It’s a little frustrating to have to talk about a service that isn’t even really out yet. But thanks to statements from an analyst at RBC Capital Markets, everybody is talking about a long-awaited service from Google that could have eBay quaking in its bargain-basement boots. The interesting point is that Google is probably not doing it to directly compete with eBay or PayPal.
It’s supposed to be a new online payment service, named GBuy. According to analyst Jordan Rohan, it’s supposed to go live on June 28. Before I get into the information that’s been circulating about the service, though, let me take a somewhat historical look at Google’s association with this kind of service.
Analysts have been expecting Google to put together an online payment business rivaling the likes of PayPal for quite some time now. About a year ago, those rumors solidified into something that made it into the Wall Street Journal. Google CEO Eric Schmidt was compelled, a few days later, to state that yes, the company is working on an online payment system, but no, it’s not going to compete with PayPal because it wouldn’t be a “person-to-person stored-value payments system.”
PayPal CEO Jeff Jordan didn’t buy that, and told the Wall Street Journal that he believed the service would be a “very legitimate competitive threat.” So what shows up after all this speculation? Google adds a payment option to Google Base, and presumably lots of people wonder what PayPal was worried about. On the other hand, this was followed sometime later by the brief appearance of a “Google Payments” page on the company website, and people continued to wonder about “Google Wallet.” Was it just going to be a secure, single login intended to work similarly to Microsoft’s Passport service, or was there something more going on?
That’s the backdrop against which this latest rumor has surfaced. I have to call it a rumor at this point, because Google is refusing to confirm anything. Of course, that’s no surprise to Google watchers, who know the company never says anything about a new service before its launch. We’ll know shortly whether this latest rumor has any merit; in the meantime, it’s interesting to consider what the service might look like, and why Google might be making this latest move. The answers might surprise you.
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