From the scares-the-hell-out-of-me department, eBay has bought PayPal [theregister.co.uk].

I like PayPal. They've been very good to us, and have allowed the site to continue to exist. Without PayPal, we'd likely be screwed.

Naturally, I'm a bit nervous about all this. What do you folks think will come of this unholy merger?

eBay users have been saying for ages that they should be able to pay directly through PayPal. Since users were using an outside company for their business, it's only logical that eBay would want to own a bigger, more profitable piece of the pie.

Then, of course, they buy out the whipped cream factories and burn down the competition's ice cream facilities so no one can get it a la mode.

From what I can understand, this is a Good Thing... obviously PayPal is going to be geared toward auctions from now on, but to keep their customer base they'll probably still offer other features and screw over the folks in the UK: business as usual. I'd expect more nifty auction stuff, but I don't think they'll discontinue the donations. I'd watch for fees, though.... they're notorious for that. Otherwise, an influx of capital might be just what PayPal needs.

cKent

I dont care for paypal. I mean, I know they keep this place running, but im still mad at them for freezing my assets for a long time. By long, I mean 6 months. Just cause they didnt like the store I bought from. I dont even think thats legal. Oh well.

i think it's a brilliant move for eBay.

however, i do feel wierd about them already deciding to drop service foronline gambling [wired.com].

I understand the regulatory issues they are worried about, but since it's a grey area, it gives me the collywobblys that all of what, 10 minutes after they annouced the merger, they are already doing that.

i doubt it will happen, but since they have already banned dirty unmentionables, a wierd conclusion would be the banning of all adult products.

In Response to cKent (#168):

Damn, now I'll never be able to pay for a Monkey Phone Call without having to go through Amazon.

But seriously, after PayPal's attempt to force users to submit to unregulated and unsecured debit accounts, I didn't trust them much to begin with. They wanted to be a bank without being regulated like one. I haven't seen much to suspect that enslavement by the eBay masters won't be a _good_ thing for PayPal.

Mark
... not bad for what was essentially a scheme to sell Beanie Babies.

In Response to punkalicia (#200):

That would be bad. Very bad.

I'm more surprised that nobody has bought eBay yet.

Thought they were a treat too juicy for those megacorporations like A-Hole-Time-Warner.

In Response to TheWizardofFez (#215):

Time Warner....(shutters)

In Response to TheWizardofFez (#215):

Should PayPal not continue donations, what would your alternatives be?

Sounds like eBay bought it because it was making money off them.

In Response to msquare (#220):

Well, unless I'm missing something (and maybe I am; I'm kinda dumb like that), the Amazon Honor System would still be available, yes?

Actual PayPal Statement

eBay to Acquire PayPal; Shared Mission Will Expand Platforms and Benefit Consumers; eBay Announces Results for Second Quarter 2002

SAN JOSE & MOUNTAIN VIEW, Calif., Jul 8, 2002 (BUSINESS WIRE) -- In a move that will help millions of Internet users buy and sell online, eBay Inc. (Nasdaq:EBAY)(www.ebay.com), the world's online marketplace, today announced that it has agreed to acquire PayPal, Inc. (Nasdaq:PYPL)(www.paypal.com), the global payments platform. The acquisition, which is subject to various stockholder, government and regulatory approvals, is expected to close around year-end 2002.

A natural extension of eBay's trading platform, the acquisition supports the company's mission to create an efficient global online marketplace. Payment is a vital function in trading on eBay and integrating PayPal's functionality into the eBay platform will fundamentally strengthen the user experience and allow buyers and sellers to trade with greater ease, speed and safety.

The agreement also should benefit eBay shareholders. The combination of the two networks should expand both platforms while minimizing shared operational costs. Strengthening the marketplace and realizing the efficiencies made possible by the acquisition will increase the value of both businesses.

eBay will acquire all of the outstanding shares of PayPal in a tax-free, stock-for-stock transaction using a fixed exchange ratio of 0.39 eBay shares for each PayPal share. Based on eBay's stock price on July 5, 2002, the acquisition is valued at $1.5 billion. According to preliminary estimates, the recognized purchase price is also expected to include approximately $18 million for acquisition-related costs. The calculation of the final purchase price may vary significantly from these estimates, and will depend upon a number of factors, including the length of time necessary to close the transaction, and the value of eBay stock at closing.

The transaction is expected to be immediately accretive to eBay's pro-forma earnings per share. On a GAAP basis the company will initially incur incremental charges for stock-based compensation and amortization of intangible assets of approximately $4 million and $9 million per quarter, respectively. Accordingly, eBay expects the transaction to be dilutive on a GAAP reported basis.

"eBay and PayPal have complementary missions. We both empower people to buy and sell online," said Meg Whitman, President and CEO of eBay. "Together we can improve the user experience and make online trading more compelling. We can also capture greater value from the e-commerce opportunities occurring both on and off our site."

"eBay and PayPal have built vibrant user networks on the Internet," said Peter Thiel, Founder and CEO of PayPal. "The beauty of this deal is that it will allow us to offer our communities new tools and added flexibility to do more business. Integrating our services is a win-win situation for millions of current and future online consumers."

PayPal, which will continue to operate as an independent brand, is a leading online payments solution. Approximately 60% of PayPal's business takes place on eBay, making it the most preferred electronic payment method among eBay users. The remaining 40% occurs primarily among small merchants who constitute a potential new audience for eBay. Likewise, eBay's community of 46 million users worldwide represents a growth opportunity for PayPal. eBay's current payment service, eBay Payments by Billpoint, will be phased out after the close of the transaction.

PayPal will continue to provide a variety of consumer services, including its popular Web Accept product, which makes it possible for independent online merchants to accept payment directly at their web sites. In view of the uncertain regulatory environment surrounding online gaming, eBay plans to phase out PayPal's gaming business after the transaction closes. Gaming providers who use PayPal will have ample opportunity to...

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In Response to mea37 (#227):

Hopefully. (The more options, the more chance you have of people donating). If I recall correctly, the discussion we had a while back said something about Amazon taking a larger chunk of your donation than paypal does (for the same amount of money donated)....at least, that was the reason why _I_ switched over to donating via paypal. Of course, I've never had a problem with my paypal account, but from the people I've talked to that HAVE had one, Paypal seems sorta nightmarish, so I could see why people want to shy away.

I know a lot of people had complaints about Paypal and their lack of customer service, especially when things go wrong (there are virtually no phone numbers listed on the site, and you have to go searching to find someone to talk to voice-to-voice, instead of over email).
   
  I'm hoping that eBay, which to me has always seemed on top of the whole customer service thing, will impart some of this onto Paypal, making the "help-I-lost-my-money-and-I-can't-get-it-back" aspects of things a little more user-friendly for the average individual, whether that person is involved in an auction or still just donating money to Goats.com.

In Response to mea37 (#227):

Certainly the Amazon system will still be available, and while they've been very god to us in general, lately the level of support they've been giving the system has been very low. Many of the back-end systems have been broken for months, and no signs of getting fixed.

PayPal is also much nicer because of the percentages involved, the added features, and the fact that we know who's donated.

In Response to the_fetus (#208):

they can take away my porn when they pry my damp, sticky fingers off it...

In Response to Lonely Goatherd (#288):

dammit, that was me and i forgot to login.

In Response to jon (#247):

I would donate, except Paypal still has my assets frozen; I can't do anything without that. And for some strange reason, Amazon wont take my credit card. Maybe now that paypal is through ebay, my assets will get unfrozen.

In Response to NscafeUnleaded (#239):

All I can say is, "sucks to be Billpoint." Hopefully some upstart isn't going to replace PayPal three years down the road.