Activist investor Carl Icahn stepped up his attack on eBay Inc. on Monday, accusing the online retailer of overlooking conflicts of interest on its board in what amounts to a broadside against a common practice in Silicon Valley. 
 
 Mr. Icahn said two long-serving directors, venture capitalist Marc Andreessen and Intuit Inc. founder Scott Cook, were conflicted because of other business interests. Mr. Icahn, who disclosed a 2.2% stake in... 

 Carl Icahn has fired another shot in his battle to force eBay to spin off its fast growing PayPal division. 
 
 In an open letter to shareholders, Icahn accuses eBay’s board, namely VC Marc Andreessen and billionaire Scott Cook, of placing their interests ahead of shareholders, and competing directly against eBay. Says Icahn: “We have found ourselves in many troubling situations over the years, but the complete disregard for accountability at eBay is the most blatant we have ever seen.” Icahn also attacked eBay CEO John Donahoe calling him “completely asleep or, even worse, either naïve or willingly blind to lapses by the board." 
 
 Icahn, who owns about 2% of eBay shares, and is pressing for two board seats (adding Icahn Enterprise employees Jonathan Christodoro and Daniel Ninivaggi) and for eBay to spin off its PayPal unit in an IPO. As he told me last month: “I don’t think eBay is a well-run company. When the tide is rising high, everyone looks good. Just compare eBay to Amazon. PayPal is a jewel, and eBay is covering up its value… If you just went out and took it public you’d get a huge premium because of growth.” 
 
 Icahn is not alone. PayPal cofounder Elon Musk agrees PayPal should be independent of eBay. As Musk said the recent FORBES cover story: “It doesn’t make sense that a global payment system is a subsidiary of an auction website… It’s as if Target owned Visa or something.” Musk went on to say that PayPal “will get cut to pieces by Amazon payments or by other systems like Apple and by start-ups if it continues to be part of eBay… It will either wither or be spun out…Carl Icahn can see it, and he’s not exactly super tech savvy.” 
 
 David Sacks, the former PayPal COO who went on to start Yammer, agrees too. Musk and Sacks think that a standalone PayPal could eventually top a $100 billion valuation. Says Sacks: “If you allowed PayPal to pursue its destiny there are moves it could make to become the largest financial company in the world.” 
 
 Ebay CEO John Donahoe told me that Ebay and PayPal are better together: "Ebay has accelerated and enhanced PayPal's success, allowing it to be more aggressive, bolder and to take more risk than if it was separate." PayPal President, David Marcus, echoed Donahoe's thoughts: " We are growing faster in this configuration than we would in any other." 
 
 Icahn quotes Musk and Sacks heavily in his shareholder letter to persuade shareholders to spin off PayPal. He’s also attacking eBay’s corporate governance in the hopes of obtaining his board seats. Here’s Icahn’s case. (Full disclosure: two of my FORBES stories are referenced in Icahn’s letter.) 
 
 Alleged Andreessen Conflicts 
 
 Marc Andreessen, while a member if eBay’s board, was part of the buying group that took 65% of Skype off eBay’s hands in 2009 for $1.9 billion (and valued Skype at $2.75 billion). Eighteen months later Microsoft bought Skype for $8.5 billion—about a 300% gain, a gain that Icahn thinks should have went to shareholders. 
 
 In September 2009, an investor group that included Mr. Andreessen, preempted a planned Skype IPO (in which stockholders would have ended up making multiple billions of dollars) and bought 70% of Skype for less than what eBay had paid to acquire it(1). Mr. Andreessen basked in the purchase, saying that “Skype is the archetypal phenomenon: a breakthrough technology”(2). His partner was even more excited, stating that “Skype is on its way to becoming one of the most important companies in the world”. One cannot help but wonder what happened to Mr. Andreessen’s fiduciary responsibility to share his feelings with Mr.Donahoe and the board rather than preempt the planned IPO to further his own interests. A mere 18months later, Mr. Andreessen’s investor group flipped Skype to Microsoft for $8.5 billion, a value three times what they paid for it, netting approximately $4 billion at the expense of eBay stockholders. After the sale to Microsoft, Mr. Andreessen, a sitting eBay Board member and fiduciary to tockholders, stated: “one reason we were enthusiastic about buying Skype was that even though we thought it would be a tremendous standalone business, we also knew that for Microsoft and a number of other companies Skype would be an obvious thing to buy. We knew we’d always have the fall-back of selling to strategic buyers”. Did Mr. Andreessen share this strong view with Mr. Donahoe? Was Mr. Donahoe completely asleep, or even worse, so naive and deferential to his “world-class board” that he allowed a sitting board member and several private equity firms to walk away with over $4 billion in what was essentially stockholder’s money after a sale to a strategic that he obviously should have orchestrated himself? Many others have been vocally critical of the Skype transaction, but, until now, none have taken on the task of standing up to Mr. Donahoe and this board. 
 
 Icahn accuses Andreeseen of doing that same thing with eBay’s sale of Kynetic after the purchase of GSI Commerce: 
 
 In March 2011, as part of eBay’s $2.4 billion acquisition of GSI Commerce, the eBay Board decided they no longer wanted the Kynetic portion of GSI Commerce and sold it back to the company’s founder for just $31 million in cash and a $467 million sellers note at below market interest. In June 2012, Mr. Andreessen pounced, making a $150 million investment in Kynetic at a $1.5 billion valuation, leveraging the low sale price and below market financing which the eBay Board had recently approved. Just a year later, Kynetic was valued at $3.1 billion, giving Mr. Andreessen a paper gain of more than 100%. 
 
 Icahn accuses Andreesseen of Funding competitors 
 
 Additionally, during Mr. Andreessen’s time on the eBay Board – a time when he has been privy to nonpublic eBay Board information – he has made investments in and actively advised, no less than five direct competitors of eBay (four of which are competitors of PayPal), including Boku (mobile payments platform), Coinbase (Bitcoin wallet), Dwolla (secure online money management), Jumio (online and mobile credit card payments) and Fab (design e-commerce). How can Mr. Donahoe and the eBay Board allow Mr. Andreessen to advise these competitors while he simultaneously possesses not only nonpublic eBay Board information but also intimate proprietary information about PayPal’s operations? But perhaps more importantly, how can Mr. Andreessen be trusted to objectively advise Mr. Donahoe and the eBay Board about the strategic direction of PayPal when he has vested interest in so many of its competitors? 
 
 Alleged Scott Cook Conflicts 
 
 Board member Scott Cook is the founder of Intuit, which competes with PayPal in some markets—it’s Intuit Go-Payment card readers competes with the PayPal Here product. Icahn highlights this plus a DOJ antitrust complaint where Cook asks eBay not to recruit any Intuit employees. Says Icahn: 
 
 Mr. Cook has retained almost $1 billion of Intuit stock (~100x the $9 million of eBay stock he owns). Intuit and PayPal are direct competitors in payment processing as Intuit Go-Payment provides virtually the same capabilities to merchants as PayPal Here. How can the board have a conversation about the strategy or performance of PayPal when a representative of a direct competitor who has so much at stake is in theroom? Even worse, Mr. Cook also apparently believes he can tell eBay whom the company cannot hire. Unbelievably, according to a pending DOJ complaint, “eBay ultimately agreed to an expansive no solicitation and no-hire agreement in large part to placate Intuit’s Mr. Cook, who was serving as a member of eBay’s Board of Directors and who, at the same time, was making several complaints on behalf of Intuit about eBay’s hiring practices”. Furthermore, according to the complaint, in an effort to placate Mr. Cook, eBay instructed its employees not to pursue potential hires from Intuit and to discard their resumes. Is Mr. Cook wary of how a standalone PayPal could impact the company he founded? Is he worried that it would diminish the value of his $1 billion in Intuit stock? 
 
 Criticism of eBay CEO John Donahoe 
 
 Icahn accuses Donahoe of complacency and under performance.
– EBay's board is so rife with conflicts of interest that Carl Icahn penned a scathing open letter today, escalating his campaign to force the online auctioneer to spin off PayPal. Icahn bought a 2% stake in eBay last month, and had been preparing to fight for two board seats, the Wall Street Journal reports. But after doing his research, he believes that he shouldn't have to fight, because "in any sane business environment, these directors would simply resign … either out of pure decency or sheer embarrassment." Icahn singles out Marc Andreessen and Scott Cook as having business interests in eBay's competitors and taking actions detrimental to the company, and accuses CEO John Donahoe of enabling them. "The complete disregard for accountability at eBay is the most blatant we have ever seen," he writes. EBay responded to the attack by saying that Icahn had "cherry-picked old news clips" to unfairly attack "two impeccably qualified directors." Icahn's letter also notes that former PayPal architects Elon Musk and David Sacks agreed that it should split from eBay. "It's as if Target owned Visa or something," Musk recently told Forbes.