How eBay’s purchase of PayPal changed Silicon Valley
Ten years have gone by since eBay completed one of the most important acquisitions in the history of the tech industry. While the circumstances of PayPal’s acquisition were quite different from the departure of Shockley Semiconductor’s “Traitorous Eight,” the event may ultimately prove to be just as consequential for Silicon Valley.
eBay’s purchase of PayPal for $1.5 billion closed in October 2002. At the time, eBay was the dominant e-commerce player on the web, and PayPal was an upstart payment service that had squeezed out eBay’s in-house payment option.
Now, with over 117 million active users worldwide and $35 billion in payment volume per quarter, PayPal is a major part of eBay’s business and the payment option of choice for many merchants around the globe. It’s a fitting time to reflect on the reasons PayPal sold itself to eBay and what the ramifications of that fateful decision have been.