Could PayPal Be eBay's Burden More Than Benefit?

While adult entertainment comes to terms with PayPal's pending withdrawal of doing business with it, other speculation has arisen as to adding PayPal to its folio will end up hurting more than helping online auction king eBay.

Some believe PayPal could start charging individuals to send money to others, or milking the buyers, as one analyst told the E-Commerce Times. Others, the online business journal suggests, think eBay might hike sellers' rates before imposing new buyers' fees.

Only the question before the house seems to be how and whether PayPal can raise seller rates without angering eBay's star merchants, E-Commerce Times continued. "I'd definitely consider looking into some of the other services if they raised it," eBayer Susan Kosor told E-Commerce Times.

"(PayPal is) spending all their time servicing the eBay market," said Gartner vice president Avivah Litan to the Internet journal. "They no longer have the focus and the appetite to go after growth markets like foreign exchange the way they did when they were an independent business."

"Faced with the choice of annoying sellers or weakening its fiscal bottom line, eBay likely will put off making changes for as long as possible," says E-Commerce Times. "Sooner or later, though, it will have to decide whether it wants to push the PayPal brand into new markets or keep its blue-chip profits. When that day comes, the eBay community will have to make a decision of its own: whether to keep the faith or look for other options."