EBay`s PayPal Holds Off Google`s Checkout - Brand Renewal
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EBay had to increase its turnover, because the rash of competing products had started telling on the auction giant. Just before the third quarter of last year, EBay bought back two billion dollars worth of shares from investors to keep market value strong. Its brand was getting diluted by dozens of mom and pop shops which were listing overpriced goods. The core identity of EBay, which is "hard to find items for rock bottom prices," was rapidly being lost, but by the last quarter, brisk sales of Nintendo Wiis and Sony PS3s (both hard to find) as well as other products at competitive prices brought the auction giant back.
In terms of branding, PayPal has a stronger brand than Google Checkout. Nobody really knows what Checkout is (a means for buyers to buy products from online merchants without filling credit details continuously). Google has the problem it faced with Google Base; nobody knows what it is.
Anti Trust Violations?
This increase in business also increased PayPal's revenues, while Google Checkout remained banned on eBay. So while eBay was not affected by Google Base, the same cannot be said of PayPal, since Checkout cannot even be used on eBay at all (which sounds a lot like what Microsoft does). So how exactly does Google Checkout affect eBay?
It Doesn't
Google Checkout is not available on eBay, so it is clear that PayPal has no competition inside eBay. As an online payment system Checkout is only available inside the United States -- and note that Checkout seems to be in beta testing. According to Google they were "testing it in the US market and aligning it as a value add to their ad customers." Initially Google only created Checkout for AdWords customers and users of their products (such as Google Base).
Checkout Over-hyped by Media
The whole "Checkout is a PayPal killer" rumor was a product of eBay's paranoia and the media wishing it to be true. It seems the only person Google actually ever competes against is Microsoft (not Yahoo search nor Yahoo mail) and its products ranging from MSN, IE and Hotmail. Simply put, Google hardly ever focuses on competing with anybody else. Sometimes they just roll out products in order to have a "new" product in the market, and to have a product in every web application field. The media touted Checkout as a PayPal killer because it seemed that PayPal would actually have competition from a big competitor (there are other online payment systems, but none that could really touch PayPal).
Next: eBay's Justified Paranoia >>
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