PayPal in talks with state officials to expand Boston office

By Scott Kirsner, Globe Columnist

Governor Deval Patrick and Lieutenant Governor Tim Murray were entertaining a visitor from Silicon Valley last November: Scott Thompson, a Raynham native and Stonehill College alumnus who was hired last week as Yahoo's new chief executive.

But last year, Thompson (pictured at right) was still the president of PayPal, the electronic payments division of eBay, and he was at the State House to talk with the state's top two officials about expanding PayPal's presence in Boston. Accompanying Thompson were two Boston-based executives — Walt Doyle and David Chang — who had joined PayPal after their company, Where Inc., was acquired last spring. The company currently employs just over 100 people at its office in the North End, which is evolving into a "center of excellence for mobile development and ad technology," in Doyle's words.

Doyle told me earlier this week that PayPal could be adding "several hundred people" in Boston over the coming years. (There are currently only three open jobs in Boston that I could find.) While Thompson has since moved on from PayPal, eBay's government relations staffers plan to pay another visit to Beacon Hill next week to continue the discussions.

In November, the governor and lieutenant governor "made the case for Massachusetts: the strong and growing industry cluster, the talent pool, etc.," explains Greg Bialecki, the state's secretary for housing and economic development, via e-mail. With companies headquartered elsewhere, he says that "we invite them to ask Microsoft, Google, Cisco, Novartis, Sanofi, etc. about how their decisions to take a major position here have been very good for them."

But in the November meeting, "there was not a discussion of financial incentives" to encourage eBay to grow its PayPal presence here, Bialecki says. While the topic of a tax break for adding jobs in the state could be discussed at future meetings, he says, "incentives often aren’t the primary issue for companies like this." (Presumably, being able to hire talented software developers is.) But last December, the state did OK a $3.4 million tax credit for open source software company Red Hat, which plans to add 181 jobs at its Westford engineering headquarters. (Red Hat also got almost a million dollar break on its property taxes from the town.)

Before its acquisition by eBay, Where had built the largest location-based advertising network, Doyle says, which enabled it to display ads as you used apps on your mobile phone that were relevant to where you were standing. Now, as PayPal seeks to be a payment system that consumers can use for bricks-and-mortar purchases, not just online ones, the Where group will be responsible for "demand generation," Doyle says. That means delivering ads and special offers to your mobile phone that might encourage you to buy some fresh flowers or try a new restaurant for lunch. (And eventually, pay using the PayPal "mobile wallet" app on your phone.)

"You might be listening to music on your Pandora app," Doyle says, "and you see an ad for a Dyson vacuum cleaner or a Sony Blu-ray player. Because of the information we have from eBay, we might know that you've been searching for those items, or maybe you lost an auction for something similar. We'll be able to show you those products available locally, and possibly deliver discounts that will get you to utilize your mobile wallet in a store."

Doyle says that while other mobile advertising start-ups, like Quattro Wireless and M-Qube, saw their Boston offices disintegrate following acquisitions, his goal is to keep the Boston office growing within PayPal. (A few weeks before PayPal acquired Where, it purchased a much smaller Boston company focused on mobile payment technology, Fig Card.)

Already, Doyle says he is in the market for expanded office space. He says the group will most likely stay in Boston, as opposed to moving to Cambridge or the suburbs.