Economics 2010: Article Review
What is PayPal’s first solo move? Written by AP published on October 1, 2014. In this article they discuss the direction Pay Pal is going now that they have divided entities from eBay Inc., and the business plans now that Apple announce the unveiling of Apple pay. When PayPal was part of eBay Inc. they took on a lot of eBay’s debt. This comes as a relief to PayPal that eBay has finally agreed to “let them go”. PayPal made the decision to be a separate company and fend on their own as a payment processing company and not a sister company under the eBay Inc. umbrella. They discuss in the article one of the biggest complications with them becoming a separate company, is Apple pay and the struggles they may face with all the separate privately owned payment sources available to consumers. Is this going to be a good or bad thing? How are they going to deal with that kind of competition? They are an individual corporation and not going to be able to rely on one guaranteed payment source every month because of the revenue eBay has been bringing in over the years. PayPal’s new CEO, Dan Schulman, is whom everyone is going to be focused on during this huge change for the company. The article explains the next steps for the company but a lot of people maintain reservation about the changes and may default to allowing another “big” corporation buy them out. The competition may be too difficult to survive alone. The new CEO is coming to Pay Pal with experience in mobile and prepaid payment options. Since the years to follow will be more difficult in the industry, people are intrigued to see what is in store for PayPal. PayPal consistently grew year over year with eBay sellers and buyers being the main source for revenue. The money flowed directly through the eBay system into PayPal’s payment options. All that talk about what Pay Pal is going to do without eBay, but they also bring up the data breach this year hitting eBay’s google search options, and Pay Pal and eBay working together to save each other during those harder times for eBay since we took a huge loss. With this great divde of the eBay/PayPal Duo, they will not have the same support and back up during difficult issues.
The reason I chose the article is I have a very strong opinion on the recent company separation. I have worked for eBay for over three years. Currently, it is a Monopolistic Competitive market and we deal with millions of new sellers every day. Internally, employees were concerned when we heard the news of the changes. We thought this was going to be the end of eBay and certain departments were going to be dissolved within the company because eBay would be losing the same support and revenue, but it looks like Pay Pal is facing the same issues. We also thought about all our sellers and how they were going to take that since we wouldn’t be able to give the information as efficiently as we can currently, such as if payments were received or how quickly they will be refunded. Since the division of the company hasn’t taken place, we are all trying to handle the concerns and uproar with the recent news. Fortunately, this hasn’t really affected the company internally through our current processes, but it is going to be interesting. We are all concerned with how our wages and employment are going to be affected because eBay relies on a large amount of outsourcing. This has been a beneficial to us in saving money and increasing the workforce, but PayPal was also our partners for that resource as well. For example, all of the human resource department is owned by both companies. I know that half of eBay’s HR department is going to be divided up between the two companies. We just don’t have enough employees for this division. This will either company to increase the employees or one of the companies are going to be short on employment until the budget allows for more or until they can figure out if they are going to handle the decrease in the employees available for the workload. I would have to say that these companies are definitely taking an opportunity cost when PayPal decided to separate from eBay. They may have made the decision to what long term effect it would make, improve the company or turn it into a complete disaster. Currently, I don’t think there is an industry model they would be able to follow and make a prediction of what the outcome. This will all be a new experience for both companies.
Ecommerce is changing quicker than you think, and working for both companies, I see that every day and believe that eBay is getting more and more competitive as the demand in the industry increases. Every online company will continue to grow until one company rises above all. I think that is what eBay is aiming to do with their changes. They want to take those chances that may make them more profitable and become not only the largest ecommerce company but the best in the industry. EBay may be concerned that PayPal was holding them back from becoming larger. EBay’s main objective is to follow the supply and demand so they can progress with the curve. They want to be the first source for the products their buyers want to purchase. EBay’s online ecommerce does not allow them to be elastic because of the auction and buying options from small, large, or unique sellers on the website. EBay is huge on mass marketing to reach out to many customers in various diversities from teenagers, collectors to the daily penny pincher. They want a large market website for all online shoppers
Microeconomics applies to my life in the products I purchase and how the company is doing and where they are going. When you make a purchase you do the research on it depending on how well the company is doing and the quality of the product. For example, solar energy. My family uses solar energy. If you fail to do the appropriate research on the command and control the government has on that piece of equipment you could end up upside down on the product that you are investing in. If you have an understanding of Microeconomics, you will know the many different ways of running a business as well as Monopoly, Oligopoly, Monopolistic Competition, and Perfect Competition. These are basic principles you would need to know if you were going to start your own business. My father has his own company, so knowing this information on microeconomics really benefits his business. Also, knowing your competition and the background of each different market and the type of advertising they use, is very valuable. The competition in class with soda, allowing each group to choose our own pricing, rent control, advertising cost, and having those economic challenges arise, made me think about the type of business I want to invest in when choosing my future career opportunities. Now, having an insight on different markets makes you realize no matter what line of business you go into everything is competitive. Whether it is in the car you purchase or how a company is managed, there will always need to adapt to change, because no matter where you go, microeconomics is a part of it.
The reason I chose the article is I have a very strong opinion on the recent company separation. I have worked for eBay for over three years. Currently, it is a Monopolistic Competitive market and we deal with millions of new sellers every day. Internally, employees were concerned when we heard the news of the changes. We thought this was going to be the end of eBay and certain departments were going to be dissolved within the company because eBay would be losing the same support and revenue, but it looks like Pay Pal is facing the same issues. We also thought about all our sellers and how they were going to take that since we wouldn’t be able to give the information as efficiently as we can currently, such as if payments were received or how quickly they will be refunded. Since the division of the company hasn’t taken place, we are all trying to handle the concerns and uproar with the recent news. Fortunately, this hasn’t really affected the company internally through our current processes, but it is going to be interesting. We are all concerned with how our wages and employment are going to be affected because eBay relies on a large amount of outsourcing. This has been a beneficial to us in saving money and increasing the workforce, but PayPal was also our partners for that resource as well. For example, all of the human resource department is owned by both companies. I know that half of eBay’s HR department is going to be divided up between the two companies. We just don’t have enough employees for this division. This will either company to increase the employees or one of the companies are going to be short on employment until the budget allows for more or until they can figure out if they are going to handle the decrease in the employees available for the workload. I would have to say that these companies are definitely taking an opportunity cost when PayPal decided to separate from eBay. They may have made the decision to what long term effect it would make, improve the company or turn it into a complete disaster. Currently, I don’t think there is an industry model they would be able to follow and make a prediction of what the outcome. This will all be a new experience for both companies.
Ecommerce is changing quicker than you think, and working for both companies, I see that every day and believe that eBay is getting more and more competitive as the demand in the industry increases. Every online company will continue to grow until one company rises above all. I think that is what eBay is aiming to do with their changes. They want to take those chances that may make them more profitable and become not only the largest ecommerce company but the best in the industry. EBay may be concerned that PayPal was holding them back from becoming larger. EBay’s main objective is to follow the supply and demand so they can progress with the curve. They want to be the first source for the products their buyers want to purchase. EBay’s online ecommerce does not allow them to be elastic because of the auction and buying options from small, large, or unique sellers on the website. EBay is huge on mass marketing to reach out to many customers in various diversities from teenagers, collectors to the daily penny pincher. They want a large market website for all online shoppers
Microeconomics applies to my life in the products I purchase and how the company is doing and where they are going. When you make a purchase you do the research on it depending on how well the company is doing and the quality of the product. For example, solar energy. My family uses solar energy. If you fail to do the appropriate research on the command and control the government has on that piece of equipment you could end up upside down on the product that you are investing in. If you have an understanding of Microeconomics, you will know the many different ways of running a business as well as Monopoly, Oligopoly, Monopolistic Competition, and Perfect Competition. These are basic principles you would need to know if you were going to start your own business. My father has his own company, so knowing this information on microeconomics really benefits his business. Also, knowing your competition and the background of each different market and the type of advertising they use, is very valuable. The competition in class with soda, allowing each group to choose our own pricing, rent control, advertising cost, and having those economic challenges arise, made me think about the type of business I want to invest in when choosing my future career opportunities. Now, having an insight on different markets makes you realize no matter what line of business you go into everything is competitive. Whether it is in the car you purchase or how a company is managed, there will always need to adapt to change, because no matter where you go, microeconomics is a part of it.