Fifty-six million people use PayPal to send and receive money through the Internet, but few of them know how close the popular payments service once came to destruction.
In a new book entitled THE PAYPAL WARS: BATTLES WITH EBAY, THE MEDIA, THE MAFIA, AND THE REST OF PLANET EARTH (World Ahead Publishing), former PayPal insider Eric M. Jackson reveals the dramatic origins of the now extremely successful dot-com.
“In its first year of operation, PayPal was rocked by three CEO changes, challenged by fierce competition from startups and banks, and saddled with a broken business model that was bleeding tens of thousands of dollars daily,” says Jackson, who served as the company’s senior director in charge of U.S. marketing. “And, to make matters even worse, eBay-our primary source of customers-opened up its own payment service and overnight became PayPal’s top competitor.”
Competition wasn’t the only threat facing PayPal. As THE PAYPAL WARS reveals, the Mafia also had its eyes trained on the young startup. Using stolen credit numbers, foreign crime rings charged millions of dollars through PayPal before transferring the ill-gotten gains out to bank accounts, leaving PayPal on the hook for their massive bill. “The Mafia tried to rob us blind,” Jackson says, before adding, “Fortunately, our talented team found a way to fight back.”
Now a subsidiary of eBay, PayPal survived its early woes and went on to become the first dot-com to issue an initial public offering, or IPO, following the terrorist attacks on 9-11. But while going public is generally a benchmark of success for a young company, THE PAYPAL WARS shows that in PayPal’s case it only served to bring about a host of new problems. During the week of its IPO the company was sued by a competitor and banned from operating in the state of Louisiana. And the legal and regulatory onslaught didn’t let up; within a few months the company faced multiple class action lawsuits and even had New York’s aggressive attorney general, Eliot Spitzer, investigating its business practices.
“The modern business environment turned out to be more hostile than even our fiercest competitor,” concludes Jackson. “It’s miraculous that PayPal is around today given the long odds we once faced.”
Discovering how PayPal survived its clashes with lawyers, Mafia, and the competition makes THE PAYPAL WARS a compelling read-albeit not one for the faint of heart. National Review contributor Michael New says “you’ll be amazed by PayPal’s death-defying origins.” AuctionBytes calls the book “intense from cover to cover.” But popular Internet sales strategist Skip McGrath perhaps sums it up best: “Reading THE PAYPAL WARS is like watching the last two minutes of a championship football game that is tied 21-21-and then goes into sudden death overtime.”
Murdok | Breaking eBusiness News
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