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eBay rumors say PayPal president David Marcus was fired; execs refute the claims

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Update 6/19: Since the initial publication of this story, Marcus and eBay CEO John Donahoe have gone on the record to say that Marcus was not fired. We’ve updated the story as noted in italics below, and have changed the headline.

Outgoing PayPal David Marcus was shown the door by eBay executives because his vision for the virtual-payment kingpin wasn’t working out, sources within eBay are saying.

In other words, he was fired. Update: Marcus and his former boss refute the claims.

“David’s a product guy. His background is in product. It wasn’t working, and he was pushed out,” a source at eBay with knowledge of the situation told VentureBeat.

eBay president John Donahoe presided over an all-hands meeting at eBay’s San Jose headquarters in early June where Marcus’ departure was announced. At that meeting, Marcus said he was voluntarily stepping down to take a position at Facebook. His role there is vice president of messaging products.

Donahoe wrote to VentureBeat to repeat Marcus’s statement. “David’s decision to leave was his own, and I am very appreciative of what he contributed to Paypal,” Donahoe said in his email.

PayPal’s communications team also denied that Marcus was fired. Anuj Nayar, PayPal’s senior director of global initiatives, put it this way in an email to VentureBeat:

David made a personal career decision to join Facebook. We wish him the very best, and thank him for his leadership and commitment to PayPal over the last three years.

Alan Marks, eBay Inc’s senior vice president for communications, strenuosly denied Marcus was fired.

“The story is flat out wrong,” Marks said.

When Marcus, a motivated and highly intelligent coder by trade, announced he was leaving the CEO job for a VP position at Facebook, there were more than a few raised eyebrows because the change was perceived not as a big move up but a slight move down.

In his roughly three years as PayPal’s president, Marcus ruffled more than a few feathers when he sent a heated and caustic email to all of PayPal’s 14,000 employees.

In that email, Marcus slammed employees for not using PayPal’s mobile app he helped introduce and said that if workers weren’t passionate about the company’s mission they should find another job. Silicon Valley had a field day when the email was revealed.

The email, in part, read:

It’s been brought to my attention that when testing paying with mobile at Cafe 17 last week, some of you refused to install the PayPal app (!!?!?!!), and others didn’t even remember their PayPal password. That’s unacceptable to me, and the rest of my team, everyone at PayPal should use our products where available. That’s the only way we can make them better, and better.

Reactions in the Valley to the email ranged from supportive to outright dismissive.

“Yup — management by intimidation. Not a leader at all. Sure makes me want to use PayPal more often,” wrote VB reader Dawna Bate on a message board.

Marcus was PayPal’s mobile chief when eBay acquired his mobile payment startup, Zong, in 2011. In short order, he was quickly promoted to PayPal president in 2012. In that position, he pushed PayPal to dramatically accelerate its product development, which led to a PayPal mobile app and simpler tools for developers to integrate the company’s transaction technology.

In a blog post, Marcus expounded on his reasons for leaving PayPal for FaceBook:

I realized that my role was becoming a real management one, vs. my passion of building products that hopefully matter to a lot of people…..At first, I didn’t know whether another big company gig was a good thing for me, but Mark’s enthusiasm, and the unparalleled reach and consumer engagement of the Facebook platform ultimately won me over.

Without question, Facebook is hiring a major talent for its messaging team. And his upcoming presence suggests that Facebook intends to make money off messaging by bringing mobile payment functionality into the mix, right up Marcus’ alley.

Read Facebook’s announcement of his hiring here.

PayPal has seen some leadership shakeups and problems over the last several months.

Indeed, in early May, PayPal vice president Rakesh “Rocky” Agrawal, who served for just two months as the company’s director of strategy, abruptly left the company after he released a stream of highly offensive and baffling Twitter messages from Jazzfest in New Orleans calling PayPal executives out by name. Marcus implied in a post that he’d fired Agrawal; Agrawal insists he quit.

And earlier this month, PayPal’s respected senior engineering director April Chang announced she was bailing for a similar job at Eventbrite. Chang had been with the company since 2011.

The changes at PayPal have elicited speculation that there is tumult as the company attempts to grow its user base and focus more on individual consumers. The company was co-founded by Elon Musk, whose team sold it to eBay in 2002 for $1.5 billion.

VentureBeat reporter Mark Sullivan contributed reporting to this story.

More about the companies and people from this article:

eBay Inc. connects millions of buyers and sellers globally on a daily basis through eBay, the world's largest online marketplace, and PayPal, which enables individuals and businesses to securely, easily and quickly send and receive onl... read more »

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25 comments
Grace Chin
Grace Chin

I have always enjoyed articles from VentureBeat up till now. David, glad to see that eBay stepped out to clear you name. Wish you well at FB, love your passion for what your do!! I will have to look for more creditable sources for my tech news now. Suggestions anyone?

Nikki Kanter
Nikki Kanter

Maybe you shouldn't be so quick to call out people who were "fired"?

Dinesh
Dinesh

Write rumours about tech and companies if you must, not people. That's not nice.

Richard Vernadeau
Richard Vernadeau

An astute politician once put it this way: "Once the DENIALS begin, you KNOW they are lying."

Iva Bigun
Iva Bigun

 What's it gonna take to shake Donahoe out of the eBay corporate tree?

Byron Gn
Byron Gn

As long as a new CEO makes paypal suck less, nobody cares if he was fired.

Richard Vernadeau
Richard Vernadeau

With a petition circulating on the internet that has already amassed over 2,300 signatures asking for eBay CEO John Donahoe's resignation, why doesn't he simply resign? Donahoe is the source of virtually all of the major problems that eBay has experienced since his take over as CEO in 2008. Ina Steiner in her articles on EcommerceBytes.com has uncovered enough malfeasance and egregious actions by Donahoe and other eBay top brass to launch investigations and prosecutions. Why isn't that happening?

Philip Cohen
Philip Cohen

"Outgoing PayPal David Marcus was shown the door by eBay executives because his vision for the virtual-payment kingpin wasn’t working out, ..."

Huh? ...

Paul Mohme
Paul Mohme

Looks like that Rocky guy gets the last laugh.

Aamnah Akram
Aamnah Akram

fluff piece. two high-ups at PayPal officially deny him being fired. you have one source (not execS, just one) and you made an article of it. if they denied it, it doesn't matter.

Taso Du Val
Taso Du Val

This entire article states that he was not fired and quotes some anonymous source stating an opinion, where in the world does it empirically show he was fired? This seems extremely spun.

Van Mendoza
Van Mendoza

is that the mayor of Whoville from the Grinch?

John Doe
John Doe

Please dont l**k his a**

Iva Bigun
Iva Bigun

@Philip Cohen 

Marcus's employment and non compete contracts had expired. 

Nobody ever gets fired at ePal. They leave to spend more time with their families.

Iva Bigun
Iva Bigun

 Yeah, he probably got blasted after reading this article.

Philip Cohen
Philip Cohen

@Iva Bigun Yes, I recall that Hugh Williams left eBay “to spend more time with his family” ...

“In general, Williams advised sellers who want to be successful with eBay search that they 1) need to be found in search; 2) have someone click on their item and 3) sell that item. ...” - Hugh Williams (June 2013)

Is it any wonder that Hugh left “to spend more time with his family” ...

Regardless, I suppose the real test is if your personal belongings in your desk are thrown into a garbage bag and then they and you are frog marched off the premises by eBay security ...

Iva Bigun
Iva Bigun

@Philip Cohen 

Yes, I recall that Hugh Williams left eBay “to spend more time with his family” 

That was also Lorrie Norrington's line.

Every exec getting the bum's rush from ePal corporate appears to be very family centric.