Skip to main content

PayPal to become eBay’s biggest business?

Image used with permission by copyright holder

Online auction and market place company eBay has been known for making some inappropriate acquisitions—think Skype—but the company apparently had its head on straight when it acquired online payment processing service PayPal way back in 2002. Now, speaking with investors and analysts, eBay executives are playing up PayPal as the bright star in eBay’s future, forecasting that the unit could become eBay’s biggest business, eclipsing the company’s online marketplace in three to five years. The main reason? As more and more businesses get online—and more and more consumers engage in mobile commerce—online payment processing should continue to see enormous growth.

Back in the original dot-com boom, eBay was one of the major success stories, with its highly popular and high-margin online marketplace attracting enormous numbers of buyers and sellers—and eBay took a cut from every direction on transactions. In recent years eBay has taken a number of steps to make its online marketplace more secure, to reduce fraud, and ease the online buying experience, but the company’s basic online store and auction model has long-since matured, and growth in the business has slacked off—although, to be sure, the company still earns plenty of money from it.

Recommended Videos

PayPal, conversely, is still experiencing significant growth. PayPal president Scott Thompson says the unit had revenues of $3.4 billion in 2010—an increase of 23 percent of 2009—and the company expects those revenues to reach $6 to $7 billion by 2013. In comparison, eBay’s marketplace earned $5.7 billion in 2010, and eBay expects that to grow to $7 to $8 billion by 2013. In other words, around 2013 the businesses should be neck-and-neck. And eBay expects payment volume from mobile transactions to double in 2011 to around $2 billion.

PayPal’s future is not without some clouds: although eBay is keen to prove it can compete with the likes of Amazon and Google in the U.S. market, the regulatory environment for online payment processors in international markets is turbulent—and some industry watchers expect that for an online payment processing company to succeed, it has to be able to tap into massive emerging online payment markets like China and India. PayPal got a shot in the arm last year when China’s Alibaba began supporting PayPal transactions; however, the company also took hits in India and was forced to suspend service in India, only to resume without personal payments.

Geoff Duncan
Former Contributor
Geoff Duncan writes, programs, edits, plays music, and delights in making software misbehave. He's probably the only member…
The robot takeover comes another step closer — at Amazon
An Amazon robot working inside one of the company's warehouses.

Amazon is close to having more robots operating inside its warehouses than humans after the e-commerce giant announced this week that it now has more than a million robots working at its facilities around the world.

Over the years, Amazon has spent billions of dollars on the development and deployment of warehouse-based robots, which handle an array of tasks once performed by human workers.

Read more
This Lenovo ThinkPad laptop is over $1,400 off — hurry while stocks last!
The Lenovo ThinkPad T14 Gen 5 Intel laptop on a white background.

Now's an excellent time to take advantage of laptop deals from Lenovo, which has slashed the prices of a wide range of devices for its Black Friday in July sale. Lenovo's ThinkPad laptops are up to 45% off, and here's one of the most interesting offers available with such a discount — the Lenovo ThinkPad T14 Gen 5 at $1,440 off its estimated value of $3,199, so you'll only have to pay $1,759. That's an excellent price for this fantastic productivity tool, but you're going to have to push forward with your purchase as soon as possible because stocks may run out at any moment.

BUY NOW

Read more
Early Prime Day deal: Samsung’s 27-inch Odyssey G3 at its annual low price
Samsung Odyssey G3 gaming monitor on desk with keyboard and headset.

If you're ready to upgrade your monitor, this Samsung deal over at Amazon just might be your best bet. The 27-inch version of Samsung's Odyssey G3 is $130 right now, a full $100 off its regular $230 price and its lowest price of the year. It's a part of early Prime Day deals and a good sampling of what we can expect for the shopping holiday, which officially lands on July 8th. Tap the button below to see it for yourself or keep reading to see why we like this deal and why this should be your next monitor.

Buy Now

Read more