A clear shot across eBay’s bow

Times Argus:

Google Inc. has expanded its online payment service so that users can buy and sell everything from bicycle brakes to Beanie Babies through its Web site, posing an immediate challenge to eBay Inc.

Google added the payment service to its nascent Google Base classified listings Friday, an expected move that nonetheless sends shockwaves through the Internet industry.

EBay dominates e-commerce with its online marketplace and PayPal payment service. Analysts believe Google’s entry into both arenas could cause headaches for more established competitors.

“In our view, this is a clear shot across PayPal’s bow,” Ben Schachter, an analyst for UBS Securities, wrote in a research note.

Currently, Google’s payment service, Google Accounts, is available from a limited number of sellers on Google Base. More are expected to be added over the next few months, the company said.

To use the service, users must register with Google Accounts and submit credit card information. To make a purchase, users must click on a “buy” button next to a product and then go through the checkout process, which includes an estimate of the shipping costs.

Google’s payment service is without fees or commissions.