SAN FRANCISCO — Hoping to build upon the power of its Internet-leading search engine, Google Inc. is believed to be developing an online payment system that would pose a stiff challenge to online auctioneer eBay Inc.’s industry-dominating PayPal service. Industry analysts, merchants and investors were digesting reports Monday that the Mountain View-based company is testing a payment system — codenamed Google Wallet — in hopes of rolling out the service later this year. Investors appeared to view Google as a formidable threat. Google’s shares gained $6.40, or 2.3 per cent, Monday to close at $286.70 US on the Nasdaq Stock Market, where eBay’s shares dropped 81 cents, or 2.1 per cent, to finish at $37.24.

© The Vancouver Sun 2005