eBay Buys PayPal
from the it's-about-time dept
For months leading up to PayPal's IPO many people were saying that it was just a ruse to get someone (most likely eBay) to buy them. No one showed up, though, and PayPal actually went public. It seems eBay was just a little slow to realize that no one was actually using their own, competing money transfering service. Most people who want to settle eBay deals electronically use PayPal. That as an awful lot of money transferring hands where eBay didn't get a cut. So, finally, eBay has bought PayPal for $1.5 billion.
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My two least favorite over-hyped businesses
Initially, they seem like great ideas and services. Then, within 3 months of using either, it becomes clear that using either of these services is similar to burning your money.
PayPal's fees on it's "professional" services is absolutely outrageous. That said, this acquisition makes sense because now Ebay can add in Paypal fees to their charges and increase revenue, but I doubt they will be able to derive revenues outside of their own site. Maybe that's all the need/want to do, but it seems a bit short-sighted. The first thing they are cutting is the support of online gaming through Paypal- which was going to increase to 15% of revenues next quarter. If they are going to be this sensitive with the PayPal business, there are about 20 states out there who think the core Paypal business is illegal. It starting to sound like a Yahoo! M&A team over at eBay....
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