EBay's about-face to split its PayPal and marketplace businesses into separate publicly traded companies could make each of them eventual acquisition targets, analysts told CNBC on Tuesday.
Internet pioneer Steve Case told "Squawk Box" he could see one or both of them getting scooped up. The former AOL CEO added that the split, to be completed by the middle of 2015, should have happened years ago. "The payment space has been hyper-competitive. I think a separated PayPal will be more able to focus on that," he said.
Read MoreEBay, PayPal to split into separate public companies
Piper Jaffray senior research analyst Gene Munster speculated on how Alibaba might play a role. "The one element that this really opens up is the concept that Alibaba could purchase the [eBay] marketplace."
Alibaba—which just completed the biggest initial public offering ever at $25 billion—would more likely be after eBay's marketplace distribution in the U.S. instead of PayPal because the Chinese e-commerce giant has its own online payment arm Alipay, said Munster, who covers eBay.
Bob Peck, analyst at SunTrust Robinson Humphrey, agreed that both companies could ultimately be snapped up by larger players.
But in the near-term, he said, the split would allow eBay to focus on its marketplace business. "It's growing just a little below generally where e-commerce is. You got the core auction businesses. But it's really that omni-channel business that's the big future for eBay."
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Ebay boss John Donahoe will step down as CEO of once the split takes effect. Donahoe was the public face this year in eBay's bitter fight against activist investor Carl Icahn's push to break-up the company.
"I think there [was] probably some resistance to doing it just because pressure from the outside was telling you to do it," Case said. "I think when things calmed down they took at hard look at it and the market has evolved in a way that now makes even more sense."
But he said this capitulation doesn't give activist investors any more power. "I don't think automatically if somebody gets a stake and kind of starts beating the drum and saying something should happen that the boards or the CEOs should kind of lurch and overreact to that."
Devin Wenig, president of eBay Marketplaces, will become CEO of new eBay, while American Express executive Dan Schulman joins PayPal immediately as president and CEO-designee for PayPal post-separation. Donahoe and CFO Bob Swan will oversee separation and serve on boards of new independent companies.
"The payment space has accelerated in the last six months," Case said pointing to the recent Apple Pay announcement. "The big players—the Mastercard, Visa, American Express guys—are [also] getting more aggressive. The new start-ups [like Square] are getting more aggressive. It's a big opportunity but a big risk."
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"We recently downgraded eBay based on the competitive threat," said Munster, who also added that Google Wallet has been stepping up its game.