War of Internet Giants
What Google is up to?
Last year at about this time, the Internet was abuzz with rumours that Google was going to offer an on-line payment system that would compete with PayPal, the Web-based transaction service owned by eBay. Several media outlets, including The Wall Street Journal, ran stories about what this new service would involve, quoting anonymous merchants who were reportedly involved in beta tests of something then known as "Google Wallet."
Google CEO Eric Schmidt poured cold water on the idea, saying that while the search company was working on some form of payment-handling service, it was not a "person-to-person" or "stored value" system like PayPal's. And as the months passed by without any earth-shattering news about a Google PayPal-killer, the story was largely forgotten.
More than one analyst noted, however, that Mr. Schmidt's denial left a lot of room for a Google service that could cause significant damage to eBay or PayPal, or both. And while Google isn't quite there yet, it has rolled out a series of features that involve on-line payment over the past six months, enough to get a picture of what might be coming a little further down the road.
Those features include a "soft launch" in February that allowed Google users (those who have registered with Gmail or other Google services) to type in a credit card number and buy videos from Google Video or T-shirts from the Google store. Once a card is added to an account, users can also buy items from the growing Google Base database of classifieds.
And that's where things could start to get interesting, not just for consumers but for businesses as well. While the service is still in "beta test" mode, and is poorly understood even by some analysts who have looked at it, Google Base has the potential to become a significant threat to both PayPal and eBay if Google expands the coverage and features that it offers.
The search company is even more likely to want to do that now, in the wake of the partnership deal announced by eBay and Yahoo last week, in which the on-line auctioneer and the Internet portal will exchange services, including PayPal and possibly a "click to call" ad service using Skype's Internet phone service. Some have described the deal as a variation on the "enemy of my enemy is my friend" idea, with the target being Google.
Speculation about Google ramping up its payment services was also fuelled this week by news that it had registered the Internet addresses Googlecheckout.net and GoogleMasterCard.com (although the search company has been known to register addresses that it never uses). There were also reports on Google-tracking blogs about a private test of an expanded Google payment service involving a number of "high-quality" merchants.
At the moment, when you click to buy something through Google Video or the Google Store, you have to sign an agreement with Google Payment Corp. -- a company the search engine giant set up last fall. Going to "purchases.google.com" brings you to a login screen for your Google account, and the site then presents you with a list of all the videos and other items you've bought.
In other words, the structure is already there to support a whole range of purchasing. And while it is still early days for Google Base, the service has already been used by car dealers and real estate agents as a classifieds-style service, one that allows companies to upload their own database of items (hence the name Base) relatively easily. This could put the service squarely in the same camp as eBay, and appeal to that company's core market of "power sellers."
Silicon Valley venture capitalist Bill Burnham has said a Google shopping portal could provide stiff competition for eBay's "Buy It Now" feature, which accounts for about 35 per cent of eBay's revenue. Among other features, he notes that Google Base doesn't charge listing fees (as eBay does), only transaction fees -- although that might change if the service were extended to small businesses.
The potential for Google's payment services could be even broader than just Google Base, however. Forrester analyst Charlene Li points out that Google already accepts payments from its partners in the AdSense program, which gives it a good platform to launch a micropayment-style service, one that would allow consumers to pay tiny amounts for Web content, all of which could be aggregated by Google and distributed to publishers.
The official Google blog says that "on-line billing and payments have been a core part of our offerings for some time," and that, over the past four years, Google has "billed advertisers in 65 countries more than $11.2-billion [U.S.] in 48 currencies, and made payments to advertising partners of more than $3.9-billion." That's not a bad start if you want to take on PayPal and try to become the MasterCard or Chase-Manhattan Bank of the Internet.
Show me the money
PayPal
In 2005, PayPal handled payments totalling $8-billion (U.S.), up 45 per cent from 2004, and the company's revenue crossed the $1-billion mark for the first time; it has 96 million registered users.
Google
Over the past four years, Google has billed advertisers in 65 countries more than $11.2-billion (U.S.) in 48 different currencies, and made payments to advertising partners of more than $3.9-billion.
Last year at about this time, the Internet was abuzz with rumours that Google was going to offer an on-line payment system that would compete with PayPal, the Web-based transaction service owned by eBay. Several media outlets, including The Wall Street Journal, ran stories about what this new service would involve, quoting anonymous merchants who were reportedly involved in beta tests of something then known as "Google Wallet."
Google CEO Eric Schmidt poured cold water on the idea, saying that while the search company was working on some form of payment-handling service, it was not a "person-to-person" or "stored value" system like PayPal's. And as the months passed by without any earth-shattering news about a Google PayPal-killer, the story was largely forgotten.
More than one analyst noted, however, that Mr. Schmidt's denial left a lot of room for a Google service that could cause significant damage to eBay or PayPal, or both. And while Google isn't quite there yet, it has rolled out a series of features that involve on-line payment over the past six months, enough to get a picture of what might be coming a little further down the road.
Those features include a "soft launch" in February that allowed Google users (those who have registered with Gmail or other Google services) to type in a credit card number and buy videos from Google Video or T-shirts from the Google store. Once a card is added to an account, users can also buy items from the growing Google Base database of classifieds.
And that's where things could start to get interesting, not just for consumers but for businesses as well. While the service is still in "beta test" mode, and is poorly understood even by some analysts who have looked at it, Google Base has the potential to become a significant threat to both PayPal and eBay if Google expands the coverage and features that it offers.
The search company is even more likely to want to do that now, in the wake of the partnership deal announced by eBay and Yahoo last week, in which the on-line auctioneer and the Internet portal will exchange services, including PayPal and possibly a "click to call" ad service using Skype's Internet phone service. Some have described the deal as a variation on the "enemy of my enemy is my friend" idea, with the target being Google.
Speculation about Google ramping up its payment services was also fuelled this week by news that it had registered the Internet addresses Googlecheckout.net and GoogleMasterCard.com (although the search company has been known to register addresses that it never uses). There were also reports on Google-tracking blogs about a private test of an expanded Google payment service involving a number of "high-quality" merchants.
At the moment, when you click to buy something through Google Video or the Google Store, you have to sign an agreement with Google Payment Corp. -- a company the search engine giant set up last fall. Going to "purchases.google.com" brings you to a login screen for your Google account, and the site then presents you with a list of all the videos and other items you've bought.
In other words, the structure is already there to support a whole range of purchasing. And while it is still early days for Google Base, the service has already been used by car dealers and real estate agents as a classifieds-style service, one that allows companies to upload their own database of items (hence the name Base) relatively easily. This could put the service squarely in the same camp as eBay, and appeal to that company's core market of "power sellers."
Silicon Valley venture capitalist Bill Burnham has said a Google shopping portal could provide stiff competition for eBay's "Buy It Now" feature, which accounts for about 35 per cent of eBay's revenue. Among other features, he notes that Google Base doesn't charge listing fees (as eBay does), only transaction fees -- although that might change if the service were extended to small businesses.
The potential for Google's payment services could be even broader than just Google Base, however. Forrester analyst Charlene Li points out that Google already accepts payments from its partners in the AdSense program, which gives it a good platform to launch a micropayment-style service, one that would allow consumers to pay tiny amounts for Web content, all of which could be aggregated by Google and distributed to publishers.
The official Google blog says that "on-line billing and payments have been a core part of our offerings for some time," and that, over the past four years, Google has "billed advertisers in 65 countries more than $11.2-billion [U.S.] in 48 currencies, and made payments to advertising partners of more than $3.9-billion." That's not a bad start if you want to take on PayPal and try to become the MasterCard or Chase-Manhattan Bank of the Internet.
Show me the money
PayPal
In 2005, PayPal handled payments totalling $8-billion (U.S.), up 45 per cent from 2004, and the company's revenue crossed the $1-billion mark for the first time; it has 96 million registered users.
Over the past four years, Google has billed advertisers in 65 countries more than $11.2-billion (U.S.) in 48 different currencies, and made payments to advertising partners of more than $3.9-billion.
posted by Timur S @ 9:28 AM
<< Home