There's a great deal of speculation as to why eBay (EBAY) said that it was best for the company to remain intact, only to split itself apart a few months later.
In January it said:
"We continue to believe that the company, our customers and our shareholders are best served by keeping PayPal and eBay together. In short, we believe this is the best way to maximize shareholder value. Our board is unified in its view on this."
Now, in its press release announcing the split-up, eBay says:
"A changing competitive landscape creates enormous opportunities for eBay and PayPal; separation will create sharper strategic focus and better position each business to capitalize on those growth opportunities as independent companies. The pace of industry change and innovation in commerce and payments requires maximum flexibility to stay competitive and drive global leadership."
Just how that "competitive landscape" could change in such a short amount of time is unclear, unless eBay is jockeying to be sold to a cash-rich Alibaba (BABA). Or maybe it wants PayPal to be more like Alibaba's Alipay, which is separate. Or maybe, just maybe, the creation of Apple (AAPL) Pay has given it a dose of reality. Or -- fill in the blank.
Whatever it is, with a split eBay is reinventing itself. Reinvention is often the hardest thing for companies to do, but it's also often the difference among companies -- big and small -- that succeed or fail or get lulled into mediocrity.
As I write in a piece on LinkedIn, "Why it's Important to Reinvent Yourself," in the very least reinvention is important to avoid becoming stale.
The concept of reinvention isn't new, of course, but it's often overlooked. In his book, Invent, Reinvent, Thrive, Northwestern University professor Lloyd Shefsky goes through company after company that reinvented before it was too late, including Costco (COST), IBM (IBM), Google (GOOGL), Facebook (FB), Starbucks (SBUX) and Intel (INTC).
One notable exception -- Kodak (KODK) -- sat on what arguably was its most important invention ever: the digital camera. The company buried it, until Kodak's chance to shine was too late.
EBay didn't invent PayPal, but PayPal is a (the?) leading payments company. Had eBay ignored marketplace dynamics, it very well could have squelched PayPal's future -- and, from an investment perspective, its own.
"This is a classic example of reinvention of mature companies because of events occurring outside the company," Shefsky says.
Regardless of how this shakes out, by swallowing its pride it appears that eBay may have just avoided a Kodak moment.