Internet giant Yahoo has tied up with Paypal. Basically users of Yahoo search will see a little blue cart next to the results. The cart indicates that the merchant accepts Paypal, and that the buyer can buy easily and safely with Paypal. Also as Yahoo’s Tim Mayer puts it in his blog, you need not go about revealing your credit card and other information to all sellers. That point, elementary though it may seem, is a very valid one.

What does this move have in store for Google and its own payment program Google Checkout, of which Paypal is a rival?. Ofcourse Paypal has been in the market longer than Google Checkout, and this association with Yahoo might just see Paypal take a clear lead in the online payment processing market. Yahoo is easily Google’s biggest rival when it comes to online searches. In some markets, Yahoo leads Google, although big G is still the overall leader.

Google already has a similar system in place with Google Checkout. Some analysts say that this means that Yahoo is copying Google. So how should Google feel guys? Flattered or worried :D

YPN hasn’t been as good as Adsense. Whether or not this move will achieve its dual purpose- weaken Google and increase revenue, remains to be seen :)