Google Checkout Released & What It Means
June 30th, 2006 by Matt InglotGoogle has officially released their new checkout product, allowing them to finally provide payment processing services. Following the standard Google model they have linked the technology back to AdWords and added some extra twists. The major news right now is the pricing - the fee is 2% + 0.20 and can be knocked down to free by spending money on AdWords.
Needless to say this competes directly with PayPal and could lead to some positive changes in the online payment process. I’ve long been frustrated with how difficult it can be to accept money from willing customers online, and the amount of sales that are lost to imperfect verification systems and fraud. I’m not sure if I’ll ever end up using Google’s product itself (currently it’s only availabe in the US, so it’s not even an option at the moment), but I expect the entrance of a major competitor to make the other processing comapnies work a little harder to attract merchants.
Why is Google launching a payment processor such a big deal? Aside from the brand name, this establishes a very important piece of the Google strategy. With so many diverse yet highly complimentary services, they are slowly but steady building their own user internet and all the benefits that come with. Let’s recap the major Google services:
- Search
- AdWords
- GMail
- Maps
- Froogle & Base Services
- Checkout
Summing the above up, we now have a location-aware online “brain” (for lack of a better word) that can find and intelligently relate a vast database of information, facilitate communication, suggest all manner of related products along the way, and now complete the process by allowing users to buy items without ever venturing off Google. Each of the above is in itself a service, but it’s also a building block for other services. Nowhere is this more evident than Google Base, a “classified ads” database that takes advantage of Google’s massive map database to display location-based results and it’s excellent search for highly accurate searches. How long do you think it’ll take for Google Checkout to appear there as well? I’m sure e-Bay has taken note.
It’s going to take time to really know the effects that Google’s increasing powers will have. History hasn’t shown encouraging results from companies having such a large scope of control. Once the world is fully hooked into Google we might see the emergence of a host of new micro fees for services that we once took for granted. A very interesting internet-based monopoly might develop as few companies will have the capital to hope to build up the kind of infrastructure Google has to be able to compete with the functionality of its services (unless you can license the use of the data and technology from Google… hmmm).
On the other hand Google has done a lot to advance internet technology and unleash an amazing wealth of information to anyone with internet access. It’s hard to imagine that search, mapping, and commerce would be so integrated without it, particularly looking at Yahoo and Microsoft’s attempts to get search right or Hotmail charging for the ability to search your 250MB e-mail account. Google is definitely a positive presence today, and I hope that their contributions to advancing information accessibility continue to match the tremendous power that they yield.
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June 30th, 2006 at 7:34 am
Matt, It’d be interested to hear what you have to say about Google and China? I referenced it in my blog, but I’d be interested in the viewpoint of someone who’s willing to do a bit more research (read: NOT me).
July 8th, 2006 at 4:19 pm
Hey Asher,
Sorry for not responding earlier, you caught me right on the way out for a long weekend of not working.
I don’t really know too much about Google and China other than the fact that Google had made some major compromises to be able to reach a massive market. Specifically the Chinese version of Google censors the content in order to obey government laws there.
This is unfortunate but a problem with the Chinese government far more so than Google. While it does put a heavy focus on ethics, Google is ultimately a corporation and not a charity, and with this structure it is practically obligated to make the moves it has made in China. Had it not done so would mean that competitiors like MSN would get the massive Chinese market, providing tremendous leverage against Google.
Should Google have chosen to not cater to China until censorship of the internet there disappeared, Google would have a long and hard battle to gain users in a MSN and Yahoo dominated country (I believe Yahoo censors too, and I know MSN does).
It really comes down to game theory. They definitely made the right choice in the interests of their continued survival and growth.