The Wall Street Journal reported (registration required.) on Friday that Google is looking to extend it’s revenue streams beyond advertising by starting an online payment system similar to and in competition with Paypal Inc.
No details were revealed about Google’s plan for this, but it seems likely that Google would want to create streams of revenue in addition to their advertising systems as everyone knows not to put all their eggs in one basket. Paypal don’t really have any international competition for their services so having Google compete with them will be good for both webmasters/storeowners and users alike.
The news does not bode as well for Ebay though as their Paypal unit accounts for a significant portion of their earnings. Obviously only time will tell how Google’s service will differentiate itself from Paypal’s but there is no doubt that Google will be the underdog in this market at least initially as Paypal have a huge head start and have millions upon millions of users already signed up for their service. That said however, Google showed with Gmail that they have the ability to create a revolutionary service that takes the industry by storm and to market that service in a way that competitors like Paypal can’t. In fact Ebay is a big advertiser utilizing Google’s Adwords network so the competition may actually hurt Google’s advertising revenue to some degree. Time will tell.
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The rumours have been confirmed.
