Paypal Business Review

(Part 2)


1) Big online retailers will have their own money management systems, so will not require PayPal.

2) SME would require third party services more as compared to biggies so PayPal can come there as a service provider in managing money securely

3) Some Big Brands may try to outsource this business to some services company like IT consulting etc

4) SME might not spend that money on it and rather go for a Fee based or variable priced service like PayPal for managing online revenue.

So seeing the above points Pay Pal should rather go for SME rather than big customers as the number of SME in cyber space is huge.It includes small consulting firms,Bloggers,Service based websites,Ad earnings,free lancers etc.

So PayPal should concenterate on them now and many of SME would become large organizations tomorrow thereby increasing the revenue of PayPal.

Q5: Finally, should PayPal forge strategic partnerships to check Google Strategy?

We can understand it on the basis of two scenarios


Scenario 1 :

Paypal ties up with Yahoo !,MSN

If PP ties up with google competitor it can give good head on competition to Google in the ‘Pay per purchase’ segment.It can offer its existing customers this option similar to google and earn more revenue and increase customer loyalty at the same time.

As per the case,most of the sales are initiated through Web Searches.So if some partnership comes through,it can give a lot of edge to PayPal as it is a trusted brand in the domain


Paypal ties up with Yahoo !,MSN

If PayPal ties up with some Google competitor,it can dilute PayPal’s brand.PayPal’s core competency is online payment not searches.Google has been earning its major revenue through Ads so it is concentrating on increasing it through Google Payments.Yahoo !,Bing(MSN) are not as good as Google when it comes to search based transaction.So Paypal would not be able to bank on them.

Seeing the above two scenarios,It would be better for Paypal to go for partnership with Google itself.eBay is a big partner with Google so it can tie up with Google and together they can earn revenue thorugh Paid Searches.Google is a leader in searches and PayPal is a leader in online transactions so it would be profitable for both.