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Saturday, June 18, 2005

Google To Offer E-Payment Service

Google Inc. plans to offer this year an electronic-payment service that may compete with EBay Inc.'s PayPal unit, it was reported Friday.

Besides potentially increasing competition with the online auction site, the service could help Google, Mountain View, Calif., diversify its revenue sources, The Wall Street Journal Online said. About 99 percent of the $3.2 billion in revenue the Internet-search company took in last year was from online advertising.

Quoting people familiar with the matter, the Wall Street Journal said the Google service could have similarities with PayPal, which handles transactions between consumers and online merchants. Most of PayPal's business comes from EBay auctions, but the parent company has been trying to expand its use to other websites.

Companies make money through electronic-payment services by taking a commission on each transaction. PayPal accounted for 23 percent of EBay's revenue in the first quarter, or $233.1 million, the Wall Street Journal said