Chill out!!

Wednesday, June 22, 2005

Google CEO Says Google Won't Compete With PayPal

Google Inc. CEO Eric Schmidt on Tuesday denied recent media and analyst reports that the online search engine leader is gearing up to compete directly with eBay Inc. EBAY's pioneering PayPal service, although he acknowledged some kind of electronic payment product is in the works.
Although he declined to provide any details about the project, Schmidt made it clear it won't trespass on PayPal's turf.
"We do not intend to offer a person-to-person, stored-value payments system," Schmidt said during an interview with The Associated Press.

That description fits PayPal, a 6-year-old service that creates "digital cash" by accepting credit card payments from its users and then delivering the payments to a designated recipient. The recipient then can either get real cash or leave all or part of the balance in a PayPal account for future transactions.

As e-commerce has blossomed, PayPal has thrived, growing from 24 test users in 1999 to 72 million accountholders through March. Looking to profit from the fees that PayPal collects from completing online transactions, San Jose-based eBay bought the service for $1.3 billion in 2002.
The Internet industry began buzzing about the possibility of Google competing with PayPal after the subject surfaced last week during an e-commerce conference hosted by Piper Jaffray. The Wall Street Journal subsequently reported Google hoped to roll out a rival payment service later this year, quoting people familiar with the company's plans.