Filed by eBay Inc. Pursuant to Rule 425
                                                Under the Securities Act of 1933
                                                  Subject Company:  PayPal, Inc.
                                                   Commission File No: 000-49603

This filing relates to a proposed merger between eBay Inc. (the "Company") and
PayPal, Inc. ("PayPal") pursuant to the terms of an Agreement and Plan of
Merger, dated as of July 7, 2002, among PayPal, the Company and Vaquita
Acquisition Corp.

         The following is the text of a document posted on the Company's


A couple of weeks ago at eBay Live I promised you that I would continue to
listen to your input as we grow the eBay marketplace. So today, I am excited to
announce our plans to acquire PayPal, Inc., the most popular online payment

Since many of our users offer PayPal's services, this acquisition makes a
tremendous amount of sense. Integrating PayPal's services into our platform is
something that many of our users have asked us to do. We believe it will enhance
our users' experience by allowing buyers and sellers to trade with greater ease,
speed and safety.

We expect the acquisition to be finalized around year-end 2002. Until then,
PayPal or eBay Payments (Billpoint) services will continue to function as
independent providers of online payment services. When the acquisition is
finalized, we plan to phase out eBay Payments (Billpoint) as we integrate the
PayPal service. We will provide more detailed information about eventual
integration of PayPal in the weeks and months ahead.

We look forward to working with eBay Payments (Billpoint) users to ensure a
seamless transition to PayPal, and with PayPal's users as we integrate PayPal
into our site.

For more details, please see the press release at and the FAQ at XXX. Look for
the webcast at



Investors and security holders are urged to read the proxy statement/prospectus
regarding the business combination transactions referenced in this presentation,
when they become available, because they will contain important information. The
proxy statement/prospectus will be filed with the Securities and Exchange
Commission by eBay. Investors and security holders may obtain a free copy of the
proxy statement/prospectus, when available, and other documents filed by eBay
and PayPal with the Commission at the Commission's web site at Free copies of the proxy statement/prospectus and eBay's
other filings with the Commission may also be obtained by directing a request to

at Free copies of PayPal's filings may be
obtained by directing a request to PayPal at