Jonathon Trugman

Jonathon Trugman

eBay and PayPal rekindle business relationship

Everybody knows the best part about a big fight is the making up.

So after a brief but very contentious public shareholder fight, Carl Icahn and eBay’s board have chosen to make peace, not war. 

That’s a good thing, because when Icahn and a company’s board make up, they usually clean up their corporate governance issues and focus their energies on making money for shareholders.

Yes, Icahn by making up and teaming up has helped lots of companies make money for their shareholders. Hey, who better than New York’s own $25 billion self-made activist? 

Last week, the eBay deal was a case in point. Icahn withdrew his proposal to split PayPal from eBay and add two nominees to the board, as an expensive and distracting proxy fight was becoming increasingly likely. 

In exchange, Icahn gets one board seat now and a confidentiality agreement. That new seat will be filled by David Dorman, who worked closely and very successfully with Icahn when he was on the board of Motorola. 

In addition to gaining the board seat, Icahn has now had lengthy conversations with eBay CEO John Don¬ahoe about the potential value of PayPal within eBay. 

Many of the knee-jerk reactionaries claim that Icahn “lost” this one. The Silicon Valley slicksters will tell you this too, but only because Silicon Valley is scared of the tough New Yorker, and everything (like shareholder rights and corporate governance) that Icahn stands for.

But at the same time Donahoe and Icahn took to the airwaves Thursday to essentially make nice and talk about the resolution, Marc Andreessen — eBay board member, Silicon Valley insider and a rather thorny opponent of Icahn — took to Twitter in a tweet that drips with sarcasm: “I am tickled pink to welcome my old friend David Dorman to the eBay board! He’ll be an outstanding independent director for a great company.”

Despite having a strong core business, eBay and other Silicon Valley power hoarders can and will learn a lot from the New York’s master of increasing shareholder value. 

You don’t get to be worth $25 billion by accident!