The battle between eBay and investor Carl Icahn continued Monday, with the company rejecting his two nominees to the board and urging investors to vote them down.

The nominees are two Icahn Enterprises LP employees, David Ninivaggi and Jonathan Christodoro. Richard Schlosberg III, head of the company’s corporate governance and nominating committee, told news media that “neither nominee has relevant experience or expertise.”

Both men, regularly nominated by Icahn for boards, already sit on four boards of public companies, and eBay said this violated their guidelines.

Icahn, who holds 2.15 percent of eBay, has been pressuring eBay to spin off its PayPal electronic payments business and has attacked the Board’s handling of its sale of Skype.

In his latest open letter, Icahn said today that eBay CEO John Donahue was guilty of “inexcusable incompetence,” and that eBay was on its way to becoming another great brand name that withered – like BlackBerry, Eastman Kodak, Polaroid, Palm, and AOL.

The eBay Board said today that it “has carefully considered [the Icahn proposal to spinoff eBay] and has unanimously agreed that spinning off the Payment segment (PayPal) into a separately traded public company would not be in the best interests of eBay or its stockholders.”

The statement added that such a proposal “is not a new idea to the board or the company,” but the assessment has been that “each of the company’s payments and commerce segments are stronger together than apart.” Last year, about 40 percent of eBay’s total revenues came from PayPal.

“PayPal has tremendous value,” Forrester retail analyst Sucharita Mulpuru told VentureBeat, “and I can see both sides.”

She added that PayPay is the “growth engine of eBay and accounts for the vast majority of eBay’s valuation.”

From a shareholders’ point of view, Mulpuru said, spinning off PayPal would unlock its value. But losing PayPal – and continuing this proxy fight — could also affect the remaining eBay assets and strengths, such as eBay Enterprise‘s ability to instill confidence and close deals for commerce technologies.

If PayPal split off, she predicted, “The eBay site itself would continue to exist, but that marketplace is mature, and they’re losing market share to Amazon.”

VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Discover our Briefings.