Google Losing Money With Checkout

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Google Losing Money With Checkout?

By: Steven Bradley
2006-12-22

The short answer is yes. However losing money is part of the plan to market Checkout for the next year. Google has extended free processing...

...for merchants till the end of 2007 in an effort to get more merchants to sign up. Even better might be the $10 off all any purchase Google will be giving to customers who pay with Checkout.

Seems Google is getting more aggressive in promoting Checkout as a competitor to the eBay owned PayPal. As I posted back in June it started with the $10 worth of free transactions for every $1 in AdWords spend. Then in early November all transactions were free to merchants until the end of this year. And now those free transactions will be extended an additional year.

There is also the added benefit of the little shopping cart icon next to the AdWords ad of any Merchant using Checkout. The cart icons will likely improve clickthrough on the ad, which will have the eventual benefit of reducing the average cost per click for the advertiser as their CTR goes up.

Not all is perfect in Checkout land. They do put up barriers to merchants getting a customer's email address for future marketing and sales. Good for the customer perhaps, but not so good for the merchants. According to the New York Times article, Google Steps More Boldly Into PayPal's Territory, which is responsible for much of the information of this post, J & R Richard recently had to suspend use of Checkout due to processing delays. StarbucksStore.com has also reported 'operational issues' with the system.

Still all the free goodies Google is putting out there for both merchants and consumers will likely get more of each to adopt Checkout as an online payment method.

Of course given the way Google keeps upping the ante, maybe we should all hold off a little while longer. Google certainly has the reserves in the bank to offer more. Maybe if we all wait a few more months they'll start paying us a transaction fee to become a merchant and offering to pay for consumers purchases outright. Ok, neither is going to happen, but I wouldn't be surprised to see additional freebies tossed in as Google gets more aggressive in promoting Checkout

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About the Author:
Steven Bradley is a web designer and search engine optimization specialist. Known to many in the webmaster/seo community by the username vangogh, he is the author of TheVanBlog, which focuses on how to build and optimize websites and market them online.


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