EBay CEO John Donahoe provided a glimpse into PayPal's ongoing strategy for mobile payments in defending his company's conclusion that it should not spin off the subsidiary.

Investor Carl Icahn, whose companies acquired a 0.82% stake in eBay, has proposed that the e-commerce giant spin off PayPal to increase shareholder value. After considering the proposal, Donahoe made the case to investors that the companies are better off combined.

"No other payments competitor has achieved PayPal's success because no other competitor has a commerce platform like eBay," Donahoe said in a Jan. 22 conference call to discuss earnings.

In particular, PayPal gained an early boost in mobile because it was able to benefit from its connection to eBay.

"In 2010, PayPal generated approximately $600 million of mobile payments volume,  80% of which came from eBay mobile apps," he says. "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."

Spinning off PayPal would wipe out this momentum, Donahoe says.

"The distraction and disynergy of separation would be happening at exactly the wrong time. We're in this window of opportunity of commerce," he says.

Icahn also proposed nominating two of his employees to eBay's board. Donahoe said these employees would be held to the same standard as any nominees.

"Based on what we see today, we continue to believe the company, our customers and our shareholders are best served by keeping PayPal and eBay together," Donahoe says.

EBay data also makes PayPal better at risk management, says Donahoe. Separating PayPal would cut off its access to this data, he says.

EBay is planning some major investments in PayPal over the course of 2014. These will be focused on expanding its market into emerging economies, among other initiatives. The recent acquisition of mobile payments technology provider Braintree is an example of how eBay's funding is fueling PayPal's growth, Donahoe says.

"For more than 18 years the company has focused on enabling global commerce…and payments is an essential part of commerce," says Donahoe. "Everyone loves to shop but no one loves to pay."

For the fourth quarter, eBay's net revenue grew 13%, to $4.5 billion, from the same period a year earlier. EBay's net revenue increased by 14% to $16 billion in 2013 from the prior year. Its payments business' net revenue increased by 19% to $1.8 billion in the fourth quarter and by 19% to $6.6 billion for the full year.

However, eBay and PayPal's offline initiatives are advancing at a slower pace than predicted.

"Offline is taking longer to become digitized than we initially thought and I think, frankly, it's happening with us and with everyone else in the digital world," Donahoe says.