EBay says it will buy the online payment company PayPal for $1.5 billion worth of stock...

EBay hopes to close the deal by the end of the year pending approval of regulators and shareholders. It will then phase out its own eBay Payments by Billpoint, which never proved as popular with users as PayPal.

Expect rates to rise. The Feds should not approve this. Ebay has too much monopolistic power in the auction arena.

Monopoly:

mo·nop·o·ly Pronunciation Key (m-np-l)
n. pl. mo·nop·o·lies
Exclusive control by one group of the means of producing or selling a commodity or service: “Monopoly frequently... arises from government support or from collusive agreements among individuals” (Milton Friedman).
Law. A right granted by a government giving exclusive control over a specified commercial activity to a single party.

A company or group having exclusive control over a commercial activity.
A commodity or service so controlled.


None of this applies. People are way too fast to jump on the "monopoly" bandwagon. There hasn't been a true monopoly of any kind in years.

Personally I think it was a smart move. Half of all PayPal transactions are now EBay related.

They are the Microsoft of online retailing.

From 2000 to 2001 their share of the online auction market grew from 57.8 percent last year to 64.3 percent. It's even greater now.

They own Sothebys, which incidentally was found guilty of conspiring with their chief competitor, Christies, to fix prices charged to fine art buyers.

They now own Elance, which has 80% of the online market for services.

When Half.com sprung up and quickly became a viable alternative, they bought it.

They bought BillPoint to compete with PayPal. When that didn't work, they decided to buy PayPal.

-----------------------

The only argument you can make that they are not a monopoly is that their two major competitors are sizable - Yahoo an Amazon. Yet, look how little market share they have. And they're losing money or barely making money, what happens if they do away with their auctions?

Ebay wants them around for the same reasons Microsoft still makes Office for the Mac - so they can claim there's a viable alternative.

Which part of "nothing about them fits the definition of a monopoly" did you not get?

You can say they are "too large" (in your opinion), that they are being anti-competitive (in your opinion), etc, however using the word monopoly is much like calling them pedophiles, it bears little relevance to the truth.

Even MS isn't a monopoly, so comparing them is really just a tangent you've thrown yourself on.

Back to the point, how will Ebay's buying PayPal hurt PP. Why would Ebay raise rates? They want PP because it is a better system than their own and it has a massive user base. PP already plugs Ebay with new Ebay-integration features every week, so why would they change that.

None of your logic or points seem to make sense, it really seems like fear-mongering more than anything. In other words, trolling.

http://www.planetpdf.com/mainpage.asp?webPageID=477 - look at the page title in your browser.

BTW, what long distance company do you use? AT&T laid all the lines, yet the government ruled that they could not exert monopolistic power. They were forced to open their lines, first to MCI, then all the telecoms.

hey maybe paypal will quit stealing now that ebay takes over ;)

Originally posted by adland II
BTW, what long distance company do you use? AT&T laid all the lines, yet the government ruled that they could not exert monopolistic power. They were forced to open their lines, first to MCI, then all the telecoms.

Exactly, I said a monopoly hadn't existed in years and I stand by that. AT&T wasn't a monopoly, but was exerting monopolistic power (according to the government). I'm not American, however I do know it has been "years" since AT&T.

The U.S. government does not use a dictionary to define "monopoly". It is defined by the Sherman Anti-Trust Act.

Not to nitpick, but eBay does not own Sothebys. They are only involved with Sothebys' embarassingly bad online auction fiasco.

They definately don't have a monopoly on online auctions, however the fact that they also own Billpoint COULD present some kind of problem if we ever get around to actually regulating these money transfer .com's.

Also, since eBay loves to force it's customers to pay insano fees for services they are used to after ebay swallows said service up like a hungry pacman, and eBay now owns 2 of the largest companies that do online payments...you do the math, there's some room for someone to step in on that one.

I'll concede to that.

This should cause some concern in the online community, but it doesn't approach monopolistic. If you want to see monopolistic practices, you need to look to Microsoft -- a very bad, bad company.

Prove please. btw, the Sherman act doesn't define a monopoly, it defines monopolistic and anti-competitive practices.

Microsoft doesn't approach the above definition either.

adland II:

eBay bought venerable old auction house Buttferfield & Butterfield, not Sotheby's.

Originally posted by Jeremy W.
Prove please. btw, the Sherman act doesn't define a monopoly, it defines monopolistic and anti-competitive practices.

Microsoft doesn't approach the above definition either.

Maybe you've not read the material. Read up on Microsoft -- or better yet, talk to any of the PC retailers who were threatened by them. I know a few...

Quite the contrary actually. I'm still waiting for proof of MS being a monopoly. IE: there is no other choice.

Microsoft doesn't fit the legal definition of monopoly, but it has engaged in monopolistic and dangerously anti-competitive practices. Good enough to make them a bad, bad company.

Yeah, and ASP isn't equal to PHP, MySQL is better than SQL Server, and Open Source will take over the planet?

Just kidding, I just don't see MS (and most people would agree) as badly as most xNix guys do (not that you are an xNix fanatic, I really don't know).

Anyways, </off-topic>

People are so affraid of other people success, it's scary. Microsoft isn't a monopoly. It makes me laugh when people say "I use Linux because Microsoft is a monopoly!" Interesting, if that were the case then Linux would NOT be a viable alternative to begin with.

Ebay a monopoly? Not hardly:The only argument you can make that they are not a monopoly is that their two major competitors are sizable - Yahoo an Amazon. That's argument enough. Preditory? Maybe. Monopoly? Not hardly.

Threatening PC retailers is not even relevent. If you hate Microsoft, you have other choices. If you hate Ebay, you have other choices. Support those other choices and use them.

Originally posted by DizixCom
Threatening PC retailers is not even relevent.

Oh, yes it is. When Microsoft goes to a retailer and tells them that if they continue to sell a competing and (some would say) superior product they'll pull their capability to sell MS products, that's relevant.

No, it isn't. What is it relevant to? Your point that MS is a monopoly? Has no relevance there. Your point that MS is anti-competitive? Sure, but we've already conceded that that is your opinion.

... Which part of MS preying on PC retailers has to do with Ebay buying PayPal? I'm really curious.

Originally posted by Jeremy W.
Which part of MS preying on PC retailers has to do with Ebay buying PayPal? I'm really curious.

None. Have you been following the fact that I'm talking about MS, not eBay above? Regarding eBay, I said the PayPal purchase should cause concern, but it doesn't come anywhere close to monopolistic in any way.

Also, a link for the MS apologists: http://www.usdoj.gov/atr/cases/f3800/msjudgex.htm

Thread topic: eBay buying PayPal

Therefore no relevence. If you are interested in carrying on a conversation as to why Microsoft is such a bad bad company, perhaps another thread is in order? I'm sure you can dig up several old ones that would suit the topic just fine.

The bottom line here is that Ebay owning PayPal is hardly a monopolistic issue. There are several other third-party merchants out there. Yahoo even owns one -- Yahoo! PayDirect.

well, i won't mind this as long as customer service response time improves!

Originally posted by DizixCom
Therefore no relevence. If you are interested in carrying on a conversation as to why Microsoft is such a bad bad company, perhaps another thread is in order?

Sorry!

If you check the thread, however, you'll notice that both adland II and Jeremy W were discussing Microsoft before I joined the discussion.

Originally posted by adland II
http://www.planetpdf.com/mainpage.asp?webPageID=477 - look at the page title in your browser.

BTW, what long distance company do you use? AT&T laid all the lines, yet the government ruled that they could not exert monopolistic power. They were forced to open their lines, first to MCI, then all the telecoms.

A judge ruled something? Oh my gosh. Stop the presses...
I don't really mean to sound that callow in my previous comment but, judges rulings don't always mean that they are right, that the ruling will be upheld, or simply because the media in general distorts facts.

Oh, btw... AT&T was not, repeat not broken up b/c of anti-competitive practices. Go back and get all of the facts. There were other competeting telcos back then (not on the national scale, but on regional and local levels). The reason behind the Big Bell breakup was actually because of DARPA and Nuclear Missle Defense.

In an attempt to create a distributed electronic defense network, one not prone to being knocked out by a first strike, DARPA engineers relized that the AT&T set-up for in their wiring and switching made it extremely prone to a wide-spread failure (Plus the fact that AT&T didn't want any data transmissions over their lines at the time). The solution they (DARPA) came up w/ was simply to create a new phone company. During that time nuclear defense and proposals like DARPA's were taken as scripture.

If you want I can go back and pull source material and footnotes for you to confirm this version of the truth....

Remember history is simply a set of agreed upon lies.
-- Napolean.

Jeremy W.,

M$ is a monopoly in fact. I guess you don't follow TV and newsites lately.

What evidence do you have they aren't ?

In a debate, the burden of proof is on the person making a positive statement.

If Media makes stuff fact, we are in deep trouble...

Anyways, mo·nop·o·ly Pronunciation Key (m-np-l)
n. pl. mo·nop·o·lies
Exclusive control by one group of the means of producing or selling a commodity or service: “Monopoly frequently... arises from government support or from collusive agreements among individuals” (Milton Friedman).
Law. A right granted by a government giving exclusive control over a specified commercial activity to a single party.

A company or group having exclusive control over a commercial activity.
A commodity or service so controlled.

Monopoly means "exclusive control". I know of no area that MS has "exclusive control" over anything... Unless you want to fill me in on some definition of exclusive or control which eludes me :)

Monopoly means "exclusive control". Kind of like Network Solutions was... and that wasn't too many years ago at all :o

Topic? What Topic? Did I miss the topic? :blush:

Some believe the Bell System was brought down by the U.S. Justice Department. The Justice Department had wanted to break up AT&T for a long time and had first attempted it with a 1949 civil suit. While that lawsuit had been settled by a 1956 Consent Decree which left AT&T virtually intact, a second Justice Department suit filed in 1974 was more successful and resulted in the dramatic divestiture settlement which was announced on January 8, 1982 and carried out two years later.

Another hero of the AT&T breakup is Federal Judge Harold Greene, who presided over the case and inserted some of his own convictions in the settlement - such as the order divesting the new AT&T of its lucrative Yellow Pages operation. Perhaps it was Judge Greene's unfriendliness that convinced AT&T management to accept divestiture rather than even harsher terms in a final ruling later on.

Originally posted by Jeremy W.
In a debate, the burden of proof is on the person making a positive statement.

If Media makes stuff fact, we are in deep trouble...

Anyways,

Monopoly means "exclusive control". I know of no area that MS has "exclusive control" over anything... Unless you want to fill me in on some definition of exclusive or control which eludes me :)

Hrmm, I want a server that can run IIS. What is my choices for an OS?

I need a computer that will run all of the popular games, run IE, OFFICE XP, and I can get good accounting software. What are my choices for an OS? I don't want windows as I don't like having to reboot my computer every couple of days.

Come on. If Microsoft isn't a monopoly they are cutting it REAL tight. If you are the average Joe a *nix box will definately not work for you because of the lack of software and a Mac box is questionable. So what are you left with?

I don't think application software should have to be open source. Software such as word processors etc probably should NOT be for obvious reasons. However, OS systems should be open source as to give users a choice as to who they will buy the software from.

I.E. we don't have these problems of having to buy the OS and the processor from the same company if we don't want to. When that because the case where the same company makes both that company has an unfair advatage competing companies do not have.

It also creates a greater problem in the unlikely even that company goes out of business. What would happen to us all if we found out that MS has over inflated its earnies by $4Billion this past year.

Michael

I don't feel that Microsoft is a monopoly. What other OS choices are there? Certainly Linux is not a viable solution for the average Joe. Even though Linux is way better as a server environemnt it really has quite a ways to go to become a workstation. When Microsoft first had those justice problems, I would of packed up and left for Canada in a heartbeat.

What really isn't fair when it comes to U.S justice is this damn Bankruptcy law. As a business person I honestly find it very unfair that you can run a company with billions or dollars and file for bankruptcy and have your debt dissapear. As far as I am concerned your company didn't work out, you fold and let someone else try.

There are so many hard working and honest business people out there that will never have access to millions of dollars. Just find it extremely unfair that you can file for bankruptcy and get away without paying.

IMO, there is nothing wrong ebay buying paypal but alternatives should exists there otherwise consumers may find them in difficulty when primary source is not viable (ebay or paypal) and if such things happen new alternatives will come up automatically ( I guess they should).

For example in case of Microsoft we have Linux and GNU as alternative.

Companies like Microsoft are good for the economy of any country.

In my understanding Linux and Microsoft work on totally different concepts. Microsoft Rent / Sale its Software Assets (compiled codes) + charge for its support where Linux is free but company do earn by way of charging for value added services and support.

One thing you have to agree with me, one of the object of any business is monetary benefit, otherwise one will find it hard to even sit on his computer and post a reply on this bulletin board. The reason Linux has maintained its free status because its supported by many geeks and programmers around the world,who, usually work for free and for interest.

IMO, both modules are good in there own ways, one have financial aim and other is based on moral and cultural based. Which product is superior is another topic.

So I guess one should not oppose merger or accusation of any company, but if they do anything wrong then one should try to create awareness about it and report it to proper authorities including company management or law enforcement agencies.

Hrmm, I want a server that can run IIS. What is my choices for an OS?

Yes, and you want your Mercedez engine to run in a Hyundai, but Mercedez didn't have the foresight to allow me to do this.

"I need a computer that will run all of the popular games, run IE, OFFICE XP, and I can get good accounting software."

ditto

...

Basically you are saying "some company wrote software I like. They wrote it only for Windows. Microsoft sucks for writing windows". How logical is that? MS makes a decision to only write software for it's own operating system, how is that anti-competitive? It's good business, why? Becuase the number of consumers who ONLY run a non-MS OS is actaully incredibly low.

As far as MS "almost" being a monopoly, that is equally balony. A monopoly is when you have no choice. You have a choice, in fact you have many, you just don't choose them, and neither do 200M other people.

"However, OS systems should be open source as to give users a choice as to who they will buy the software from. "

Erm... You want to tell me as a software development company that I have to work for thousands of hours, and then release my fruits to the world. I don't think so, thanx, but I'll never write another OS again.

Your solutions seem overly simple. MS exposed Windows in a way that no other OS had ever done. Maybe this is why there are so many security holes, but there were hundreds of thousands of applications written for Windows not because every household had it at the time, but because it was so EASY.

Is MS holy? Naw, but they aren't evil either.

Quote:

"Microsoft enjoys so much power in the market for Intel-compatible PC operating systems that if it wished to exercise this power solely in terms of price, it could charge a price for Windows substantially above that which could be charged in a competitive market. Moreover, it could do so for a significant period of time without losing an unacceptable amount of business to competitors. In other words, Microsoft enjoys monopoly power in the relevant market. "

and

"Viewed together, three main facts indicate that Microsoft enjoys monopoly power. First, Microsoft's share of the market for Intel-compatible PC operating systems is extremely large and stable. Second, Microsoft's dominant market share is protected by a high barrier to entry. Third, and largely as a result of that barrier, Microsoft's customers lack a commercially viable alternative to Windows."

Seems clear to me.

Hey, I wouldn't mind Microsoft so much if they were at least to some degree innovative.

I use windows because I don't have a choice. From all of my experiance Linux is far more stable than even XP. However because of the kind of programs I need to run on my home system I have to use Windows.

My argument isn't that Microsoft is evil. On the contrary. Bill is to good at what he does, business. Not programming. Business. All in all MS products stink in my book.

Not because of security issues. Obviously logic says more security holes will be found in windows simply because there are more anti microsoft people out there.

Rather I dislike it because I had to reboot my Win98SE machine 4 times a day. I had to reboot my windows2k machine at least once a week and my WinXP at least once every week to a month.

My linux machine, hrmm I would have to check the logs. And don't claim it to be because I may be using my windows machine more. I can go to bed leaving my windows machine in perfect health and wake up the next morning with it going slow and me having to at least log out and log back into my user.

<quote>
MS makes a decision to only write software for it's own operating system, how is that anti-competitive? It's good business, why? Becuase the number of consumers who ONLY run a non-MS OS is actaully incredibly low.
</quote>

Hrmm lets think about that logic for a second. First it is bad business because those programs are seperate from the OS. Why do you think the number of users of a NON MS OS is low? Because they can't get many of those programs in a non MS OS environment.

The average consumer doesn't know didly about the difference between Linux and Windows. If you was to put two computers on them with identical hardware and software given only that one would have Linux and the other Windows ( assuming that any program you could get for windows you could get for linux) the average user would buy the cheaper PC. They wouldn't care what OS was on it.

Think about the business tactics here. What microsoft does is good business. We made the first real OS to be sold with IBM's way back in the day for home or office use. Thus IBM takes over the computer market. most people are running an IBM or compatible with our OS. All of a sudden some other OSes come out. OS2/WARP etc. Some users buy into these but then face a problem. No software. Don't worry, Novell etc comes to the rescue. Hrmm now MS has a bit of a problem. What will we do about this. Ok, lets make a REALLY user friendly Word Processor, spread sheet, etc. Sell it for cheap. And get computer manf. to bundle it with new computers. Well this works to their advantage. Now people are accustemed to using MS WORD, EXCEL etc. Ok, thats great. Now some of these other OS begin to flurish and become nice. More stable than Windows even. But can a user switch easily. No, most people don't realize that they can. They are stuck using Windows OS because they don't want to have to switch everything over to StarOffice or WordPerfect. (that is using monopoliptic [spelling I am tired] power). So now these people are stuck using Word on Windows. Many of whom do not even realize there is a small choice IF they DON'T need accounting software.

Now that they have people in this trap have you seen the price of MS OFFICE lately. Or WindowsXP. It is out of this world.

Anyway yes I would agree... What MS does is VERY good business. But then again what is the purpose of this good business. To make their business bigger. Well it has done that. And in so doing that they have made themselves very near to being a monopoly and are already using the power of one. If you want to be able to run certain types of programs you MUST have windows.

That is where OSes should be open source. And your argument about working all this time and then opening up. Umm think, Linux is open source. No problems their. The whole idea obviously works VERY nicely. Linux has developed very well and has progressed nicely in this environment. In the Meantime more than one company has made A LOT of money off of Linux. Mandrake, Red Hat to name a couple.

Like I said before. Word Processors etc shouldn't be open source for Obvious Reasons but Operating Systems should. When you are forced to have a specific OS on your computer just to do certain things there is a BIG problem. Microsoft has to much control as to what goes on in my home.

I used to make the same arguments as you do. But then one morning I woke up.

Michael

I'm just heading to bed (and to be perfectly honest, I've participated in so many of these debates I get tired of them quickly), but Red Hat and Mandrake are not doing well.

Considering that you can download the software for most of their products for free, the fact that they often charge 100+$ for a book and a box seems outrageous to me.

All Linux companies realise that in order to actally survive they need to penetrate the consumer market. Why have they not been able to? Because of the exact reason your analogy forgets: users want what is comfortable to them.

They like windows, not because Microsoft tells them to, but because it has continuously been the best choice (besides winME which few people actually bought anyways) for what they needed.

Your reciprocal logic is also a bit flawed. Companies need to write software for Windows because nobody uses anything but Windows. Users use Windows because there are no applications for anything but Windows. Neither of these things has anything to do with MS's bad programming or whatever.

I have left the whole "security holes" thing alone. Some people have touched on it with the weak "yeah, well there are more MS haters out there" argument. There is no secure operating system. The Honeypot Project proves this. The HP basically is all aobut setting up blind networks, not advertising them, not stopping crackers, and seeing how long they last without being penetrated.

Average time for an MS network? 4-5 hours.
Average time for an xNix network? 6 hours.

Whoo, wave your banners at the extra 2 hours of security. I help run a win2k network. We have 200 workstations and 20 servers. Not massive, but in the first 6 months we were running those servers, 15 reboots happened. All but 2 of them were for hardware reasons. Of the workstations, in the first year of running win2k, there were only 3 that were problematic. 2 of those ended up being memory issues. The third required on OS reinstall.

Personally, I leave both my home and work machines running for weeks at a time. No reboots, no logoffs, nothing. Home is win98SE. Work is win2k.

Security? Doesn't really matter, it's relative.
Speed? Considering xNix is 1/1000 the size (which is both a good and bad thing), XP/2k and xNix perform similarly on identical applications

Personally, I think MS software is underpriced. Yes, underpriced. Considering they were the first company to use AI (albeit clunky organic AI) in a desktop application, they are a company who has a research force 100,000 strong and a company who (yes) is constantly innovating, I honestly think they could charge more.

Sales would go down, but I don't think Office or XP are overpriced.

Oracle is overpriced, anything IBM is overpriced, Macs are overpriced, Benz's are overpriced... MS isn't.

As an aside, I'm still waiting for someone to try and collect that 100$ price for solving the simple solution of enabling my company to save money using xNix.

Oh, and you "woke up"? Sorry, cliche. I've helped many xNixers "wake up" to why MS isn't so bad as well.

I am not an MS evangelist, however I detest weak arguments.

People are entitled to their opinions, but when most opinions are based upon supposition, heresay or what their favourite writer or site says... anyways... xNix IS a great OS, and the Open Source community is a great thing. I'm part of it, with *gasp* an Open Source, free .NET Forum which is literally one of the most advanced I've ever heard of.

It isn't anything til it's off the ground, but if you check Source Forge, I think you'll be surprised how many MS-based Open Source projects there are.

Companies need to make money to survive. Individuals are often better able to innovate.

Lately (it is probably just me) it seems threads quickly go off topic. The whole MS thing isn't all that related to this and most likely should be discussed as a separate topic.

Jeremy,

You missed the WHOLE point of my argument. My argument isn't that MS is a bad company, or that they make crappy software. Though, no matter how much luck you have had, you will never convice me that their OS does not stink. In fact I refuse to use anything other than Word or Excel. I think they are the greatest. At least twice as good as the next leading competitor.

My argument also isn't that MS has made stupid desicions. Obviously that isn't true or they would not be where they are today.

I don't want to see MS go out of business. What I want to see is at least two companies selling either the same operating system bundled however they do it as in linux, or two companies that sells their own OS which is regulated by standards so that they are backwards compatible with programs.

This doesn't leave users stranded to using MS. Rather it gives them an equal choice.

If they're going to take over Paypal, at least try to solve their own user problems first, right? :rolleyes: I can't imagine the disaster likely to follow if eBay succeeds. Higher Paypal fees? Urgh... :(

I don't have an opinion on this yet...I'm not an opinionated person.

On the news.com article that was done, a complaint listed was that eBay sellers that do business on eBay don't want eBay to have total control over their business processes.

What other concerns do you have by this except that the fees might go up? What kinds of problems do you see with PayPal right now?

</5 minute pause>

Oh.....I think I might have an opinion now sitting here thinking about it....I think eBay could really do some cool things with PayPal. I think the main concern right now is for eBay to run PayPal differently from how Billpoint was run.

yap yap yap yap yap - bicker bicker bicker bicker. guys its a company merger. they are going to happen and nothing YOU can do to stop them unless you're on the board of directors.

eBay will buy PayPal, and the owners of PayPal will walk away with $300million each and start something new. It happens all the time. a friend and i are working on something similar to Paypal - there you'll have a viable alternative.

people are a bit too "monopophobic"

in a world of supply and demand, the bottom line is.. what company has the products and services you want for the price you're willing to pay. People romanticize business ethics to point where it's ridiculous. The only reason small businesses don't behave like large businesses is because they don't have the resources. So if you don't like Microsoft, or Ebay, or AT&T, use other services.But if you do like those company's services, monopophobia is a horrible reason to not give them your business.

Companies need to write software for Windows because nobody uses anything but Windows. Users use Windows because there are no applications for anything but Windows.

That doesn't mean they're happy with it. Just as many sellers are not happy with eBay. Yet they remain because that is where the buyers are. And the buyers are there because that is where the vast majority of sellers are.

Fine. Free enterprise.

But where you begin to walk the line is the response when upstarts start to make enroads into their turf. It's okay that they try developing their own alternatives, in the case of eBay storefronts and BillPoint, but it gets sketchy when they fail to staunch a competitor's momentum and buy them (half.com and paypal). Or, in the case of Microsoft, they bundle an application into their dominant operating system for free to kill off a popular applicaton that itself may someday become the operating system of the future (Netscape - ASP).

By doing so, they eliminate the consumer's most viable choices.

eBay and PayPal are already "merging" with the new auction features, etc. PayPal has introduced.

Jeremy W, don't ever become a lawyer. Your logic is full of holes.

::Back on topic::

I'm totally not in favor of the Paypal buyout. eBay has consistently been raising their fees and many sellers are feeling the pinch from these guys. The thing about auctions is, the more users you have, the more users want to buy/sell on your system. Yahoo and Amazon auctions are not viable alternatives to people making a living selling in auctions. eBay knows this full well and is taking every bit of advantage that they can. I can already foresee further price increases from eBay.