posted on June 26, 2005 05:21:04 PM new
I've had a houseguest - did someone post this already - if so...NEVER MIND
Google Gunning for eBay?
By Rick Aristotle Munarriz (TMF Edible)
June 20, 2005
When Google (Nasdaq: GOOG) overtook eBay (Nasdaq: EBAY) earlier this year to become the Internet's most valuable stock, few figured that the search-engine king was preparing to take some more shots at the online auction house. Well, if a story first reported in Friday's Wall Street Journal holds up, Google is doing just that: It's reportedly getting ready to launch an online payment service -- its own version of PayPal -- later this year.
PayPal is a critical component of eBay's growth strategy. While eBay's stateside auction business slowed to a mere 20% top-line improvement this past quarter, PayPal came through with a 47% growth spurt. There are 71.6 million PayPal accounts out there, a number that compares favorably to the 60.5 million active accounts on eBay's namesake marketplace.
That's why eBay can't let PayPal fail, despite headier growth in its core auction business overseas.
Then again, one can argue that Google needs an answer to PayPal just as badly. A full 99% of the search star's revenue is tied to online advertising. Despite its lack of revenue stream diversification, it's doing a lot right within that niche to make investors rest more easily. But the company has a reputable connection with so many online users that it would be remiss not to branch out into web-based financial services.
This doesn't mean that PayPal's days as the king of pay are numbered. Established banking outfits like Citigroup (NYSE: C) and even Yahoo! (Nasdaq: YHOO) have tried -- and failed -- miserably. Even eBay couldn't topple PayPal when it hooked up with Wells Fargo (NYSE: WFC) to introduce Billpoint a few years back. That's why it eventually bit its lip and acquired PayPal three summers ago.
But won't Google's potential presence in online pay force PayPal to cut fees to remain competitive? And if so, won't that hurt eBay even if PayPal remains the top dog? Let's not rush to that conclusion. Despite cut-rate competition from the likes of Yahoo!, Amazon.com (Nasdaq: AMZN), and even Rule Breakers stock pick Overstock.com (Nasdaq: OSTK), eBay itself hasn't had to cut its auctioneering fees.
Then again, Google is special. Sure, the stock-picking graveyard is littered with the pompous souls muttering that "it's different this time," but, hey, it really is different this time.
Look beyond Google's search engine. Check out Google's mapping feature, or AdSense, or Froogle, or even its amazing aggregated news page. The company has a knack for successfully topping -- if not outright toppling -- the competition.
In the past, eBay has been able to acquire its headaches. Half.com? PayPal? Craigslist? Done, done, and partially done. Google is too big for eBay to buy. If this fight in pay does take place, man, is it going to be a good one.
Some other eBay-related links to check out as the company potentially braces for the Google onslaught:
The company's most recent quarter was a mixed bag of results.
eBay may still be a story stock worth telling.
You can also come over and share your thoughts on our eBay discussion
posted on June 26, 2005 05:35:16 PM new
well, neglus ... yes, this 'rumor' is out in the open on the media this week, but google is "unofficialy denying it" lol ....
time will tell ...
[ edited by estatesalestuff on Jun 26, 2005 05:35 PM ]
posted on June 28, 2005 12:04:37 PM newneglus Yes there have been long discussions on this board regarding this, but as someone else said, "Google" is denying that they are coming out with an on line payment (person to person) like PayPal - they have not denied that they are coming out with some type of payment program. IF it is at all near to being like PayPal, I'm off to "Google," I hate PayPal, especially since they were acquired by eBay, they have just gone down, and down hill in most areas, and up hill in being a pain in the derrière to work with.
I believe one thing, which sank eBay's "Bill Point," and Yahoo's "Direct Pay," and others is the lack of publicity, the lack of the general public knowing about the other methods of payment. I am sure if "Google" comes out with anything that will impact "PayPal," that it will publicized all over the place, and that is GOOD!
~"It does not matter what I think, it does not matter what you think. The only thing which matters is: What is the TRUTH!"~
