Facebook Snaps Up David Marcus From Paypal -- Are FB Payments Next?

NEW YORK (TheStreet) -- On Monday, David Marcus -- who had been running eBay's (EBAY) PayPal -- made the announcement that he was leaving his post in order to take a job at Facebook (FB).


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There was an immediate reaction on Twitter (TWTR) to the news that this was a big steal of a top exec by Facebook. Some concluded that this hire was a sign that Facebook was about to move into payments in a big way. Others said it was a sign that Facebook was about to copy Tencent's (TCEHY) WeChat, which has been a global leader in tying their popular messaging app to payments.

None of us knows what really went down to drive Marcus's decision to leave PayPal and for Facebook to offer him a job. And we probably never will. However, this move raises more questions than it answers about the direction of both companies.

Here are some alternatives to the kneejerk reaction to the news yesterday:

1. Did Marcus really leave PayPal to take this job -- or was he pushed?

After the news broke yesterday, I tweeted to ask what Marcus's PayPal legacy would look like in two years.

VC Keith Rabois immediately tweeted back: "The rise of Square and Stripe." Keith should know. He worked at Square as COO and now is a backer of Stripe. But his point is a good one: it's difficult to identify how Marcus has helped PayPal in the last three years.

When he was appointed -- after its former head Scott Thompson decamped for Yahoo! (YHOO) -- Marcus was seen as a guy who got mobile and would finally make PayPal into a mobile company. Things have improved but it's tough to see that there's been huge progress here.

Is it all his fault? Probably not.

He was hamstrung by the fact his boss, John Donahoe at eBay, refused to spin off PayPal. Maybe Donahoe was frustrated with Marcus' performance and told him to leave but that he could spin it as if he was taking another job.

2. Maybe Donahoe really wanted Bill Ready to run PayPal.

To me, Marcus' biggest accomplishment during his tenure was that he bought payment start-up Braintree, and brought on board its CEO Bill Ready. Maybe Donahoe saw Ready, not Marcus, as the guy who could finally deliver PayPal to the promised land of mobile.

3. Why would a guy who's effectively a CEO leave to take a job somewhere else as a VP?

Facebook is obviously a great company. So most people reacting to the news seem to be giving Marcus the benefit of the doubt for leaving PayPal to take this new job. But it does strike me as curious that he'd want to take such a step down in responsibility.

In my experience, most people who choose to devote their lives to rising through the ranks of management really want to be a CEO. And once they become a CEO somewhere, they fight tooth and nail to keep their job. Look at John Chambers at Cisco (CSCO). His critics have come at him so many times over the years for a flagging Cisco stock price. He just buckled down and did everything he could to stay in charge.

Here you have Marcus leaving PayPal -- arguably the top payments company in the world and a more important part of eBay that eBay's traditional marketplace business -- saying he willingly is leaving to go somewhere to become a VP. Yes, a VP at a great company. But not an SVP, a VP.

Is he in line to one day become the CEO of Facebook? No chance.

So why leave?

4. Maybe he left because he was frustrated with PayPal.

Maybe Marcus wasn't pushed by Donahoe. Maybe he looked at the lay of the land and concluded that the place was doomed because it is tied up within eBay.

5. Maybe he left because the Facebook job was truly a better opportunity.

This is what Marcus is saying. And it might be accurate.

But if that's the case, there has to be another shoe to drop. Marcus is VP of Messaging Products. And perhaps the bigger play here is that Facebook truly wants to beef up its payments in a big way. The company has a payments stream already, but it wants that stream to be bigger.

Perhaps Facebook sees messaging as the way to grow this stream, in the way that WeChat has. By putting Marcus into this role with this title, they're not tipping their hand as to what their plans are here (i.e., to copycat WeChat).

This is plausible to me. And for Marcus, maybe this is a better path, even though he's no longer the "CEO." If the red tape at eBay was truly bad, this path could have been much more attractive even though there is less personal prestige.

It might be a combination of all these reasons. However, what's clear is that the truth behind the move is likely a lot more interesting than the kneejerk analyses you read on Twitter yesterday afternoon.

In the meantime, eBay's stock is now at $48 and near a 52-week low. Donahoe's arguments during the Carl Icahn proxy fight about why it's so important to keep PayPal and eBay together seem less convincing today than they did a few weeks ago.

The pressure will be on both Donahoe and Marcus to show that yesterday's move makes sense in the years to come.

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At the time of publication, the author was long YHOO.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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