More on Google Payments from Internetnews.com

March 16, 2006
Google Eyes Retail Sector
By David Miller

Amazon is now offering low-cost online data storage to users, Microsoft wants to be the search site of choice, Yahoo is involved with VoIP services, and Google seems to want to break into retail.

On Thursday, Google rolled out a limited trial of its new online payment processing service. The company is also rumored to be building a high-end virtual mall for European retailers.

With Google's payment processing offering, users of the Google Base classified ads service will now be able to accept credit card payments from buyers.

Google Base, still in beta, debuted in November. Users can post virtually any sort of legal content or advertising to the service, and Google will then index and make the content findable via Google's search engine.

Analysts have speculated that Google Base could be a Craigslist killer. Craigslist carries the sort of classified ads for jobs, apartments and other services that newspapers used to count on for a steady revenue stream.

But with the advent of Google's payment processing service, the circle of potential Google victims now includes eBay and its PayPal online payment processing service.

And just like PayPal, the Google Payments service could be offered to other vendors as an e-commerce payment platform. At the moment Google charges $0.25 and 2.5 percent per transaction, compared to PayPal's charges of $0.30 and 2.9 percent for items priced under $3,000 on eBay.

"It's clear when you look at it who the competition is; clearly Google is going after eBay and PayPal," said Andy Beal, CEO of Fortune Interactive, a search marketing consulting firm based in Raleigh, N.C.

Beal pointed out that while other companies have tried to break into the universal online payment processing business, these services didn't prosper because they were launched after PayPal already had captured a large market share.

"PayPal also got a huge shot in the arm from eBay. So with that much clout, it was difficult for anybody to challenge PayPal. But now here comes the 800-pound gorilla called Google. They have got the clout to do this. It's a natural extension of what they've been doing," said Beal.

Google began testing the Google Base payment service in late February. And there was little fanfare at its launch.

Last month some Google Base browsers noticed they could purchase videos via their Google accounts, just as they have been able to purchase maps, AdWords advertising and other services directly from Google for over a year.

Among their many other interests, the powers-that-be at Google now seem to be focused on buying and selling. According to a report in Thursday's edition of The Financial Times, Google also plans to launch a service through Google Base that would enable European retailers to sell their products online.

And a Silicon Valley Watcher article claims that Google and Yahoo are in talks with Wyse Technology to build bargain-priced PCs.

Beal said that while Yahoo and Google are in direct competition, both companies are pursuing different paths to profit.

"Yahoo is defining itself as a portal with content as a means to build community that people will engage in. Google's approach is to provide products and tools that are useful and try to touch on as many aspects of that experience as possible," said Beal.

"Google's plan seems to be 'let's throw a lot of stuff against the wall and see what sticks.' And Google has resources and talent to do that, whatever ones that work they'll keep and what doesn't work they won't keep."