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EBay Acquiring VeriSign Processing for $370 Million

Posted by ScuttleMonkey on from the spending-money-to-justify-spending-more dept.

Forum124 was one of the first in a wave of readers to tell us that eBay is acquiring VeriSign's payment processing business for US$370 million. VeriSign will be merged with PayPal and is estimated to generate a 20 percent operating margin which eBay hopes to help offset the recently reported high purchase price of Skype.

14 of 123 comments (clear)

  1. Trust? by Anonymous Coward · · Score: 1, Insightful

    From the people who brought you the crazy frog: Secure online payment processing! We deserve your trust!

  2. Seriously bad mix by melted · · Score: 4, Insightful

    eBay and PayPal aren't exactly known for instilling confidence in their customer base. This is a slippery slope for Verisign, who issues SSL certs and must by definition be trustworthy.

    1. Re:Seriously bad mix by hackstraw · · Score: 2, Insightful

      eBay and PayPal aren't exactly known for instilling confidence in their customer base.

      True. Although it appears as though the slashdot summary is inaccurate and eBay is only acquiring the payment processing division of Verisign. Now, why a random part of an online company is worth $370 million is beyond me.

      This is a slippery slope for Verisign, who issues SSL certs and must by definition be trustworthy.

      They don't have to be trustworthy by definition, only trusted. Big difference, and being trustworthy helps being trusted, but its not a requirement. Many people distrust the government, but have no problem trusting the value of their money.

  3. Good and Bad Buys by Anonymous Coward · · Score: 1, Insightful

    Skype - Bad Buy...

    Versign - Good Buy...

  4. Well, let's put it like this by Moraelin · · Score: 5, Insightful

    "I've been developing small business ecommerce sites for the past 10 years, and on every single development I've been part of we've tried to avoid Paypal integration simply because it puts users off."

    Let's even skip over the bad perception of PayPal, and trusting my money to someone who's ostensibly not a bank, makes no guarantees, isn't backed by the government, and generally is just some dot-com.

    But let's put it like this: if an e-commerce site can't afford to just make a contract with a bank to deal with credit-/debit-cards, why should I feel confident in them. We're not talking some starving web-cartoonist taking micro-payments for a living, we're talking a business and trusting them with, say, a few hundred quid for a new PC or a new 20" TFT monitor. Then I'd expect them to, you know, act like a business and inspire some confidence.

    If they can't even afford to get some credit-card processing capability, can they even afford a warehouse, or will I get to wait for a month while they order the stuff directly from the manufacturer? Can they even afford employees, then? (E.g., will I have to wait for a month if it's a one man business and the guy is on vacation?) Will they be around next month, if I need support or to file a RMA?

    Plus, I suspect for a lot of people it's also a matter of "usability". Yes, I know it doesn't really fit the real definition of "usability", but please bear with me. It's the same idea: making people jump through extra hoops and go through extra web pages just to buy your product is bad. If someone doesn't have a PayPal account, having to go through all those hoops to register a PayPal account, get confirmed, etc, then finally return to get the product they wanted... some may lose interest and go shop somewhere else.

    --
    A polar bear is a cartesian bear after a coordinate transform.
    1. Re:Well, let's put it like this by squaretorus · · Score: 3, Insightful

      "If they can't even afford to get some credit-card processing capability, can they even afford a warehouse"

      Welcome to the hollow enterprise.

      Businesses chose not to have certain parts of the traditional infrastructure in order to reduce costs and bring products and services into price bands that couldn't be achieved with the higher operating costs associated with 'fully tooling up'.

      Take the low cost airlines as an extreme example of this. "If they can't even afford to give me some food on board can they even afford servicing?". Yes - they can - and because they dont feed you lots of people who couldn't afford traditional air travel can now fly easyjet or ryan air.

      My butcher is closed on wednesdays and for an hour between 1:30 and 2:30 every day. I still use him because unlike Tesco he doesnt treat the food I'm going to eat like shit. He can't afford to (or choses not to) pay someone to cover those extra hours - which is a pita sometimes - but I'd rather he was there without the assistant than just didn't exist.

      The same goes online - if someone has a product to sell, in an unproven area, the bank will simply tell him to come back when he has 6 months of good sales - which he can't get without a paypal style system.

      If you chose to avoid using these smaller establishments and prefer to buy everything from Amazon and Walmart then thats your choice. Would I buy a £30,000 new car from a guy using paypal? No. Would I buy a £150 flat screen from a small retailer offering kick ass pricing because of minimised overheads - yeah - probably.

  5. THEY ARE NOT BUYING VERISIGN! by Numair · · Score: 4, Insightful

    God could this article be ANY MORE MISLEADING? eBay is buying Verisign Payment Services, which offers software that connects merchant accounts to websites. This represents only 3-4% of Verisign's overall revenues.

    Verisign is a MULTI-BILLION DOLLAR COMPANY. What sort of moron would piece together "eBay buys Verisign" from the news reports?! We really need to do something about people doing rapid-fire posts on Slashdot just to see their name / their company's news website in lights. Totally ridiculous.

  6. Large Corporations != Economy by Numair · · Score: 2, Insightful

    You DO realize that most Americans are employed by small- and medium-sized businesses, right? If you are only looking for employment at large firms, you are buying into that horrible myth that the Fortune 500 = American Business.

  7. Re:Just a little warning about PayPal by MooUK · · Score: 2, Insightful

    I have to be suspicious of the fact that the first of those is selling it's own merchant service. In other words, if it convinces people it stands to gain directly.

  8. Summary is misleading by putko · · Score: 4, Insightful

    EBay doesn't hope that the new purchase will offset the loss from their bad purchase. That wouldn't make sense -- that's done, and it is in the past.

    If it is good to by Verisign, they'd buy Verisign, whether or not they bought Skype. Unless buying Skype (and paying too much) was the very thing that allowed them to buy a chunk of Verisign.

    The purchase of Skype is what's called a "sunk cost".

    --
    http://www.thebricktestament.com/the_law/when_to_s tone_your_children/dt21_18a.html
  9. Paypal, Verisign, Numbers by salmonz · · Score: 5, Insightful

    Do analysts ever consider the revenue for the next year when eBay takes over Verisign payments be lower than expected? If I was a merchant, I wouldn't have any ties with Paypal. If I had an account with Verisign, I would be looking for another merchant provider such as Moneris to protect my business.

    Paypal doesn't bring any value to those processing credit card payments. I am not saying it because it seems to be the norm these days bashing Paypal, but the fact of the matter is Paypal has conflict of interests everywhere. Merchant providers are supposed to be in favor of the merchant and the bank's credit card business is in the favor of the cardholder. Paypal likes to be bank and provider at the same time.

    Lastly, Paypal already offering merchant services. Paypal is simply buying customers to add to their existing clientel. I see a lot of former Verisign merchants leaving.

  10. gravity well by v1 · · Score: 4, Insightful

    is it just me or is ebay becoming this big black hole and just sucking in everything near it?

    --
    I work for the Department of Redundancy Department.
  11. Silly Poster... by StringBlade · · Score: 2, Insightful

    ...factual headlines don't draw crowds.

    --
    ...and that's the way the cookie crumbles.
  12. So... by slapout · · Score: 2, Insightful

    "estimated to generate a 20 percent operating margin which eBay hopes to help offset the recently reported high purchase price of Skype."

    Let me see if I understand this. They buy Skype. Then, to help pay for it, they buy something else?

    --
    Coder's Stone: The programming language quick ref for iPad