Web 2.0 Summit: PayPal Has Potential Beyond Online Payments - InformationWeek

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Web 2.0 Summit: PayPal Has Potential Beyond Online Payments

CEO Meg Whitman suggests that personal identity information in PayPal could be additionally helpful for social networks and other community-based properties.

Meg Whitman, president and chief executive of eBay, acknowledged Thursday that the online marketplace's PayPal payment system has the potential of becoming the personal wallet of emerging Web 2.0 social networks and other sites.

Under questioning on stage at the Web 2.0 Summit in San Francisco, Whitman agreed with interviewer Tim O'Reilly, founder and CEO of O'Reilly Media, that the personal identity information in PayPal could be used by each of its users in e-commerce throughout the Web, as well as on services offered in social networks and other community-based properties.

Whitman acknowledged that PayPal's ability to keep a person's identity and information hidden, while also guaranteeing the person is who they say they are provides an opportunity for the service to be used as an online identifier. Asked if there was a social network play for PayPal, Whitman said, "The answer to that is potentially." She later went on to say that the identity information within eBay's databases has "long-term possibilities."

Nevertheless, the chief executive said the company had to move carefully in expanding PayPal's use on the Web due to privacy issues, especially since the service contains financial data on its users. At the same time, eBay recognizes that it needs to play a bigger part in the emergence of Web 2.0 sites based on communities of users.

"We know that we're only here because of a disruptive innovation," Whitman said. That innovation was eBay's popular auction service that brought buyers and sellers together online.

Other areas in which eBay's massive database could be useful included its sophisticated fraud model used to catch crooks on the site. In addition, Skype, eBay's Internet telephony service, could give users the ability to combine their address books with those of other services, such as instant messaging or social networks.

However, such innovation would have to wait its turn, given that Skype is a relatively new company and the to-do list is long, Whitman said. "Young companies like this can only do a small number of things very well," she said.

On retail taxation, Whitman said she was not against taxing sales on the Web. However, the government would first need to establish one tax that could be leveraged easily across the Internet. Currently, states and local governments have their own individual tax systems, making it nearly impossible for Internet companies to deploy a taxing system.

"If it was simple and easy to understand, then I don't think necessarily that it would have a deleterious effect on Internet commerce," she said.

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