Slashdot Mirror
Ebay buys PayPal
mdahlman was among several readers who submitted the story that
eBay has
bought Paypal in a deal worth $1.5B in stock. The article is mostly
numbers and money related stuff, but it also briefly mentions some of
the controversy surrounding eBay.
Maybe they're just tring to set a record for the largest sale on their own auction site. You too could own paypal. Bids start at 1 billion, 2 billion dollar reserve.
Who else can see paypal becoming a "have money sent to you, but only be allowed to be spent on ebay" type of service?
I do not. If paypal becomes the universal standard for person to person financial transactions online, they stand to make much more money than if they only sold "ebay bucks."
OddManIn: A Game of guns and game theory.
It turns out they just fell for some Finnish guy's scam (never send $1.5B of stock to a P.O. box!). He claimed he was selling PayPal "for a friend", but oddly became angry upon suggestion of sending it C.O.D. Unfortunately, due to their toothless fraud protection policies, it looks like they're just gonna have to suck it up and take the loss.
Better luck next time, eBay! They probably should have bought PayPal through an escrow service...
EBay agreed to buy PayPal, a popular payment service, in a stock-swap transaction valued at $1.5 billion. EBay, which separately reported stronger-than-expected earnings, will phase out its in-house Billpoint unit.
I'm sure billpoint wont be missed until paypal fees are raised due to lack of competition.
This is an interesting development. I really don't think we should be worried about some kind of monopoly appearing here, since the success of eBay depends on hundreds of thousands of sellers.
We've seen a few moves like this on eBay's part. This is another way that eBay is trying to shield itself from being slaughtered in the current economy.
First, you have eBay beginning to offer benefits for sellers over a certain income margin, which should encourage sellers to stay with eBay, which increases eBay's financial security. Then, you have eBay buying PayPal. PayPal is one of the most influential external factors to the success of eBay; if PayPal went under, many sellers and buyers would have more difficulty making transactions.
This also allows eBay to begin attacking the single factor that keeps many people from buying at online auctions: fraud. Before now, eBay did not have any ability to track fraudulent users, or take any action against them if they used PayPal. Now, they have the ability to go after and probably halt fraud for the most part.
Overall, this looks like a very intelligent business move, and one that should help continue eBay's pattern of success.
...
Asked about the deal, an Ebay spokesperson described PayPal's management as "A++++++++++", calling them "VERY RESPONSIVE" and noting that they "WOULD DEFINITLY BUY FROM AGAIN." PayPal's feedback rating is 1283.
Karma: Good (despite my invention of the Karma: sig)
...or does corporate America somewhat resemble a game of Pac-Man?
"To confine our attention to terrestrial matters would be to limit the human spirit." -Stephen Hawking
I thought the people upset with Paypal were a small minority until I tried to use the service. I sold a friend something. PayPal screwed it up. The amount of the transaction was $5. But they managed to take the money from my friends credit card, claim they never took it, charge my friends account for it, giving it a negative balance, and reverse the charge on my account.
So over this $5 transaction PayPal grabbed $15 for itself-- $5 from me, $5 from the friends bank and $5 in a charge to the friends paypal account that they have to pay to fix it.
Then they decided this friend was committing fraud and suspended their account.
This is totally unacceptable. This was the FIRST TRANSACTION for all of us, after we both became verified members, etc. The bank is clear that the money went to paypal, and paypal wouldn't say a peep about what went wrong.
I wouldn't say PayPal was a fraudulent company, but in my experience, they have a %300 failure rate-- 1 transaction and they took money from three entities.
In the end my friend and I both closed our paypal accounts and settled up face to face.
Sheesh.
Yeah, and you guys panned the ipod too: http://apple.slashdot.org/article.pl?sid=01/10/23
Damn! I bid $1.45 billion and ebay sniped me in the last 20 seconds.