Google to offer Google Wallet online payment service - update 3

06/21/05 - newratings.com

NEW YORK, June 21 (newratings.com) – The Wall Street Journal reported Sunday that search engine company Google (GOOG) plans to launch PayPal-like online payment services code-named, Google Wallet, by the end of this year.

Mountain View-based Google aims to offer online payment services in order to expand its presence in the online market and to diversify its revenue base. By offering a service similar to eBay's (EBAY) PayPal, Google is at risk of losing one of its largest customers. eBay currently advertises heavily on Google. San Jose-based eBay acquired PayPal for $1.3 billion in 2002. According to Piper Jaffray's Internet analyst, Safa Rashtchy, Google is likely to launch its Google Wallet online merchant payment service by this holiday season. Although Google is unlikely to compete directly with PayPal, it would limit PayPal's expansion beyond eBay, Safa Rashtchy added. Google's share price rose $6.40 or 2.3% to $286.70 on the Nasdaq on Monday. eBay's share price fell $0.81 or 2.1% to $37.24 on concerns of competition from Google.