Google-eBay Rivalry Heats Up - The War Escalates
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When Google introduced Checkout, eBay immediately refused to allow it to be used on its site, citing phishing and fraud concerns. At that time, at least, eBay could argue that Google Checkout was an untried service, and it had forbidden its use out of concern for the security of its customers. Google, for its part, probably alienated eBay further by doing what you would expect it to do when introducing a new product: it undercut its rival’s (PayPal’s) transaction fees, and tried to lure consumers with cash bonuses.
Clearly, eBay couldn’t take this laying down -- not just because PayPal was such an important part of its company, but because it stood to be an even more important part in the future. PayPal is currently growing faster than eBay’s traditional auction and shopping business. In fact, Ray Dutta, the former eBay CFO who oversees PayPal, has stated publicly that he is “convinced that PayPal is one day going to be bigger than eBay.”
Meg Whitman, eBay CEO, also realizes PayPal’s importance to the company. Though she has claimed not to be worried about Google Checkout, she noted to the Associated Press that “We’re defending ourselves aggressively with PayPal. That is one of our core businesses.” Alluding to the fact that Google is a search engine, so its interest in online payment systems seems peripheral to its natural focus, she said that “We’re not going to let that go away to someone who’d kind of like to be in the business.”
This brings us up to date. Every year, eBay holds a user conference called eBay Live; this one was scheduled for Boston. Just before it was about to start, Google announced that it would be holding a party in Boston, too, very close to where eBay Live would be held. Google’s party featured free shuttle rides from the eBay Live conference to the party, located at Old South Meeting House. Significantly, this was one of the places where the Sons of Liberty met during the Revolutionary War; it’s significant because Google was calling its party “Google Checkout Freedom Day” and using it to advocate that eBay allow its users to use Google Checkout on the site. Additional party attractions included free food, free drinks, free live music and free massages.
Next: EBay Strikes, Google Blinks >>
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