eBay Inc. Acquires Zong
eBay said this morning that it is acquiring Zong, a venture-backed mobile payments provider, for about $240 million in cash.
Zong works with more than 250 mobile network operators worldwide, offering localised payment services on a user’s mobile phone or PC through their carrier billing. Consumers have to enter their mobile phone numbers and then, in a matter of seconds, Zong verifies that number and clears the payment on the customer’s existing wireless service account.
Combined with PayPal’s leading global payment platform serving 100 million active accounts worldwide, the company expects that Zong will add complementary technology and talent that will help to strengthen PayPal’s leadership position in mobile payments and digital goods.
Scott Thompson, president of PayPal, said that Commerce is changing. With mobile phones, we walk around with a mall in our pockets. PayPal helps to make money work better for customers in this new commerce reality – no matter how they want to pay or what device they’re using.
Further, he added, “We believe that Zong will strengthen this value by helping us reach the more than 4bn people who have mobile phones, giving them more choice and security when they pay.”
Earlier this year, PayPal launched PayPal for Digital Goods, a new product that lets buyers pay in two clicks without leaving their gaming experience or content site. In 2010, PayPal processed $3.4 billion in payments for digital goods.
eBay Inc. does not expect the acquisition of Zong to have a material impact on its financial guidance as issued in conjunction with its first quarter earnings release on April 27, 2011.