EBAY WILL RESTRICT PAYPAL'S USE, ANALYST SAYS: Online auctioneer eBay Inc.'so acquisition of leading person-to-person service PayPal Inc. will "dampen PayPal's rapid growth across the internet," says Avivah Litan, vice president and research director at Gartner Research. That's because eBay likely will restrict use of PayPal to the eBay site, she says. Although 60% of Mountain View, CA-based PayPal's business comes from eBay, PayPal has been trying to move beyond auction sites to recruit small businesses and other non-auction merchants, both in the U.S. and abroad. "The credit card companies can breathe a temporary sigh of relief," Litan says. "PayPal is not going to become this ubiquitous alternative to credit card systems." Already, San Jose-based eBay has announced it will stop supporting online
gambling, "a big growth area" for PayPal, Litan says.
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