EBay Inc.’s (EBAY) PayPal plans to unveil a new system that makes it easier for software developers to integrate the online payments system right into their programs–as the company takes new steps to protect its turf.

With the new open software, called Paypal X, users won’t have to type their username and password into a separate PayPal Web site in order to complete a payment. Instead, people will be able to sign into PayPal and make purchases, such as virtual weapons, right inside an application such as a game.

“We’re taking all of our product capabilities and making them open and that much easier for you to use,” said Scott Thompson, PayPal’s president.

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Five months ago, a group of media executives including Steven Brill seemed to have the field to itself when it said it was building a system for newspapers to charge readers for access online.

Now, that group appears have a lot of company, like the News Corporation (NWS), led by Rupert Murdoch, and the technology giants Google (GOOG), Microsoft (MSFT) and I.B.M. (IBM), whose interest was first reported this week.

But publishing executives and analysts caution against concluding that this proves there is a robust competition to develop such systems, or even that newspapers will rush to join any of the projects. The contributions of Google and some others are little more than a set of ideas, written up at the request of the Newspaper Association of America, which inadvertently made them public on its Web site.

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The hacking of Twitter CEO Evan Williams’s email account has sparked an ethics debate after TechCrunch said that it would publish some of the confidential documents that the hacker leaked.

The brouhaha began when TechCrunch founder Michael Arrington blogged that a French hacker calling himself “Hacker Croll” said he had broken into Mr. Williams’s account as well as those of Mr. Williams’s wife and two Twitter employees.

An English translation of a post on French blog Koren shows that the hacker claims he gained access to Mr. Williams’s Gmail, PayPal, Amazon (AMZN) and AT&T (T) accounts, among others, and thus was able to find documents containing Twitter employee food preferences, credit card numbers, phone numbers and salaries.

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EBay (EBAY) this afternoon announced that it plans to spin off Skype via an initial public offering in the first half of 2010. The company said specific timing of the IPO will depend on market conditions. The announcement did not say whether eBay would maintain a stake in the company.

In a statement, eBay CEO John Donahoe said that Skype is “a great stand-alone business with strong fundamentals and accelerating momentum, but that it has “limited synergies with eBay and PayPal.” He adds that operating Skype as a stand-alone company “is the best path for maximizing its potential.”

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EBay (EBAY) is on a mission to woo developers at the Web 2.0 Expo this week in San Francisco.

During a keynote speech Wednesday, eBay CTO Mark Carges told an audience filled with Internet start-ups that “nothing matters more than getting paid for the hard work that you do.” EBay knows a thing or two about making money, he said, before unveiling a new program to open up the company’s marketplace platform and PayPal services to outside developers.

On Thursday, Carges elaborated on that plan in an interview. Web 2.0 start-ups have tended to go after critical mass audience first–and then worry about making money later, he said. “It was easy for one to assume that you can move into an advertising model eventually,” Carges said, “and this has been reinforced by the way that a lot of venture capital firms have run boards of these companies.”

But that kind of thinking is likely going away in the recession out of necessity. Now he wants eBay and PayPal to become a part of start-up business models.

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EBay’s (EBAY) PayPal kicked off the Web 2.0 Expo in San Francisco Wednesday with a frightening presentation on the “arms race” between online fraudsters and online retailers and shoppers.

Online fraud is becoming so lucrative, said Katherine Hutchison, PayPal’s senior director of global risk management, that it has developed into an industry with specialized players that hire each other in areas such as harvesting credit card numbers and freight forwarding. “A single professional thief doesn’t have to have all of the skills needed to commit fraud,” she said.

Here’s one trick: Fraudsters use telephone services designed for the deaf to get an operator with a friendly (and middle-American) sounding voice to make calls on their behalf to a call center. “The telephone operator could realize this is very likely to be fraud, but they are legally blocked from saying anything other than what the person placing the call tells them to say,” said Hutchison.

Old techniques to track down fraudsters are becoming less helpful, she added.

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The fundamental debate over eBay (EBAY) boils down to this: The stock certainly looks cheap–trading at around eight times Street estimates for 2009 earnings. But the core business still appears to many to be fundamentally broken.

At a meeting with analysts yesterday, eBay laid out an aggressive three-year forecast which places increasing importance on PayPal and anticipated little or no growth in the core Marketplaces business. A number of analysts view the projection skeptically, noting that the company didn’t provide details on the short-term outlook; they also say that the forecast is predicated on an economic recovery in 2010 that not everyone is convinced will develop. Several analysts noted that, at current valuation levels, the stock largely reflects the value of PayPal, Skype (which many think is available for sale at the right price) and the company’s cash position, and effectively puts zero value on the core business. But with a turnaround of that unit still unfolding, few see a need to jump into the stock now.

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At a time when most companies aren’t willing to offer guidance on the March quarter, eBay (EBAY) is laying out its vision for 2011.

And what it sees is a big opportunity for PayPal.

In connection with the company’s analyst meeting today, eBay said its growth will be driven by its two core businesses: PayPal and e-commerce. In something of a repositioning, the company says that PayPal “has become a second core business,” with an opportunity to become even bigger than eBay Marketplaces.

CEO John Donahoe said in a statement that the company expects PayPal to become “the next leading online global payments network” and that PayPal is “one of the most exciting and high-potential opportunities anywhere online today.” That’s important, because the company isn’t really expecting to see any growth from the Marketplaces business, which has been shrinking in recent quarters.

Meanwhile, he said the company is “aggressively remaking and transforming” the Marketplaces business.

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Ever wonder what happens to your Facebook account after you die? Someone does.

That someone is Legacy Locker, a new online service announced Tuesday that allows people to securely store usernames, passwords and other access information for all their digital assets–from Facebook and MySpace accounts to Gmail and PayPal–and pass that information along to beneficiaries in the event of their death.

Jeremy Toeman, co-founder of Legacy Locker, a San Francisco start-up, says this kind of system is a lot easier than trying to wrestle the information out of social-networking sites and Web companies as a family member of the deceased. “It’s the online equivalent of a safety deposit box,” Toeman says.

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On Wednesday, eBay (EBAY) will hold a meeting with analysts to discuss the current business and strategy. There is little expectation that the company will announce any dramatic moves, and concern about the health of the business remains high, as expressed by eBay’s surprisingly low P/E–the stock trades at just seven times expected 2009 results. Of the 29 analysts tracked by Thomson who follow the company, only four rate the stock a Buy or Strong Buy.

But Marianne Wolk, an analyst at Susquehanna Financial Group, one of the few outright bulls on the stock, asserts that eBay actually has a variety of options which could unlock substantial shareholder value. In a research note this morning, Wolk runs through a variety of ways that eBay could potentially re-energize the Street about the stock:

• Boost the value of PayPal through a strategic partnership with Google (GOOG). She notes that PayPal and eBay have massive amounts of data on consumer online shopping behavior that could be tremendously valuable in terms of ad targeting. “With PayPal’s conversion and spending data, Google could significantly improve ad targeting, raise click-through rates” and increase cost per click rates, she says.

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Last year, here on the Voices blog, I asked you all for your thoughts on how to finance and put out my next record. I got some swell advice, as well as some good wishes. Many agreed that the patronage system–asking fans to donate money–was a promising idea.

I really had no idea if I would make it, or end up embarrassed with just my mom donating at the “polished rock level.” By the way, the polished rock level (free early download) was $10. But you could donate all the way up to “weapons-grade plutonium” ($10,000), where you get to sing a duet with me. One businesswoman from the United Kingdom, named Jo Pottinger, flew in last month to sing and, honestly, did a bang-up job.

So, how have I spent my money so far? Well, I got production help from my pal Don Was (The Rolling Stones, Bob Dylan, Willie Nelson, Bonnie Raitt). He got me a great rate at the old A&M studios (where Carole King did “Tapestry,” Joni Mitchell did “Blue” and where so many of my favorites recorded). Normally, I would never be able to afford to record there.

He also hooked me up with some of my favorite old-time session players, like Jim Keltner, who played on all those Beatles solo records. We recorded old-school and played live with not much overdubbing–and that includes the vocals.

I wanted to have the energy and looseness of some of my favorite childhood records, before everything got so quantized and auto-tuned. And because of that, we did it really fast.

Oh, I have also booked a day where I will sing and play guitar on 10 songs to a click track. My idea is to release it with the audio files so that people (pro or amateur) can put the tracks on their garage band or pro-tools and mix, produce and deconstruct the songs as they see fit. Thinking of having a contest for the best production.

So, now that I have spent a little more than half my budget on recording, plus another $10,000 on various stuff (donation prizes, Webmaster fees, the PayPal percentage, iPhone apps), I have around $25,000 left to play with.

I still don’t want to license the record to any of the labels. But now I have to figure out how to do all the things they traditionally do (distribution, marketing, publicity) and take advantage of the opportunities with new media (which they have not been so great at).

There have been more than a few companies that have come to me with their new paradigms for how to make money in this digital age–mostly how they can make money. I am trying to look at all of them (some do sound sort of promising and intriguing).

Oh, and I still want to have hard copies available too–I have a friend who will make a mini graphic novel that would include two pages for every story (song).

So here I am, asking you smartypants AllThingsD.com people for ideas. You do seem to know more than most in the “industry.”

By the way, I reopened the Jillsnextrecord site recently, upon request, for those who told me they wanted to donate and have their names in the liner notes (or sung in a song). If any of you are interested–and I’m just saying–it will still be up until we go to the printers in a week or two.

Amazon.com (AMZN) has quietly launched “Checkout by Amazon,” an e-commerce checkout service for online merchants that is taking on eBay’s (EBAY) PayPal Merchant Services offering, several analysts noted today.

Derek Brown, an analyst with Cantor Fitzgerald who had previously noted that such a service might be in the works, says the new service allows Amazon.com customers to use their stored payment and shipping information on participating merchant sites. He notes that the service provides businesses a way to manage shipping charges, sales tax and promotions, as well as post-sales activities, including refunds, cancellations and charge-backs. Brown, who has a Sell rating on eBAY, says the development “has added to our concerns around eBay shares.”

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Amazon.com (AMZN) has been aggressively rolling out a variety of Web-based services, including on-demand computing power and data storage. Could the company’s next move be to go after eBay (EBAY) subsidiary PayPal’s dominant franchise on online payments?

Cantor Fitzgerald analyst Derek Brown asserts in a research note this afternoon that Amazon “may soon launch a PayPal-esque Payments service for use by consumers and merchants across the Web, potentially siphoning growth and/or profit from eBay’s crown jewel.” Brown says that Amazon could launch such a service as soon as late summer or early fall of this year.

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Is Microsoft (MSFT) interested in taking a stake in eBay’s (EBAY) PayPal and Skype units?

Stifel Nicolaus analyst Scott Devitt asserts in a research note this morning that he has “thought it possible for Microsoft to attain an equity ownership interest in PayPal/Skype.” He notes that display ads for Microsoft’s program for providing cash back to consumers who make purchases through MSN have shown up on eBay, and that all of eBay’s fixed price items qualify for the program. He also notes that the cash-back program offers PayPal deposit of refunds.

Manwhile, Devitt this morning upped his rating on eBay to Buy from Hold; he maintains his $35 price target on the stock.

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Tired of the United States and the other 190-odd nations on Earth? If a small team of Silicon Valley millionaires get their way, in a few years, you could have a new option for global citizenship: A permanent, quasi-sovereign nation floating in international waters. With a $500,000 donation from PayPal founder Peter Thiel, a Google engineer and a former Sun Microsystems programmer have launched the Seasteading Institute, an organization dedicated to creating experimental ocean communities “with diverse social, political and legal systems.”

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