EBay`s PayPal Holds Off Google`s Checkout
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When Google rolled out “Checkout” in 2006, their own online payment system, it was touted as a PayPal killer before it was even released. Checkout is a follow up to Google Base, their (free) product listing package. But as time has gone on, both Google Base and Google’s Checkout have not made the waves expected by publicists, media, analysts, and maybe even Google itself.
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When Checkout was rolled out, the amount of animosity it generated between eBay and Google was the stuff of corporate battles, with eBay immediately making it clear to its users that anybody who listed Checkout as a payment system would be de-listed, citing "security reasons." eBay explained through spokespeople that the payment system had not yet been verified.
Google however claimed that Checkout was not released to compete against PayPal, but to satisfy the teeming hordes who browsed for products using the Google search engine, and other search products provided by Google, such as Froogle and Base. Checkout was also supposed to be for their advertisers who wanted to provide a one stop payment system for buyers. Despite their denials, various websites immediately started taking payments via Checkout alongside PayPal; Google Base and Froogle did not become the default choice for shoppers online.
Considering that shopping is one of the top three activities online after mail and search, the consequences are dire for eBay if they lose their position as the premiere product listing and auction service web site online. Does Checkout present decent competition for Meg Whitman's PayPal? If it doesn't now, will it in the future? Will Base and Froogle ever truly catch on? From the indications of this last holiday shopping season, the answers are a series of nos; but then again, perhaps there is something the indicators are not showing.
Rush Hour
The holiday spending season is the "rush hour" of shopping. Including online shopping, from Black Friday through New Year's Day, a flurry of gift buying and spending goes on worldwide ( and especially in the US) that could put a department store in the black from just three months of sales. Spending on EBay rose 29 percent in the last quarter of 2006 (rush hour); sales were $1.79 billion. Analysts and investors alike were happy about the situation and Meg Whitman was quoted as saying that Google's foray onto electronic payment processing was good for business since it raised awareness about PayPal.
This was all well and good, but Google remained silent on the whole matter. Lest we think it is either corporate laissez faire or Google giving eBay the "silent" treatment, let's look at the indicators that have eBay claiming to have triumphed over Google's Checkout, and then we will see why really, the whole eBay versus Google situation was just a big misrepresentation -- because Google was actually being honest. Checkout is not PayPal's competitor.
Next: Specialist eBay Stays on Top >>
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