Itsme
02-28-2006, 06:09 AM
New Google service could compete with PayPal
By Elise Ackerman
Mercury News
In its characteristically understated style, Google has begun offering a new payment option for a handful of people who had listed items for sale on the Google Base posting service, a step that could eventually put the Mountain View Internet giant in direct competition with eBay and PayPal.
The ``Google account'' allows merchants to easily accept payment for creative works ranging from poems to recipes, as well as e-commerce mainstays such as books or collectibles.
In its final form, analysts believe the service could become an alternative to eBay's payment service PayPal, allowing Google to compete with the San Jose company -- one of its biggest advertisers.
``I think the relationship could become more and more strained because Google really has the potential to become the toll bridge to e-commerce,'' said Dan Schatt, senior analyst at Celent, a Boston-based research firm.
But Tom Oliveri, the product marketing manager for Google Base, said Tuesday the payment service was not intended to compete with eBay or PayPal.
``These are different products,'' Oliveri said, noting that eBay is purely commercial, while Google Base, which is still in a ``beta'' testing phase, is more of a free exchange of information.
According to Google, eBay merchants will be able to post information about items they are selling on eBay on Google Base, too. A seller can ask buyers to close the transaction on Google Base, using PayPal or the Google Account -- or direct them to eBay.
``Google is a valuable partner, and we have no reason to believe they won't remain a valuable partner,'' EBay spokesman Hani Durzy said.
Google officials declined to speculate on how the service might develop in the future.
In a statement posted on the company blog, Google said it would ``continue building payment services that meet the needs of Google users and advertisers.''
According to a participant in a recent Google focus group, the company is exploring the option of displaying a small ``G'' next to paid search results to indicate that payment from a Google account would be accepted.
It was unclear whether Google would charge an additional fee for processing the payments.
By expanding the new payment service beyond Google Base, to its regular search service, Google could change its advertising model. Companies currently pay Google each time an interested person clicks on their Google ads, regardless of whether a purchase is made. In theory, analysts say, companies would be willing to pay much more if they knew how many times their ad led to a purchase, essentially turning traditional wide-ranging marketing costs into a per purchase charge.
Schatt said Google doesn't need the payment service itself to be particularly profitable, because the information about the people who use it would be valuable to advertisers.
Elsewhere, Microsoft is planning to roll out a free online classified service code-named ``Expo'' later this spring. Since November, it has been used by Microsoft employees to buy and sell everything from homes to concert tickets and computers, a Microsoft spokesman said.
http://www.mercurynews.com/mld/mercurynews/news/breaking_news/13977416.htm
By Elise Ackerman
Mercury News
In its characteristically understated style, Google has begun offering a new payment option for a handful of people who had listed items for sale on the Google Base posting service, a step that could eventually put the Mountain View Internet giant in direct competition with eBay and PayPal.
The ``Google account'' allows merchants to easily accept payment for creative works ranging from poems to recipes, as well as e-commerce mainstays such as books or collectibles.
In its final form, analysts believe the service could become an alternative to eBay's payment service PayPal, allowing Google to compete with the San Jose company -- one of its biggest advertisers.
``I think the relationship could become more and more strained because Google really has the potential to become the toll bridge to e-commerce,'' said Dan Schatt, senior analyst at Celent, a Boston-based research firm.
But Tom Oliveri, the product marketing manager for Google Base, said Tuesday the payment service was not intended to compete with eBay or PayPal.
``These are different products,'' Oliveri said, noting that eBay is purely commercial, while Google Base, which is still in a ``beta'' testing phase, is more of a free exchange of information.
According to Google, eBay merchants will be able to post information about items they are selling on eBay on Google Base, too. A seller can ask buyers to close the transaction on Google Base, using PayPal or the Google Account -- or direct them to eBay.
``Google is a valuable partner, and we have no reason to believe they won't remain a valuable partner,'' EBay spokesman Hani Durzy said.
Google officials declined to speculate on how the service might develop in the future.
In a statement posted on the company blog, Google said it would ``continue building payment services that meet the needs of Google users and advertisers.''
According to a participant in a recent Google focus group, the company is exploring the option of displaying a small ``G'' next to paid search results to indicate that payment from a Google account would be accepted.
It was unclear whether Google would charge an additional fee for processing the payments.
By expanding the new payment service beyond Google Base, to its regular search service, Google could change its advertising model. Companies currently pay Google each time an interested person clicks on their Google ads, regardless of whether a purchase is made. In theory, analysts say, companies would be willing to pay much more if they knew how many times their ad led to a purchase, essentially turning traditional wide-ranging marketing costs into a per purchase charge.
Schatt said Google doesn't need the payment service itself to be particularly profitable, because the information about the people who use it would be valuable to advertisers.
Elsewhere, Microsoft is planning to roll out a free online classified service code-named ``Expo'' later this spring. Since November, it has been used by Microsoft employees to buy and sell everything from homes to concert tickets and computers, a Microsoft spokesman said.
http://www.mercurynews.com/mld/mercurynews/news/breaking_news/13977416.htm