Can I change eBay policy? Yes Icahn!

Stand aside, CEO, and make way for opinionated shareholders - says opinionated shareholder

News on Wednesday that eBay is to spin off its electronic payment platform, PayPal, revealed the power of activist investors in a market that is terrified of social media. Fittingly, the revelation came in a tweet from outspoken shareholder Carl Icahn, and not from eBay's management team.

So what's going on?

In January, Computing reported that Icahn, an investor who counts a minority stake in eBay and a $3bn holding in Apple in his portfolio, was lobbying hard for eBay to spin off PayPal, which accounts for nearly 40 per cent of its revenue. At the time, he described the idea as a "no brainer".

In response, eBay expressed the view that the company was "best served by the current strategic direction and does not believe that breaking up the company is the best way to maximise shareholder value". Icahn, a shareholder, begged to differ.

eBay's statement continued: "As part of eBay, PayPal is able to leverage the company's technology capabilities, commerce platforms and relationships with retailers, brands and large merchants worldwide. Payment is part of commerce, and as part of eBay, PayPal drives commerce innovation in payments at global scale, creating value for consumers, merchants and shareholders."

Something has changed the company's mind.

eBay CEO John Donohoe insists that the policy u-turn came from a strategic review - which is something of an understatement, given that earlier in the year he said: "We and our board believe the best way to drive long-term shareholder value is to keep eBay and PayPal together, to capitalise on the opportunities. The distraction and dis-synergies [sic] of separation would be happening exactly at the wrong time."

Exactly the right time appears to be just eight months later, when all those dis-synergies now look really attractive. Donohoe's new position is that "keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively. The industry landscape is changing, and each business faces different competitive opportunities and challenges".

Well, clearly. Apple, for one, has not lost its bite after all. Apple Pay on your iPhone 6 is your new - if unexpectedly flexible - friend. Even Bill Gates thinks it's a great idea, so it must be!

But back to eBay. It used to be the case that business strategy was measured in five- and 10-year plans, but in the ever-changing landscape that Donohoe describes, it seems that long-term business strategy is now measured in months, from which we can deduce that shareholder value is measured in nanoseconds - and reported on social media, not balance sheets. By shareholders.

But who profits in such a transformed landscape? All we can say for certain is that in January, the value of eBay's shares rose by as much as 12 per cent after it disclosed Icahn's stake.

Macquarie Capital analyst Ben Schachter put it thus: "This is clearly not a move executed from a position of strength."