Google planning PayPal rival

Monday, June 20, 2005

Financial analysts say Google is planning an e-wallet service that could eventually compete with eBay’s payment service PayPal. Google has not confirmed the development.

The rumor is a first sign of Google’s expected expansion of revenue sources to capitalize on its advertising customer base and search-engine traffic. What form that expansion will take has been a hotly debated subject for the company whose stock valuation momentarily made it the world’s biggest media company on June 7, 2005. Even Microsoft has been mentioned as a possible future competitor.

Ebay’s stock valuation dipped more than 2% on the news. Paypal currently accounts for one-fifth of the company’s revenues. But one business analyst saw potential benefit for Paypal[1], depending on exactly how the “Google Wallet” takes shape. The uncertainty underlined the lack of substantive information behind the rumor.

According to the New York Times, the CEO of a major online merchant, who spoke on the condition of anonymity, was approached by Google to take part in this service. Steve Langdon, a Google spokesperson, declined to comment.

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