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Verifone (PAY) Shares Pop as eBay (EBAY) Chooses Next PayPal Prez

March 29, 2012 10:14 AM EDT
Is eBay's new executive appointment a dud or was the move a brilliant one akin to that of another tech giant?

According to a release out earlier Thursday, eBay (Nasdaq: EBAY) appointed former PayPal Mobile Vice President David Marcus as the new President of PayPal. The appointment came as former President Scott Thompson left for the CEO spot at Yahoo! (Nasdaq: YHOO) just a few months ago.

Reacting on the news is VeriFone Systems (NYSE: PAY), now up more than 1 percent about a half hour after the opening bell. VeriFone -- a leading provider of point-of-sale (POS) systems to retailers and other establishments -- has been working on installing near-field communication (NFC) payment devices across the U.S. and is rumored to be mulling a partnership with Google (Nasdaq: GOOG) over further deployment of Google Wallet. VeriFone could stand to benefit from further expansion of PayPal's services.

For PayPal itself, however, numbers show vast improvement in the mobile payment environment already. Last quarter eBay said, "mobile payment volume reached $4.0 billion in 2011, more than five times the mobile payment volume in the prior year, as more consumers used their smartphones and tablets to pay online." Those numbers allude to a strong appointment of Marcus as PayPal President.

An area where PayPal and Verifone may butt heads is mobile, consumer-friendly credit-card readers. In addition to Verifone's offering, PayPal has its "Here" reader which attaches to most Google (Nasdaq: GOOG) Android and Apple (Nasdaq: AAPL) iOS devices. Along with PayPal and Verifone, a third competitor in privately-held Square has its "Pay With Square" app and mobile card reader.

Marcus has his work cut out for him to keep PayPal atop its mobile game, though in the near-term things appear to already be set-up for PayPal to continue expansion.

The appointment might also provide the same results that Apple investors are enjoying as CEO Tim Cook took over for the late Steve Jobs at Apple. Farming a strong enough team to be able to pick a successor from the lot has worked in the past for tech companies, and with PayPal fixing to be bigger than eBay real soon, finely-tuned execution and know-how are key.

Shares of eBay are down 0.7 percent early Thursday morning. Verifone shares are up 1.1 percent.


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