EBay and PayPal have announced that they will become separate companies in 2015, to enable each to focus on their respective business operations without being hindered by the other. Shares in eBay rose in response to the news.

As part of the deal current CEO John Donahoe will step down, to be replaced by two new individuals.

Donahoe said the decision had been reached by the board of the company as it became clear that while being one single company had worked well for years, there were too many differences now.

“A thorough strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively,” he said.

“The industry landscape is changing, and each business faces different competitive opportunities and challenges. We believe eBay and PayPal will continue to do so as separate, independent companies. Tremendous opportunities exist for each business.”

He said that as single companies they could pursue their own opportunities as required, without having to factor in any impact on the other business.

Dan Schulman will become the president of PayPal, effective immediately, and the designated CEO of the standalone PayPal company once the split takes place.