eBay at Home on the Ropes

What a rough week for eBay.

The e-commerce cum online-payment cum Internet communication company is back in one of its periodic slumps where, in the eyes of the world at large, it just can't do anything right.

The albatross around eBay's neck this time is Google's Checkout, the latest offering from the search giant in its never-ending quest for new sources of revenue. As it stands now, Google Checkout seems simply to be an online venue to store your credit card information, with Google's assurance that it will be secure.

This has been coming for well over a year, ever since Google executives hinted at an online-payment service that the press quickly dubbed "the PayPal killer." Investors began predicting a collision between Google and eBay, with Google the odds-on winner. eBay's stock swooned but later recovered.

Now the other shoe has dropped with a more official unveiling of Google Checkout. Rather than assessing whether people will find the service useful, the coverage has focused on how this marks the beginning of the end for PayPal.

Analysts have stepped forward with their warnings and lowered price targets on eBay. Their chief argument is that if Google Checkout quickly evolves into more than a simple checkout service, it could quickly become the most common means of making payments on the Internet -- in essence, turning PayPal into eBay's own proprietary payment system.

Compounding the bad news were other PayPal-related developments that only made things seem worse. On Thursday, Jeff Jordan, the longtime eBay exec who had been overseeing PayPal, stepped down to spend more time with his family. He'll be replaced by Rajiv Dutta, the former eBay CFO who is currently president of Skype.

Then on Friday, news hit that eBay had placed Google Checkout on a list of payment services that it deems not acceptable for its community of merchants. eBay says the chief reason Google Checkout didn't make the cut was that it is too new and unproven. What's more, eBay merchants can still choose to use it for payments if they want.

But the reaction among some bloggers was that this was a clear attempt to unfairly block Google on eBay's home turf.