PayPal president joins Facebook. Why the move?

PayPal president David Marcus is leaving to head up mobile messaging at Facebook. The transition represents Facebook's aggressive shift toward stand-alone mobile apps. 

Ben Margot/AP/FILE
Facebook CEO Mark Zuckerberg gestures while delivering the keynote address at the f8 Facebook Developer Conference in San Francisco April 30. PayPal president David Marcus will join Facebook as Vice President of Messaging Products.

Facebook is showing no signs of letting up in its pursuit to win the mobile arms race. 

The company announced June 9 that David Marcus, the current president of PayPal, will be joining Facebook as vice president of messaging products. In a LinkedIn blog post, Mr. Marcus explains that despite a positive experience at PayPal, the experience was not as hands-on as he would have liked. 

"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," Marcus says in the post. 

Still, why leave a position at one tech giant to take what might seem like a lesser position at another? Well, top-tier innovators like a challenge. And even if their move might not make sense from a safety or security perspective, that's not necessarily important. What matters, rather, is the ability to flex their muscle and to step up to a challenge, says William Barnett, professor of business leadership, strategy, and organizations at Stanford University. 

"Highly qualified leaders in Silicon Valley are constantly looking for challenges that can test their mettle," Mr. Barnett says. "A move like this isn't about security. It's about challenge. They want to have a challenge, even if there are big risks associated with that challenge. [Marcus] is a big-league leader and this is going to test whether he's up to the task."

This move is one of a series of steps that Facebook has taken in recent months to build on and enhance its mobile applications. 

According to a statement on Facebook's site, about 12 billion messages are sent on Facebook each day and Facebook mobile messaging is used "by more than 200 million people every month." The social networking giant's fourth quarter 2013 financial results showed that ad revenue from mobile messaging was $2.6 billion, comprising more than half of the company's total ad revenue at 53 percent and beating out desktop ad revenue for the first time. Moreover, the company's first quarter 2014 results reveal that mobile advertising jumped to 59 percent of total ad revenue. This steady increase accounts for the company's decision to continue to split its mobile app into a series of stand-alone apps. 

"Connecting everyone means giving the power to share different kinds of content with different groups of people," Facebook chief executive Mark Zuckerberg said during a conference call with analysts discussing the fourth quarter results. "This is something we focused on by launching separate mobile apps beyond the main Facebook app – Messenger and Instagram are great examples of this."  

Examples of Facebook's app splintering include the release of Paper, an app that curates newsfeed content, and its recent acquisition of WhatsApp for $19 billion of cash and stock.

Further, in an effort to push users toward the Messenger app, Facebook will discontinue its messaging service within the main Facebook app, prompting users instead to either use or download the separate Messenger app. And as TechCrunch recently observed, Facebook's accidental premature release of a new app on June 9 called Slingshot demonstrates that the social-networking titan is taking on Snapchat with a service designed to let you share photos with friends with the option of deleting them forever.  

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