With its core business stagnating, online auction house eBay has outlined plans to turn its attention to the fast-growing PayPal, which is expected to double revenues within three years.
In an analyst meeting held yesterday, the company's management set out its plans for the next three years, stressing the primacy of online payments business PayPal.
John Donahoe, president and CEO, eBay, says PayPal has grown to become a second core business and has the potential to become bigger than eBay Marketplaces because it targets all of e-commerce.
"Increasingly for online consumers, there's no paper, no plastic - there's just PayPal. We believe this business is one of the most exciting and high-potential opportunities anywhere online today," says Donahoe.
PayPal currently claims more than 70 million active accounts in 190 markets and 19 currencies, and says it expects revenue to double by 2011, hitting $4 billion to $5 billion, up from $2.4 billion in 2008.
This will be driven by strong non-eBay growth and expansion into mobile payments.
The business should also be boosted by eBay's acquisition last October of online payment scheme Bill Me Later.
In contrast, the firm says it is looking to "stabilise" the eBay Marketplaces business, which it expects to achieve revenues of $5 billion to $7 billion, in 2011.
The company will look to diversify across a range of formats such as classifieds and advertising that are expected to grow faster than e-commerce. It will also continue the shift to toward more fixed price sales with a smaller online auction business.