key platform executive Osama Bedier to Google, this is the exec that was in charge of PayPal X, Platform and Emerging technologies. Last year they lost Dickson Chu (head of product) to Citi and Jack Stephenson (head of strategy) to Chase. These are some of the best payment/platform execs on the planet. What is going on?
Don’t get me wrong, Scott’s directs are excellent executive leaders: Ed Eger (great guy and friend), John McCabe (was fantastic at Wachovia), Gary Marino (Bank One CCO/CMO)… But bankers operate differently than the talent that started eBay/PayPal. Not that different is a bad thing… but it certainly leads to friction. Bankers understand credit risk, regulatory risk, pricing, ANR, LLR, CNR, … but do they understand platform? alliances? convergence? Remember Paypal is not a bank.. at least not yet. PayPal’s top level vision looks good, but my guess is that the bankers on the exec team are drowning out the message from talent with the skills to build and execute the plan. Scott seems to have a culture problem…. with a 2x rev growth target I doubt if they will spend much effort addressing it. Perhaps this is just the normal maturing of a business model…
How will PayPal generate revenue in the next 5 years? Does it follow the path of a Visa? If it believes in a “convergence” strategy who is it partnering with it? Can you build a platform without partners? Can PayPal build a network alone? is the current merchant/consumer value proposition strong enough to transition to POS? Digital Goods? What does PayPal know about the “cloud” when compared to Amazon and Google? Have you seen Amazon’s growth? Just incredible…
The good news for PayPal is that Visa/MA are failing in online and mobile plans.. PayPal has strong merchant loyalty, and 95M consumer accounts. PayPal has tremendous runway available for network expansion in its current model.. adding perhaps credit. But I give them very low odds of executing in digital goods, or mobile without reorganizing the business, creating a separate business unit which will attract a team that can create and execute new business models that work.