PayPal shunts shops aside in site redesign

PayPal, which eBay acquired in July 2002, is planning to launch a revamped version of its home page in the near future. One noticeable change on the preview of the new site is the absence of the previously prominent link to PayPal Shops, which promotes individual vendors who use PayPal as their main payment mechanism.

"PayPal Shops was not really a large part of our strategy anyway," one internal e-mail discussing the redesign noted. "We haven't been actively driving that part of PayPal for a long time."

The company claims around 42,000 sites have signed up to the scheme since its inception -- a fairly healthy number, but only a fraction of the 50 million registered PayPal users.

A PayPal spokesperson said that while Shops was no longer a featured link on the new home page, it was included as a link in every page footer. "The new homepage design and features are, in large part, the result of [user] feedback," she said. "PayPal, of course, is still dedicated to our Shops section and will continue to pursue ways of promoting it for our merchants featured there."

One restraining factor may be internal competition. PayPal's business has always been dominated by eBay customers, and eBay offers its own Stores facility for non-auction sales.