According to a report by the Wall Street Journal, Google is planning to launch an electronic payment service to compete with eBay’s PayPal. While officials from both companies declined to comment, the WSJ suggests that this payment service, code named “Google Wallet”, could be available as early as this year.
This move would help Google diversify its revenue base, which currently relies to 99% on advertising revenue. At the same time, this move would pose a serious threat to eBay. In this first quarter alone, PayPal generated 23.1% or $233.1 million of eBay’s revenue. Just over 70% of this revenue was generated through the use of PayPal for eBay auctions, the remaining 30% were generated by use of PayPal on other websites. Looks like the next competitive battle between giants may be underway.