TELECOM Digest OnLine - Sorted: How Evil Will Google Become?

How Evil Will Google Become?

Tim Beyers (motleyfool@telecom-digest.org)
Fri, 16 Jun 2006 11:29:27 -0500

By Tim Beyers

Maybe I've still got evil on the brain. A week after the rerelease of
The Omen on the so-called day of the devil -- you know, 6/6/2006 --
I'm wondering when Google will finally give in to its darker side.

June 28 may offer another temptation. That's the date an RBC Capital
Markets analyst says the search king will launch Gbuy, an online
payments service similar to eBay's (Nasdaq: EBAY - News) PayPal. The
fear is that, with Gbuy, Google could get unprecedented knowledge of
what we buy and where we buy from, which would then allow it to charge
huge premiums for its most effective advertising tools.

That's a legit concern, to be sure, but it's not why I'm writing
today. Instead, I wonder whether the Big Goo, as Foolish friend Seth
Jayson calls it, will embrace another kind of evil: Internet gambling.

The answer matters more than you might think. PayPal, you see, doesn't
accept payments from gambling sites. And that leaves millions of
potential customers to other providers, including Neteller, a Pink
Sheets-traded company in which I own shares.

Neteller is like PayPal in most respects, except that the London-based
company specializes in processing online gaming payments. Poker sites
such as PokerStars and PartyGaming's Party Poker offer good
examples. And it's a big business -- Neteller processed more than $7.3
billion U.S. in transactions during 2005. That's a lot of, um, evil.

Can Google afford to ignore it? Calls to Google PR requesting comment
were not returned by press time. Nevertheless, the company may not
have much of a choice, at least here in the U.S. Congressman Bob
Goodlatte, a Republican from Virginia, has introduced a bill in the
House that would, if passed, ban money transfers for most forms of
online gambling, including poker.

Still, any meaningful legislation could be months or years
away. Meanwhile, PayPal remains the heavy in U.S. online payments
processing, handling $9 billion worth of transactions in the first
quarter. Reducing that edge won't be easy. History says that Big Goo's
strategy will be to zig as PayPal zags, hoping to drag consumers along
for the ride. And that makes sense. Too bad there aren't many ways to
do online payments differently. Unless, of course, Google decides evil
isn't evil after all.

eBay is a Motley Fool Stock Advisor pick.

Fool contributor Tim Beyers thinks PayPal rocks. He's curious to see
how Google will attempt to improve it. Tim owns shares of
Neteller. You can find out what else is in his portfolio by checking
Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.

Copyright 2006 Motley Fool

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