Google CEO Admits E-Pay System Is In The Works; Rumored Plans Draw Mixed Response

Updated: Google CEO Eric Schmidt tells Reuters Google is developing an online payment system but not in direct competition with eBay’s PayPal unit. He said the Google system wouldn’t have money in its possession/control like PayPal. “The payment services we are working on are a natural evolution of Google’s existing online products and advertising programs, which today connect millions of consumers and advertisers.” Schmidt didn’t elaborate so a lot of the rampant speculation is bound to continue. Google already has said it plans to enable payment for some video content. …
Meanwhile, the responses to Google’s entry into the e-pay realm continue to roll in. EWeek sees symbiosis between Google’s AdSense micropayments and a PayPal-like system, raising the idea that people could maintain balances and use the money as if it were a checking or savings account. Take it a step further and they could use the funds to buy things via Froogle. John Pallatto writes: “Once such a system is in place, there really would be no limit to what Google could sell online. It already sells advertising placement on an auction basis. There is no reason why it couldn’t expand that into other goods as well.”

Bambi Francisco thinks the interest in Google Wallet is misplaced; the real focus should be on a possible competition with eBay should be on the classifieds/listings side. She also suggests it might not be a good sign for Google. “When eBay bought PayPal back in 2001, Wall Street saw it as a sign that the online marketplace operator was essentially saying that its auction business was slowing down. If Google were to launch a payment service business, it would suggest to me that Google, in like vein, would be admitting that its core advertising business is slowing down.”

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