Google will unveil a much-anticipated payment service that aims to make online shopping more convenient and give advertisers another reason to pour more money into the Internet search leader.
As Google attempts to boost its already lofty profits and become an even more prominent player in ecommerce, the company risks alienating one of its biggest advertisers, online auctioneer eBay, which runs the Internet's leading payment service, PayPal.
Although Google doesn't view its service as a PayPal competitor, there is no question it poses a long-term threat to eBay, said Internet market analyst Greg Sterling.
'Any time Google does something like this, it has the potential of turning into a big deal,' Sterling said.
At least two merchants, Starbucks and Buy.com, that have signed up for Google's new service also accept PayPal .
EBay spokeswoman Amanda Pires declined to comment on Google's entrance into online payments, but the company signaled its concerns about the search engine's expansion last month when it formed an alliance with Yahoo that will make PayPal the preferred payment provider on the Internet's most trafficked Web site.
Google has been testing its payment service, called 'Checkout,' for nearly a year, spurring widespread speculation among Internet analysts and investors.
Google's service is designed to serve as an electronic wallet that will enable consumers to buy products and services from a bazaar of merchants without repeatedly entering the same personal and financial information at each store.