PayPal and Topica Partner to Enable Ecommerce for Email Publishers

May 21, 2002

PayPal, a leading Internet payment service, and Topica Inc., a leading provider of self-service email publishing products, today announced a partnership which brings integrated ecommerce capabilities to email marketing. Small businesses, non-profits, web entrepreneurs and other users of the Topica Email Publisher product can now create secure PayPal "Buy It" buttons directly within the Topica application while designing their newsletters to collect sales, donations, or tips from their subscribers.

"Small organizations know that using email is a powerful and inexpensive way to reach current and potential customers, but in the past their ecommerce efforts have been limited by the relatively cumbersome path for the recipient from email to final sale," said Scott Olrich, Topica Senior Vice President of Corporate Development. "Topica's integration with PayPal -- one of the first-ever between a publishing platform and a payment platform -- has removed the obstacles for impulse and non-impulse buyers, and a sale is now only a mouse-click away."

As part of the partnership, PayPal will promote Topica Email Publisher to its 16 million accounts as an additional avenue for increasing sales. In exchange, Topica will promote the availability of PayPal's ecommerce functionality to its userbase of publishers. The ability to integrate PayPal into email newsletters will also be offered to users of Topica Exchange, Topica's free community-based email service.

"Many of our small business customers sell goods and services through auctions and through their own website storefronts," said Peter Ashley, PayPal Director of Business Development. "We're looking forward to introducing them to Topica Email Publisher -- an easy and inexpensive way to increase their sales through an additional channel of communication with their customers."

About Topica, Inc.

Topica is the leading provider of self-service email products, delivering over 1 billion email newsletters and discussion group messages each month. Its customers include some of the nation's largest publishing companies including IDG Communications; People magazine; CMP Publications; The National Geographic Society; and Vanguarde Inc, publisher of titles including Honey and Savoy. The company also works with large corporations, such as IBM, non-profits and small and mid-sized companies. Altogether, over 100,000 publishers use Topica's email delivery products. The company was founded in 1998 and is backed by investors including Morgan Stanley, TLCom, Ltd., August Capital, and Highland Capital Partners.

About PayPal

PayPal enables any business or consumer with email to send and receive online payments securely, conveniently and cost-effectively. PayPal's account-based network builds on the existing financial infrastructure of bank accounts and credit cards to create a global payment system. PayPal has more than 16 million member accounts, including more than 3 million business accounts. In 2001, PayPal processed over $3.5 billion in payments.

Based in Mountain View, California, PayPal is available to users in 38 countries including the United States. Further information about the company can be found at www.paypal.com.

Forward Looking Statements

This press release contains forward-looking statements about PayPal that involve risks and uncertainties that could cause PayPal's actual results to differ significantly from those projected. Factors that might cause or contribute to such differences include, but are not limited to, PayPal's ability to implement successfully strategies to increase the adoption of PayPal's electronic payment methods and PayPal's ability to compete with other payment systems. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this release. PayPal's filings with the Securities and Exchange Commission, including PayPal's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002, include more information about factors that could affect PayPal's financial results.

CONTACT: PayPal, Inc., Mountain View, Julie Anderson, 888/337-3533, julie@paypal.com or Topica PR Lloyd Rivera, 415/344-3836