EBay has been adamant that its auction and payments businesses are best kept united, but if activist investor Carl Icahn succeeds in his mission to split off PayPal, eBay probably would not exit the payments business completely.

Without PayPal, "I would fully expect to see [eBay] immediately experiment with a de novo version of the failed Billpoint," says James Van Dyke, CEO of Javelin Strategy & Research. Billpoint was a joint venture of eBay and Wells Fargo that dissolved when eBay bought PayPal in 2002.

The trouble with the Billpoint model was, simply, PayPal was better. EBay has repeatedly tried to compete with payments businesses by creating its own version in-house, but time and again the company has admitted defeat and purchased its rival. Other examples include eBay's 2009 purchase of Bill Me Later and its 2013 purchase of Braintree.

"On the surface it may seem a bit odd for an auction company to own a global payments company," says Jordan McKee, an analyst at Yankee Group. "However, when you take a look under the hood the dynamics and synergies between the two organizations are undeniable."

Icahn did not return requests seeking comment by deadline, and eBay/PayPal would not comment. But from the beginning, eBay's top executives have said the auction and payments businesses are inseparable and provided evidence that they have benefited from being so tightly integrated.

"No other payments competitor has achieved PayPal's success because no other competitor has a commerce platform like eBay," John Donahoe, eBay's CEO, said in January. "In 2010, PayPal generated approximately $600 million of mobile payments volume,  80% of which came from eBay mobile apps. In 2013, three short years later, PayPal's mobile payment volume grew to $27 billion both on and off eBay. That's massive growth, a 45x increase in a three-year period and a leadership position in mobile payments."

Since eBay disclosed its dispute with Icahn during a Jan. 22 earnings call, the opponents have published numerous press releases and blog entries defending their positions.

In a March 6 press release, Icahn said a PayPal spinoff could allow two separate management teams to focus more closely on their core businesses and make better strategic decisions regarding the long-term health of each company. An independent PayPal could better attract talent and facilitate strategic partnerships with companies that may now be reluctant to do so due to competitive concerns with eBay, Icahn said.

Icahn, who is trying to alter the composition of eBay's board, also said it was an "epic blunder" for eBay's board to allow an investor group that included eBay director Marc Andreessen's venture capital firm to capture the lion's share of the financial benefit of Microsoft's acquisition of Skype at the expense of eBay's shareholders. Icahn added Andreessen has made investments and advised eBay competitors such as mobile payments provider Boku, the Bitcoin wallet Coinbase, mobile card payment company Jumio and mobile technology developer Dwolla.

EBay in late February issued a defense of its management and board, saying "Mr. Andreessen’s track record of creating value and driving innovation makes him an extraordinary asset on eBay’s board."

PayPal may be able to stand on its own. The payments company was profitable before the eBay acquisition, and has a number of options for future revenue expansion, says Penny Gillespie, a research director at Gartner.

"PayPal has been and is currently pursuing offline payments at the point of sale," Gillespie says. "PayPal is also a payment gateway, payment processor, payment service provider, a payment type and a digital wallet, so there are other opportunities that could be more aggressively pursued."

Today, PayPal's greatest growth potential comes not from auctions, which is a mature and steady business, but from challenging the large card networks and card issuer's retail and merchant payments businesses, Javelin's Van Dyke says. "By [hypothetically] removing PayPal's certain success with eBay, PayPal would be forced to focus primarily on taking on the banking payments networks," Van Dyke says. "It would be a huge threat to the banking payment franchise."

However, the PayPal of today has benefited from the numerous acquisitions eBay has made to bring on new talent and products. Notably, PayPal's president, David Marcus, joined the company via its 2011 purchase of Zong, which Marcus headed.

"Payments and commerce are becoming inextricably intertwined, and as a result, the benefits PayPal and eBay enjoy from their relationship will only increase," Yankee's McKee says. "This symbiotic relationship gives both entities a highly unique and advantageous position in the market the no other competitor enjoys."

Ultimately, eBay should be able to resist the pressure from Icahn, McKee says.

"I see Carl Icahn as merely a small thorn in eBay's side," McKee says. "While an investor like Icahn may have some degree of success steering the ship of a smaller company, it's far-fetched to think he will get his way with eBay."

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