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EBay Agrees To Buy VeriSign Online Payment Service

EBay Inc. on Monday said it has agreed to buy VeriSign Inc.'s online payment service for $370 million in cash and/or stock, a move that would significantly expand EBay's PayPal service while taking VeriSign out of the payment-processing business.

Under the agreement, VeriSign, based in Mountain View, Calif., becomes the "preferred security vendor" for the San Jose, Calif.-based online auctioneer, a VeriSign spokesman said. Along with the payment service, EBay has committed to buying next year from VeriSign up to a million security tokens, which are security devices that often attach to a keychain and display a changing number that is typed in as a password to log into a network.

"This is just the kick off of a larger relationship between our two companies," Brendan P. Lewis, spokesman for VeriSign, said.

EBay has agreed to pay $370 million in cash and/or stock for VeriSign's payment gateway business, which processed more than $40 billion in transactions last year, according to VeriSign. The deal is expected to close in the fourth quarter, pending regulatory approval.

The agreement effectively lets VeriSign consolidate its resources around transaction security.

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