Google is taking over the Internet, one company at a time.

Google Inc. is reportedly preparing an online-payment system that would compete with PayPal, the largest internet payment system and the top choice of the eBay auction site, according to the New York Times.

The Times reported that an online retailer has been approached by Google to help them with this new venture.

Some people have already named the new system “Google Wallet”, according to Scot Wingo, chief executive of ChannelAdvisor, who told The New York Times that several of his clients referred to this as the name of the payment service.

Google’s flagship search engine and its Froogle shopping service attract Internet customers but the company only gets revenue from selling ads that appear next to search results.

This service would allow Google to compete with eBay as well as with the popular free site Craigslist.

A payment system would help Google bring individuals and small businesses who are not authorized to accept credit cards online into its marketplace, says the Times.

As word spread of Google’s plans, eBay Inc. shares fell Monday as analysts believe Google’s plans to expand into electronic payments would overwhelm the online auction web site’s PayPal business, reported Business Week Online.

Shares of eBay Inc. fell 61 cents to $37.44 on Monday afternoon trading of the Nasdaq.

PayPal is one of eBay’s most profitable sources of revenue, accounting for $233.1 million of eBay’s total first-quarter revenue of $1.03 billion, says Business Week Online.

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