[IP] Now Google Wants to be PayPal, Too.
Report: Google to Start New Payment System
Google Reportedly Preparing to Introduce Electronic Payment Service
to Rival PayPal
The Associated Press
Jun. 18, 2005 - Online search-engine leader Google Inc. is preparing
to introduce an electronic payment system later this year in a move
that would pose a financial threat to one of its biggest advertisers,
Internet auctioneer eBay Inc.
The Wall Street Journal reported Google's plans on its Web site late
Friday, citing sources familiar with the Mountain View-based
company's plans. The Journal did not provide any details about
Google's strategy.
A Google spokesman declined to comment on the report.
The likelihood of Google rolling out an online payment system to
rival eBay's popular PayPal service became a hot topic during an
Internet conference hosted Thursday by Piper Jaffray.
"It could be a pretty big negative for eBay if it happens," said
Piper Jaffray analyst Safa Rashtchy, who follows Google as well as
the Web's leading auction site.
PayPal accounted for $233.1 million, or 23 percent, of eBay's revenue
during the first quarter.
San Jose-based eBay bought PayPal for $1.3 billion in 2002. The
payment service makes money by collecting a fee from the transactions
that it helps complete. The electronic accounts are funded by credit
cards or banking account transfers.
Expanding into online payments might make Google less dependent on
advertising, which accounted for nearly all of its first-quarter
revenue of $1.26 billion. The merchants who run auctions on eBay are
major buyers of Google's ads, which appear alongside search results.
http://abcnews.go.com/Business/print?id=860148
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