eBay Buys Zong for $240 Million

eBay consolidated PayPal's mobile payments reach by acquiring Zong, a world-wide mobile payments platform. This transaction will fit perfectly in PayPal's new strategy, focused on digital goods and micro-transactions.

Zong allows service payments through mobile carrier billing. The company currently serving 3.2 billion users in 21 languages, 45 countries and managing connections with over 250 mobile carriers.

Its main revenue source comes from online gaming, allowing users to pay game features with their phone bill.

Some of Zong's most famous partners include Sony Online Entertainment, Zynga, Playdom (recently acquired by Disney), IMVU, Sulake, Big Fish Games and Bigpoint.

In a blog post on Zong's website, David Marcus, the company's long-time CEO thanked all his colleagues and partners for their long-time support, while also giving his thoughts on the future of e-commerce itself.

“Most of e-commerce will shortly become m-commerce, and I genuinely believe that PayPal, hand-in-hand with wireless carriers around the world will win in a big way,” said Mr. Marcus.

Zong's acquisition will probably determine PayPal to revise its mobile payments market estimation once again, after at the end of June 2011, the company changed its yearly total mobile payments projection from $2 billion to $3 billion.

Currently, Paypal handles around $10 million a day in mobile payments.

Some of PayPal's mobile payments servicesinclude PayPal payment apps for iPhone, Android, Nokia and Blackberry, location-based shopping with Where.com, Mobile Express Checkout for merchants and numerous PayPal Mobile Payments libraries for app developers.

Growth in the mobile sector has boosted competition for PayPal. At this moment its main adversary seems to be Google's newly launched Wallet service.

This is eBay's fourth acquisition this year. The company coughing only $240 million for Zonga, quite a small sum, compared to its blockbuster acquisition, GSI Commerce for $2.4 billion.

The other two eBay transactions were Magento for an undisclosed sum and WHERE Inc. for $135 million.