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October 16, 2014

eBay cuts 2014 revenue forecast

Follows announcement of PayPal split next year.

By Ben Sullivan

EBay has slashed its yearly revenue forecast whilst preparing for its imminent split from payments arm PayPal.

The cut shows eBay’s concerns about a weaker-than-expected Christmas season, with eBay shares falling over 3% in after-hours trading Wednesday night.

Earlier this month, eBay and PayPal announced the split that will come in 2015.

The decision came from eBay’s board of directors following a strategic review of the company’s future plans.

EBay CEO John Donahue said: "eBay and PayPal will be sharper and stronger, and more focused and competitive as leading, standalone companies in their respective markets.

"As independent companies, eBay and PayPal will enjoy added flexibility to pursue new market and partnership opportunities. And we are confident following a thorough assessment of the relationships between eBay and PayPal that operating agreements can maintain synergies going forward. Our board and management team believe that putting eBay and PayPal on independent paths in 2015 is best for each business and will create additional value for our shareholders."

Ebay’s full-year revenue is now between $17.85bn and $17.95bn, down from a previous estimate of between $18bn to $18.3bn.

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The auction site also forecast a Q4 revenue of less than $5bn, falling below Wall Street’s estimate of $5.2bn

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