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June 21, 2005

Google Sez PayPal is Safe. It Isn't.

Google CEO Eric Schmidt told the Associated Press late today that Google is not going to compete directly with PayPal. But it was a somewhat tricksy denial, with Schmidt saying that Google won't tread on PayPal's turf, saying, "[Google does] not intend to offer a person-to-person, stored-value payments system."

Why is this tricksy? Because it is highly contingent, with the compound condition of "person-to-person" and "stored value". If Google doesn't store value or, more likely, has a payment system that is tied to Froogle purchases and/or blog/AdSense payments then that would be okay, under Schmidt's definition.

The trouble is, at least from eBay's point-of-view, once Google is successful in one area of micropayments there will be immense pressure for the company to broaden its product offering -- putting it square in PayPal territory, albeit a year or two from now as opposed to today.

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