eBay’s Paypal ready for a fight as Google’s GBuy launch seems imminent
Paypal, which many consider the crown jewel of eBay?s various business units, is about to get some major competition. The rumors about GBuy have turned out to be true and it seems like the launch will be sometime this month. Now, I am pretty sure GBuy will be available right away for Google?s Adsense and Adwords customers. They will probably even sign up some heavyweight retailers (Amazon.com anyone?).
All that is fine but the biggest threat for Paypal will come with the tie in of GBuy with Google Adwords. According to published reports, Google will allow consumers to pay for items or services when they click on Google Adwords ads, by putting a GBuy icon next to them. This will definitely be a major coup for Google as they have the most popular contextual ad platform in the business. But I hope you didn?t forget eBay just signed a deal with Yahoo where Yahoo will promote Paypal as a payment option. Are we going to see Yahoo do the same with their contextual ad program? Why not?
The other thing to think about is whether Google?s entry into this space is a good thing for Paypal. Will some healthy competition make Paypal?s creative juices flowing? Also, will GBuy expand the whole online payment system grow to new heights where both GBuy and Paypal benefit? Will eBay allow GBuy as an option in its auctions? Are we ready for micropayments?
Google?s last few product launches have been unspectacular to say the least. Google Finance is no where near as refined as Yahoo! Finance and all indications show that it hasn?t really taken off. We can say the same thing about Google Talk and Google Base. However, you can never right off Google and if anyone can compete against Paypal its Google.
Full Disclosure: I own shares of eBay
June 21st, 2006 at 8:41 pm
Hmm.. eBay isn’t sleeping either.. eBay is to launch a service rivaling Google’s Adsense.. it’s called eBay’s adContext: http://programmerassist.com/question/308
June 21st, 2006 at 9:04 pm
See my other article on that as well. The only thing is that as it stands right now, eBay new Adcontext service is not going to compete against Google Adsense. Since it won’t list third party advertisers but only Ebay auctions. Maybe they will consider that in the future.
July 27th, 2006 at 11:48 am
OFF TOPIC question about Ebay.
It is obvious now that a signifigant decline in Ebay stock price is related to the purchase of Skype. Do you agree?
Where is fair value for Ebay? Do you have estimates for the value of each of Ebay’s businesses?
July 27th, 2006 at 7:48 pm
I sort of agree. I think eBay bought Skype thinking it will help it keep high overall growth numbers but Skype really hasn’t helped. Yes, they keep adding subscribers like crazy but most of them don’t pay to use Skype. There is still some hope for Skype but not much. Management is not coming out and telling us how they plan to monetize Skype?
I am not worried about Google Checkout affecting Paypal. I think that had a huge part as well kicking Ebay down to these levels.
Fair value. I am really surprised that eBay has fallen so much. I remember reading somewhere that the average analyst price target for eBay is $39 and its trading at $23. All the big 4 internet stocks except Google seem to be in troube (Yahoo, Amazon and Ebay). Also Microsoft isn’t going anywhere anytime soon. I just don’t know what the bottom is for eBay at this point.
What do you think?
July 28th, 2006 at 7:17 am
the bottom for Ebay? I cannot even guess. However, I do know it will be lower. If I do somehow get a better indication I will let you know.