Carl Icahn says eBay should sell off PayPal, to better unlock value for shareholders.

Icahn wants eBay to spin off its fast-growing payments-processing arm, PayPal, which it bought for $1.2 billion in 2002. PayPal took in $1.84 billion US last quarter, more than 40 per cent of the entire company's revenue.

The company has even started making inroads with conventional retailers, offering payment options beyond the digital world.

Icahn thinks both companies would be better off if eBay sold PayPal to act as an independent company, and gave the proceeds to shareholders.

He took a small stake in eBay in January and has been pitching management on his ideas ever since. On Monday, he upped the pressure significantly, going directly to shareholders with a public letter to the company's management in which he says the "complete disregard for accountability at eBay is the most blatant we have ever seen" and called out two directors and the CEO specifically for "lapses in corporate government."

He singled out two board members in particular and accused them of acting against shareholders' best interests.

Scott Cook, the founder and former CEO of Intuit Inc., is a current board member for both companies. Icahn questioned Cook's involvement on the eBay board, saying that Intuit and PayPal are direct competitors.

Icahn also questioned Marc Andreessen's loyalty to eBay, claiming he was able to achieve significant personal financial benefit from buying large stakes in two former eBay subsidiaries.

EBay said Cook, Andreessen and Donahoe were unavailable for individual comment. But in a statement, the company said its board is "scrupulous in its governance practices and fully transparent with regard to its directors' other affiliations and businesses."

The board looked into Icahn's suggestion when it first came up in January and rejected it.

Stifel Nicolaus analyst Jordan Rohan said he believes Icahn's attempts for the spinoff won't go anywhere.

"The entire board believes whole-heartedly they're acting in the best interest of shareholders," to keep PayPal part of eBay, he said.

EBay shares were up more than three per cent to $56.46 on the Nasdaq on Monday.

With files from The Associated Press