Is PayPal gearing up to fight Google's Checkout?

Posted Jul 11th 2006 3:03PM by Michael Fowlkes
Filed under: Good news, Press Releases, Internet, Blogs, Competitive Strategy, Google (GOOG), eBay (EBAY)

The last couple of weeks have been pretty hard on eBay (EBAY). The company's subsidiary PayPal has been at the heart of much of the talk surrounding the company with two major developments coming as of late.

First Google (GOOG) announced the release of its online payment system, Google Checkout, on June 29 which many think prove to be major competition for PayPal and then shortly afterward eBay announced the departure of Jeff Jordan, who has led its PayPal business since 2004.

At the time of the Checkout announcement eBay denied any sort of statement, only saying that they felt that the company was in good hands and that they would not comment on any actions taken by its competitors. This is not the sort of reaction that investors typically like to hear from a company.

In fact, through last night's close the stock had fallen 7.5% since the Google announcement.

Today it looks like eBay may be gearing up for a fight. The company announced plans to open a new facility in Scottsdale, Ariz. that will employee hundreds of technical workers. No official date has been set for the opening, but the company plans to hire workers over the upcoming 12 months. Maybe this is just what the company needs to improve PayPal and gear up for the new Google competition.

Shares of eBay (EBAY) have risen 3.0% to $27.79 up $0.81. On the day Google (GOOG) is up 1.2% to 423.28 up $5.08.

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