Published On: Tue, Jun 10th, 2014

David Marcus Quits As President Of PayPal Joins Facebook Instead

EBay To Buy Mobile-Pay Service Zong For $240 Million In Cash

 

David Marcus is quitting his job in San Jose as the President of PayPal, on June 27th. Instead, he will be moving over to Facebook’s pad in Menlo Park where he will run Facebook’s messaging products. This is an area where it seems Mark Zuckerberg is serious about dedicating massive resources to making it a success.

As a serial entrepreneur to his roots, Marcus had been trying to radically change the culture at PayPal since taking the President’s job at there in 2012. He arrived at eBay, PayPal’s corporate parent, when eBay’s CEO John Donahoe triggered the acquisition of Marcus’s start-up Zong for US$240 million in 2011. Donahue later asked Marcus to run PayPal’s President with the instruction to turn it upside down.

As a long running success story in the early days of electronic payments, PayPal had become too big, too fat and too lazy – all things anathema to your average entrepreneur, and especially to someone as rich personally as Marcus had now become.

As Marcus himself is pointing out on his own Facebook page today: “Going from managing a few hundred people at best in my entrepreneurial career, I suddenly found myself leading 14, 000. The first year took its toll on me. It was hard. The second year started becoming more “natural”, and as we made progress on a number of fronts: technology, product, marketing, sales, and more importantly culture. 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. So after much deliberation, I decided now is the right time for me to move on to something that is closer to what I love to do every day.”

Fair enough, though it seems very much to be PayPal’s loss and Facebook’s gain. Marcus is turning up at Facebook just as its relatively new Messenger product has reached the level of about 200 million monthly active users, who collectively send 12 billion messages every day.

Zuckerberg’s goal is to make this continue to grow and then somehow to make money for Facebook from it. The app is completely free, however and currently carries no advertising. Even WhatsApp, which Facebook paid a massive US$19 billion for, already makes some money selling subscriptions or by offering additional features.

Announcing Marcus’s appointment in a blog posting Facebook said simply, “We’re excited by the potential to continue developing great new messaging experiences that better serve the Facebook community and reach even more people, and David will be leading these efforts.”

As a builder, rather than a manager, Marcus now gets to play in his own sandbox again. He clearly knows a lot about payments, which is still the hot space to be in, moving forward. Everyone in it, from Google to Apple and the credit card companies, are all circling around what is going on carefully, waiting to pounce.

To build a payments system right on top of a messaging product, therefore, well why not?

About David Marcus

David Marcus was born in Paris, France, but grew up in Geneva, where he attended the University of Geneva for just a few terms, before dropping out to pursue an ambition to become an online entrepreneur.

His first startup, GTN was launched in 1996 when Marcus was just 23. In the space of just four years, Marcus grew GTN to become amongst Switzerland’s leading alternative telecommunications carriers before it was acquired by World Access in 2000.

David Marcus’s next major venture was Zong, which opened in 2008 when he was already living in Silicon Valley, on the US West Coast.

Zong was based on a concept that allowed consumers to pay quickly and conveniently through entering their mobile phone number with the transaction being charged to their wireless account. PayPal like the concept so much they acquired, Zong in 2011 for US$240 million. They acquired him too, and he became the President of PayPal in 2012.

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