Symantec, latest company to split in two United States software maker Symantec is the latest tech company to announce that it will split its operations into two. BBC reported on Sunday, that the Norton antivirus software maker said it would spin off operations into two publicly traded firms, one focused on security and the other on storage. The move follows similar operational division by tech giants Hewlett-Packard and eBay. Analysts said the break-up by struggling Symantec would make it more attractive for takeovers. Potential buyers like Cisco and NetApp are likely to show interest in Symantec’s California-based businesses, said Piper Jaffray analyst Andrew Nowinski. Its earnings growth and share price, impacted by slow PC sales, has lagged behind other software makers and led Symantec to fire two chief executives since 2012. The company’s revenue fell by three per cent to $6.7bn (£4.1bn) in its recent fiscal year on a struggling storage business, while operating income fell almost 20 per cent. E-commerce site eBay had announced plans to split off its payments system PayPal into a separate company. News of the move, which is expected to be completed in the second half of 2015, sent eBay’s shares 7.5 per cent higher. It is a reversal of strategy for the company, which has previously resisted pressure to split. However, the boss John Donahoe said the logic for running the companies jointly had changed. PayPal’s revenues are growing at 19 per cent a year, twice as quickly as eBay’s. Its payment system is available in 203 markets worldwide and is expected to process one billion mobile payments this year. PayPal’s annual revenue is $7.2bn (£4.5bn), while eBay’s is $9.9bn and is growing at 10 per cent a year. “A thorough strategic review shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively,” EBay’s chief executive John Donahoe said. Earlier this year the activist investor Carl Icahn began pressing for eBay to sell PayPal, a plan that was resisted by the eBay board. He stopped pushing after failing to gain enough support. “We are happy that eBay’s board and management have acted responsibly concerning the separation – perhaps a little later than they should have, but earlier than we expected,” said Mr Icahn in a statement on Tuesday. He added the separation will “meaningfully enhance value for all shareholders”. Analysts cheered the move, because it is seen as strengthening PayPal’s position as more e-payment systems, such as Apple Pay and Alibaba’s Alipay, enter the marketplace. “Breaking off from eBay will provide PayPal with more autonomy to compete in the payments space, particularly with respect to Apple Pay and other emerging mobile wallet providers,” wrote online advertising analytics firm eMarketer in a note. EMarketer estimates that in the US, mobile payments using smartphones will reach $3.5bn in 2014 and then balloon to $118bn by 2018. ift.tt/1yrgLad ift.tt/1ls1hrf [[Boost your social presence with NAIRALIKES nairalikes ]] #nigeria x #nairalikes #vanguardng
Posted on: Sun, 12 Oct 2014 23:13:15 +0000
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