Monday, October 10, 2005

Paypal Makes Power Play With Baidu Alliance

Paypal joining Baidu, makes power play in Chinese online payment market

Yesterday, world leader of online payment system Paypal and Baidu jointly announced that both sides agreed to form strategic alliance. Paypal will provide long term online payment solutions for Baidu. Both sides will also jointly develop next generation online payment products and services.

According to industry analysis, by joining Baidu, Paypal will not only be able to reach Baidu's user base, but also borrow Baidu's strong influence in Chinese market. It will help to speed up Paypal's market penetration. This move will make long term deep impact in the whole online payment competitive landscape.

Paypal's Chinese general manager, Guangyu Liao said that, this alliance with Baidu proves the acceptance of Paypal from many aspects including customers and the industry. The future looks bright. Through this collaboration, Paypal's leadership position will be further strengthened.

While Baidu's CEO Robin Li thinks, both sides are in leadership positions. And the services are very complimentary. This collaboration will result in a "win win" situation. He said that, Baidu has gained the powerful payment tool of Paypal through this alliance. It will increase Baidu's competitive strength in the related field.

It is known that Paypal is world's leader of online payment service provider with almost 79 million customers. Many internet users as well as traditional businesses are using Paypal to make trading exchanges among 56 countries. In the second quarter this year, the total payment handled was $6.5 billion. Currently, Paypal is handling 9% of US's consumer electronic tradings as well as 5% of that around the world. It has also gained the interests of Chinese companies. The two big portals, Netease and has already become the first customers of Paypal. 

InformationTimes reporter Jun Lu


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