Google is planning to create an online payment system that would act as a launchpad for a broader move into electronic commerce, according to reports yesterday.
Such a move would also intensify the growing competition between Google and eBay, whose PayPal payments system is the most widely used service of its kind on the internet.
Wall Street analysts Safa Rashtchy of Piper Jaffray and Mark Mahaney of Smith Barney reported they had heard of Google's plans, which have been rumoured in the past, through other e-commerce companies. The report first appeared on the Wall Street Journal's website late last week.
A Google payment service would provide further evidence that the company has its sights set on being far more than an online search engine, Mr Mahaney wrote in a report yesterday.
According to Mr Rashtchy, it would be an important part of a broader e-commerce "platform" from Google, aimed primarily at the many merchants who use the company's search engine advertising service to reach customers.
Ebay's shares slipped by more than 3 per cent early yesterday on the hints of new competition in one of its most promising businesses. PayPal accounts for about a fifth of the company's revenue and is set to grow in significance as more of the transactions on the online auction site are settled through the system, particularly outside the US where it is little used at the moment. - (Financial Times Service)
