Google to launch PayPal rival?

Google could be about to launch its own internet payments service to rival eBay-owned PayPal.

According to a report in the New York Times, speculation about the new payment service arose following discussion at a conference held by analyst house Piper Jaffray, where the chief executive of a major online retailer spilled the beans.

The CEO, who spoke under condition of anonymity, said Google had approached his company to take part in the online payments service.

Google did not respond to requests for comment on the reports.

Any potential move into the payments sector could prove lucrative - PayPal earned eBay $233m in the first quarter of this year. However, should Google decide to enter the online payments arena, it may affect the company's relationship with one of its largest advertisers, PayPal parent eBay.

Stranger things have happened. Google is already rumoured to be venturing into new territories such as VoIP, and has added a number of new services to its portfolio of late, including a maps and local services feature; a browser toolbar and domain registry.