THE NEWS WRAP: Change of tack sees eBay spin off PayPal in reaction to rapidly changing payments space

eBay Inc has decided to spin off PayPal, a move it says will give the unit more flexibility to strike deals in the rapidly evolving payments space, Reuters reports.

The move comes as somewhat of a surprise. eBay chief executive John Donahoe had resisted shareholder activist Carl Icahn’s calls for a split earlier this year. Donahoe then led a month-long campaign to convince investors that eBay and PayPal should remain intact.

Donahoe says the company shifted its stance on the split in June after a six-month internal study of the payments landscape.

“We felt like a couple of things were changing,” he said.

“Most notably, the pace of change in this competitive environment, and payments and commerce is accelerating and will continue to over the next three to five years.”

He says both PayPal and eBay would have more focus, flexibility and agility as a result of the split.

Reddit raises $50 million

Social networking and link sharing site Reddit has raised about $50 million in funding, Re/code reports.

The round was led by Y Combinator president Sam Altman. He and other investors plan to allocate 10% of the equity they are buying to Reddit users.

Other investors include Andreessen Horowitz and Sequoia, Peter Thiel, Ron Conway, Paul Buchheit, Jared Leto, Jessica Livingston, Kevin and Julia Hartz, Mariam Naficy, Josh Kushner, Calvin Broadus Jr (Snoop Dog) and Yishan Wong.

Windows 10 previewed

Microsoft has given the world its first look at its new operating system, Windows 10.

As expected the Start menu is back, providing one-click access to the functions and files that people use most, and it includes a new space to personalise with favourite apps, programs and websites.

Other features include apps that run in a window, snap enhancements to make working with multiple apps at once easier, a new task view button and multiple desktops.

Overnight

The Dow Jones Industrial Average is down 28.32 to 17,042.90. The Australian dollar is currently trading at US88 cents.