Will Paypal Get Its Groove Back? Top Stories for Wednesday

PAY PALS – Reactions are coming in on the breakup of PayPal and eBay, which I brought to you a bit raw yesterday. It's mostly cheers from the tech crowd, with observers considering that eBay was holding back PayPal and that it was high time it was allowed to roam free again and iterate new ideas faster. Venture capitalist Lee Hower, an early employee at PayPal, explains on LinkedIn why it made sense to sell to eBay then, and why it makes sense to break free now.

eBay’s acquisition of PayPal was good for PayPal and great for eBay and the two as a combined entity made a lot of sense for a long time. But for PayPal to maximize its potential as a payments platform the company must be unshackled by eBay. Today’s payments landscape is far more dynamic…Visa and MasterCard are publicly traded companies themselves. As incumbents they’re still not terribly forward thinking, but they’re more innovative today than they were a decade ago. There are obviously other companies that have attempted and largely failed to build meaningful payments businesses (e.g. Google, Amazon) and now others like Apple that will try. Crypto currencies are still in their infancy but regardless of whether Bitcoin ever becomes a widespread medium of exchange, the blockchain has significant potential to change the way transactions are conducted and how counterparties interact. (Read the full post.)

Among the infamous PayPal mafia – founders and early employees like Elon Musk who went on to build wildly successful companies – was Reid Hoffman. (His next play was founding LinkedIn so, full disclosure, he's my boss many rungs up the ladder). He explains why to him breaking up eBay and PayPal now makes sense, but ceding to activist investor Carl Icahn did not:

Key strategic decisions – decisions that will affect a company’s fortunes for years and even decades to come – have to be made by the leaders who are crafting and executing that company’s long-term plan, not outsiders seeking premiums on stock trades. (Read the full post.)

In the end, PayPal will win if it can convince consumers on three points, writes Peter Oakes, former director of enforcement at the Central Bank of Ireland.

At the end of the day consumers and businesses are concerned about a user friendly seamless interface, security and of course a lower transaction cost experience. This is where further investment in fintech is critical to all players, large and small. (Read the full post.)

Returning to dominance in online marketplaces, in the shadow of Amazon and Alibaba, without Paypal as a crutch for revenue, will be eBay's incredible challenge. But few commenters seem to be interested in this topic. That, if nothing else, proves it was time PayPal got its wings back.

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IN OTHER NEWS – A patient in Dallas, Texas, is the first case of ebola diagnosed outside Africa in this outbreak. He recently traveled to Liberia. Feeling ill upon his return, he went to the hospital but was sent home with antibiotics. He is now critically ill and in isolation. US health authorities are searching for all people he might have unknowingly infected while pharma companies work on quickly developing treatments and vaccines on a large enough scale. The epidemic shows no slowing down in Western Africa, where 3,000 people have already died.

Bloomberg's Matt Townsend reports that founder Dov Charney may be staying at American Apparel after all. The fashion retailer's board ousted Charney before the summer amid scandal and accusations of sexual harassment and inappropriate conduct. The controversial ex-CEO fought back and is in quiet negotiations with the company, serving for now as a paid consultant. The board could be offering him a new role at the company, though not as CEO. Townsend takes a look here at what's happening behind the scenes.

Microsoft will launch its new operating system, Windows 10, mid-2015, with an early look for its enterprise client. Why doesn't Windows 9 come after Windows 8, you ask? Maybe so we talk about it. And yes, the Start menu is back.

Reddit has raised $50 million and intends to share some of the equity with its users. Much like Silicon Valley employees typically receive shares of the companies they work for. “These community sites, the community has always generated the value and rarely gotten it for themselves,” Y Combinator president and lead investor Sam Altman told Re/code. No word yet on how exactly this will work.

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