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EBay & Co. See Growth In User Base. Yahoo Is Awarded a Patent for a Peer to Peer Payment System

A Red Herring story talks about a 24% increase in earnings for eBay this year compared to same period last year. The article has some interesting subscriber numbers for the group's three pillar businesses: marketplaces, communications, and payments:

• eBay's user base jumped to 192 million from 147 million a year ago (this does not include the other smaller marketplaces owned by the company)
• Skype has 94.6 registered users
• And finally PayPal's registered users crossed the 100 million milestone to reach 105 million from 71.6 million same time last year.

In other news bloggers are reporting that Yahoo! yesterday was awarded a patent that seems awfully similar to PayPal. The invention covers "Systems and methods for implementing person-to-person money exchange".

People are speculating that this might herald a new entrant (or re-entrant) to the online payments field. But the patent was filed 6 years ago in August 2000 and therefore I tend to think that it tells us little about the company's current plans and more about their strategy back then.

Also the fact that it took 6 years to get the patent either points to an inefficiency on the part of the USPTO, the agency responsible for awarding intellectual property rights, or an overambition on the part of the patent filers. In the latter case Yahoo lawyers/engineers would have started out with a filing that covered too much and then had to take their filing documents back and forth removing or rewording some claims until the patent agent finally agreed that Yahoo's described peer to peer payment system is actually novel, useful, and nontrivial.

Whatever it is, you can get it on Google

Soon after Google released its Google Maps application Paul Rademacher hacked through its code and created HousingMaps, a website that integrates Craigslist with Google Maps. Google liked Paul's work so they hired him and released a public API to enable other people to create similarly useful mashups. The move unleashed a ton load of creative work most of which is documented on the blog Google Maps Mania. Today this same blog highlighted a new Google Base service that lets users search for apartments with the help of maps. The site is very similar to Paul's original HousingMaps with the only difference that it incorporates a multitude of small housing databases including sites like Citi Habitats, Postlets, and GothamMarket -- but not bigger databases like eBay or Craigslist.

Should eBay make its listings available on Google Base?

One argument says that everyone should opt in to Base because the move would generate leads and drive traffic to one's site. A small company like Postlets would get the extra exposure that it needs to get off the ground and gain a following. A big league company like eBay is already spending a considerable budget on paid placement ads and would also benefit from some free exposure.

But let's look at the issue through a different lens. In European and Asian countries it's common to hear people say "MSN me". In that part of the world MSN Messenger is synonymous with instant messaging. Here in North America people say "Google it". Google is synonynous with search. Similarly, people also say "I got it on eBay". eBay is for many the first thing that comes to mind when someone wants to sell or buy online. It's sort of like a Pavlov reflex at the level of society.

Now take this scenario. eBay particiaptes in the Google Base program. eBay listings start to appear on Base. Consequently potential buyers would start to realize that it might make more sense to look for items on Google Base because the service gives access to ebay as well as other smaller marketplaces. In other words the eBay offering would become a subset of Google's. All other factors being equal, I would prefer to go shopping in the supermarket that offers more products from more suppliers. Three or four years into the game people's attitude toward eBay would change. And Google would replace eBay as the first place that people go to to buy things.

There is also another reason why eBay would want to say no to the search company. As a rule of thumb cobranding benefits the lesser known brand. Google is a top global brand but when it comes to listings eBay by far dominates. An association between the two companies would benefit the newcomer to the listings industry and not the world's online marketplace.

Eric Schmitt Hints that Google Payments Might Add eBay's PayPal as a Payment Option

As many of you are aware, Google invited market analysts to their headquarters for the Google Analyst Day event that took place about three weeks ago.

There were a lot of intersting discussions that took place. But when it came to payments Eric Schmitt was the one fielding most of the questions. He was constantly reiterating that GPay (as he calls it) is not made to compete with PayPal or to replace existing peer to peer payment systems but that it's meant to be a new solution to a new problem.

He even went as far as saying that it will make sense at some point to add PayPal to Google's payment service.Here's the transcript:

Analyst: Bill Shatner from UBS -- First of all I would like to thank you for acknowledging and answering most of the 23 questions.

Schmitt: I think you're being too generous. I read your questions and I am not going to answer most of them in much too detail. [laughs]

Analyst: Alright so one more follow up that is a little more detailed.

Schmitt: Ok go ahead.

Analyst: On payments; I actually used it to purchase something from a Google employee through Google Base. And it doesn't allow you to use PayPal as an option  (only credit cards). That kind of goes against  [Schmitt interrupts]

Schmitt: By the way it makes sense to add PayPal at some point [...] That's a good user request. Our first Google Base Customer.

eBay Opens Up to Paid Content

Mara Holian from eBay product marketing mentioned that eBay is releasing a new feature that lets customers buy and sell digital items.

The new feature lets sellers select what type of item they want to sell. If they choose 'digital item' then the shipping fields do not apply anymore. Instead the seller can write a small message telling the buyer how to access the file once the payment is complete.

Here are two other features taken straight from Mara's post:

• Search filter for digital items in certain categories – Buyers in categories that are more likely to feature digital items (such as Movies and Books) will be able to filter their results to see just the digital items that meet their search criteria.
• Digital Information Box on the item page – On listings for digital items, a new information area will help buyers identify digital items, confirm the file type and learn about any system requirements they will need.

I think that's an interesting step forward for the auction giant. Here's more about eBay digital items.

I talked to people at PayPal about a year ago to learn more about their policies concerning digital items. The impression I got at that time was that they weren't very cheerful about it since they had no way to know for sure if buyers received the items they paid for in case of a dispute.

Earlier this week I had written a post about how Google Video is going to start accepting payments for premium videos. I expect that to happen once the Google Payments service is out.

PayPal & Skype, Google Payments & Google Talk

John Battelle's Searchblog mentions that in a recent presentation, the eBay people told their investors that they processed as many searches on their site as did Google (2 billion per month). Later a source told John that Google did way more searches than that.

Anyway the point here is that I went over the presentation and found it pretty interesting. There's a pretty cool diagram on slide 23 about PayPal's growth opportunities.

Growth opportunity 1: Expanding on eBay and off eBay. I guess that means bringing in more users.

Growth opportunity 2: Expanding geographically: in Europe, Asia/Pacific, and ROW. What is ROW?? I looked up the definition, Row means 'Rest of the World'

Growth Opportunity 3: Buyer credit, gift certificates, Financial products. I love the gift certificate idea.

There's also some more interesting stuff on how PayPal will create synergy with Skype. From slide 32 of the presentation: "Every qualified Skype account comes with a PayPal account". Synergy indeed.

I know it's far fetched at this point but we can draw an analogy between PayPal/Skype and Google Payments/Talk when Google decides to deploy value added telephony services.

Taobao to be Free of Charge for Three More Years

Alibaba.com announced today that its Taobao.com Chinese-language consumer auction site will remain free for buyers and sellers for three more years, until at least October, 2008.

In addition, Alibaba will invest US $120 million to further grow Taobao.com's trusted e-commerce marketplace with the goal of creating one million jobs for entrepreneurs in China.

Some days ago Online Payment Watch highlighted an article about AliBaba's dominance in China and how it has gained market share from eBay's EachNet.

eBay Barricades Itself, Prepares for Google Offensive

In a defensive move against payments incumbent Google, eBay has recently changed its payment policy to include forbidding its users to use a new payment systemunless it is approved by the company itself. This does not include current non PayPal payment methods.

Read more about this move on eBay.

PayPal's Acquisition of VeriSign's Payment Gateway Creates Synergy, Strong Market Share

Internetretailer's article about PayPal's acquisition of VeriSign payment gateway has some interesting numbers.

PayPal’s acquisition of VeriSign Inc.’s $40 billion payment gateway business will help speed PayPal’s expansion of its non-eBay business, says Stephanie Tilenius, vice president of merchant services for the eBay payment subsidiary.

Link: InternetRetailer.com.