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Monday, October 10, 2005

eBay Buys VeriSign's Payment Gateway

eBay Inc. announced today it has purchased an online-payment business from Internet services company VeriSign Inc.

VeriSign has agreed to help the auction site secure transactions by supplying its customers with a two-factor authentication system.

Executives from San Jose-based eBay said the company will pay about $370 million for VeriSign's payment gateway business, which enables online merchants to process and manage electronic transactions. eBay plans to combine gateway with PayPal, its online payment service.

"VeriSign's payment gateway is a popular and market proven product that perfectly complements PayPal's existing payment services,'' PayPal president Jeff Jordan said in a statement.

The acquisition is subject to regulatory approval but is expected to close in the fourth quarter, the companies said in a statement.

As part of the partnership between eBay and Mountain View, Calif.-based VeriSign, eBay will buy up to one million authentication tokens. The tokens display a six-digit code that computer users must type, along with passwords, to gain access to networks. The code, which changes every minute as determined by an algorithm, is unique to each token. They are designed to deter identity theft attacks.

The tokens are expected to be made available to eBay customers on a global scale sometime next year, according to an eBay spokeswoman. She added that the company has not determined whether it will charge for the tokens.

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