July 7, 2006

Google Checkout Could Increase Costs For The Shopping Comparison Engines

Google Checkout adoption will translate to higher costs for the shopping comparison engines. Some of the costs will be passed onto merchants, and I’m not sure they’ll stand for it.

The shopping comparison engines are some of the biggest purchasers of pay per click (PPC) listings on Google Adwords and Yahoo! Search Marketing (YSM). Companies like Shopping.com, Shopzilla, and NexTag are also some of the savviest search marketers in the biz, looking at revenue derived from each and every click. Whether you call it arbitrage or not, many of the shopping comparison engines purchase keywords to drive traffic to their sites and then monetize that traffic through their own PPC listings, ideally at a higher rate than what they paid Google or Yahoo!.

As PPC rates on the general search engines have risen over the last couple years, the shopping comparison engines have had to raise their own PPC rates to cover their increased costs. A number of people I trust say that this is faulty logic, but I would say that the rise in PPC costs on the general search engines is definitely one factor in the rise in PPC rates on the shopping comparison engines.

Google Adwords ranks PPC ads “based on their maximum cost-per-click (CPC) and Quality Score on Google.com. (For the top positions above Google search results, we use the actual CPC.) The Quality Score is determined by the keyword’s performance history on Google: its clickthrough rate (CTR), relevance of ad text, historical keyword performance, landing page quality, and other relevancy factors.” (Full Explanation).

Now here comes Google Checkout. If you’re an AdWords advertiser, you can hook up your Adwords and Checkout accounts and display a Google Checkout shopping cart icon in your Adwords ads. If Google Checkout takes off, consumers will start to look for ads that have the Checkout icon, thus driving up the CTR of these ads. Because CTR is one determinant of ranking on Adwords, the merchants who list the icon should move up in ranking.

The comparison engines will not be able to show the Google Checkout shopping cart icon in their listings (unless some special deal is struck). This means that to effectively compete with the merchants who are displaying the icon, the shopping comparison engines will have to increase their maximum CPC bid, driving up costs.

If the shopping comparison engines are paying more on Google Adwords, they are going to have to raise the minimum price floors they charge merchants. Merchants are already pissed at the perceived high costs on the shopping comparison engines (I say perceived because I don’t think that all advertisers are properly tracking costs or optimizing listings and therefore could actually afford to bid a lot higher) so rate increases are always met with disdain.

Most of the large shopping comparison engines will increase their pricing in preparation for the holiday season. This is a normal phenomenon because conversion rate goes up during the holiday shopping season, but I think the engines also raise their rates to cover their own click costs. Now add the Google Checkout factor and shopping comparison engines might have to raise their rates even more.

To see a sample of what the Google Checkout shopping cart icon looks like in an AdWords ad, see my full Google Checkout post.

Posted by Brian Smith at 11:32 AM | Permalink

June 27, 2006

Google's PayPal-Rival GBuy Looks Set To Launch This Week

We've had rumors that Google would launch its own PayPal-like payment system this week. Widely reported as GBuy, the Wall Street Journal has a few further details of what looks to be coming any day now.

Google Gets Ready to Test GBuy, A New Online-Payment Option (paid sub. required) covers how GBuy might give rebates back to those making purchases; how GBuy's 2.2 commission on sales would be higher than PayPal's 1.9 percent rate, but also how AdWords advertisers might get commission eliminated or be given a discount. Those advertisers also might get special icons next to their ads, to show they accept GBuy payments.

Google GBuy Launch Later This Month To Challenge PayPal? from us last week provides a timeline of how we've gotten to the existing and live Google Payments system on Google Base to the expected launch of this new system for transactions that happen outside Google's own properties.

Earlier this month, Eric Schmidt reiterated that the new system he said would be coming from Google was "not like PayPal at all." We'll see, but it sure feels that way.

Meanwhile, Valleywag notes that Google is hosting a free talk on micropayments this Thursday. It features two micropayment companies but also sees like nice timing for Google to talk about its own less-than-micro payment system

Posted by Danny Sullivan at 7:20 AM | Permalink

June 12, 2006

Google GBuy Launch Later This Month To Challenge PayPal?

Google's GBuy Could Be 'Revolutionary' from Forbes covers news from RBC analyst Jordan Rohan that Google's existing payment system -- Google Payments -- may be expanded for any merchant to use outside of Google Base.

SEW's chief news correspondent Barry Schwartz has already documented how Google Payments works at Google Base, and he provides a round-up here. But Google Base isn't really a consumer-facing site. Sure, consumers go there -- but only if they are super-savvy or in the few instances where Google highlights Google Base listings in regular web search results.

As a result, Google Payments is hardly a PayPal-killer. Merchants who want to sell but can't take credit cards can't use Google Payments outside of Google Base, to my knowledge.

The RBC report suggest that will change as of June 28, that any merchant could use what it calls "GBuy" as a payment system outside of Google Base. Moreover:

On its core search results pages, Google will designate each merchant accepting GBuy as a "trusted GBuy merchant." If consumers view this as a mark of safety and security, Rohan believes this should increase click-through rate.

Bloomberg asked me about the system on Friday, and my response was this:

I think it's unlikely that Google would give merchants any type of mark in its regular or "core" search results. I think they'd be fearful searchers might interpret that as some type of paid inclusion or preferential system. Bid rank also isn't used for core search results. AdRank, however, is used for determining how paid listings appear. They might factor this into those paid listings. I also think they might do this in places where it would be more acceptable, such as in Google Base listings or the far-more consumer-facing Froogle site.

RBC's research note is big on the idea that by getting people into GBuy, Google will know what sites are handling transactions and thus be able to charge more for ads. Sure - but as I said, I think the idea that flags or icons will appear in regular results is unlikely.

RBC's note also pitches the idea that Google is building a one ID, one password system that might rival Microsoft's Passport system:

In other words, a user signed up with Google for GMail, Google Base, and now GBuy will be able engage in all kinds of activity on the web (including shop and pay) without having to log in to different services from different vendors; in concept, GBuy may be one piece of a larger "passport"-like system currently in place at MSN/ Hotmail.

If the idea is to challenge the horrible Passport system, then Google's on the right path. Currently, it Google can't even make the existing Google Accounts system it offers work right for its own services.

Havoc With Google Accounts from me last December covers some issues about this. I still see some of those problems continuing. Here's another person this month reporting the same.

And what's up with the GBuy name? Isn't it Google Payments? And where did Google Wallet go? And didn't Google swear it wouldn't compete with eBay-owned PayPal? OK:

  • Google Wallet: In June 2005, we started hearing about Google planning to handle online transactions through something code-named "Google Wallet."  
  • We're Not After PayPay: So said Google CEO Eric Schmidt in late June 2005, after Google Wallet rumors heated up.  
  • We Don't Believe You: So said the head of PayPal in December.  
  • GBuy Will Have Icons & Everything: So said the Wall Street Journal, giving us the GBuy name. Unlike the RBC report, it said that GBuy icons would only be alongside paid ads.  
  • Google Payments: Opened in February, "Google Payments" is the name widely given to the program (sign-up request here) that lets you take payments through Google Base.  
  • Google Checkout: Last month, more rumors about the system perhaps being called Google Checkout, based on domains registered.

Posted by Danny Sullivan at 10:08 AM | Permalink

May 30, 2006

Latest Google Payments Rumor: Google Checkout

Rumors have been flying since yesterday about Google's plan for a payment system and recent developments. Although unsubstantiated at this time, the talk is not new. Google itself has made some overtures about a pending payment system, and we can expect one to arrive sometime in the near future.

Posted by Detlev Johnson at 8:08 AM | Permalink

March 15, 2006

No Credit Card Merchant Account? No Problem! How I Can Now Get Paid With Google Payments

Google is now allowing select Google Base users to use Google Payments as a substitute to a merchant account. The best way to describe Google Payments is calling it a PayPal alternative. I have been accepted to allow accept funds at Google Base with Google Payments. The set up was fairly easy, even thought I am not 100% done with the final verification of my bank account. I have wrote two articles on the process, the first is named Accepted by Google Base to Sell Through Google Payments, which describes how I set up my Google Base account to allow Google Payments payment option. The second article is named Buying and Accepting Payments at Google Base, which shows the process of a customer buying an item at Google base with Google Payments and then the back-end Google Base Dashboard processing of the Google Payment.

A couple of weeks ago we did post on A Look at Google Payments in Action that had a link to the TechCrunch screen captures. But this time, I personally was able to access it and I took my own screen captures.

Posted by Barry Schwartz at 10:38 AM | Permalink

February 27, 2006

A Look at Google Payments in Action

TechCrunch has exclusive look at Google payments. One thing to note is that you do not need a Google Account to use Google Payments. More on this next week, after SES.

Posted by Barry Schwartz at 5:47 PM | Permalink

February 24, 2006

Google Base Soon To Allow Buying & Selling Through Google's Own Payment System

Google Base is soon to allow merchants to sell through Google's own payment system, as well as allowing buyers to use the Google Accounts system to make purchases. A quick look doesn't show any of this live yet, but I'm sure examples will come soon. There is more information from Google here plus a note on how this fits into their overall payment system plans here. Want to sell on Google Base through its own system? Use this form to sign-up.

Posted by Barry Schwartz at 3:13 PM | Permalink

February 6, 2006

PayPal Chief Doesn't Believes Google's Statements About Online Payment System

Mylene Mangalindan's article in the Wall Street Journal (free to all): PayPal Prepares For a Challenge From Google takes a look at how online payment service, PayPal is preparing it's forces and resources against Google's plans to make a play in the online payment space (formerly Google Wallet) or what is now being referred to as GBuy.

Jeff Jordan, President of eBay's PayPal division, told the WSJ that what Google is up to is a "very legitimate" threat to his company and goes on to say:

...he and his team immediately "dissected the wording" of Google's statements. He says he doesn't believe Mr. Schmidt. In the past, Mr. Jordan says, Mr. Schmidt had denied Google would roll out a payments service, only to take it back later. "We took [the comments Mr. Schmidt made] as 'Thou doth protest too much,' " says Mr. Jordan.

Specifically, on what Google is developing:

For the last nine months, Google has recruited online retailers to test GBuy, according to one person briefed on the service. GBuy will feature an icon posted alongside the paid-search ads of merchants, which Google hopes will tempt consumers to click on the ads, says this person. GBuy will also let consumers store their credit-card information on Google.

We also know that Google is already handling the payments for videos sold through the Google Video Store and extended services for Google Earth.

Last March, Google formed the Google Payment Corporation. More in this post.

See Also: Google Does Plan Payment System, But Not PayPal-Like One

Posted by Gary Price at 4:12 PM | Permalink

October 11, 2005

Are You Ready for a New Googleplex? This Time Google Heads to Arizona

This evening, The Business Journal of Phoenix is reporting that Google will annnounce on Wednesday that they plan "major new operations in the Phoenix area."

Sources tell The Business Journal that search engine titan Google is the company in question and that Valley plans will likely include operations related to online auctions and expanded Internet and technology services... It is unclear, however, where Google will be landing its Valley tech operations. Some sources indicate that it will likely be Tempe but others say the company may also be looking at locations in other cities, including Scottsdale.

A specific number of jobs that Google will bring to Arizona will not be announced tomorrow but according to newspaper sources it will be "substantial." Update: A Google news release today said they plan to hire "hundreds of people."

Ok, now let the Google Auction speculation roll into high gear. Might the Phoenix area also be the home of Google's payment services?

The Arizona office is only the latest in a string. The other day I blogged about Google recruiting for some sort of office/GooglePlex in Michigan and of course, we're well aware of the project that incldues more space NASA.

Want to comment or discuss? Visit our forum thread, A New Googleplex: This Time in Arizona.

Postscript: Google has just posted a few job openings for their office in Arizona • Software Engineering (2 types of openings) • Financial Applications Engineering (2 types of openings) • Helpdesk (1 type of opening) • IT (1 type of opening) • Security (4 types of openings) • Systems Administration (1 type of opening) • Internal Systems Production Engineer - Phoenix

Postscript 2: A bit more from the official Google news release: The new Google office will be primarily focused on engineering, operations and IT support functions and is part of our worldwide effort to build engineering centers in locations where there are great engineers. We plan to hire hundreds of people for the new office in the coming years and have set up temporary offices in Phoenix to begin building out our local team. We are currently considering a variety of options for more permanent facilities, including occupying existing office space or perhaps building our own offices.

Posted by Gary Price at 8:47 PM | Permalink

Is Google Wallet or Some Other Google Payment System Getting Closer?

Since so much of the blogosphere revolves around speculation I thought I would join in. Is Google Wallet or whatever they call their payment systems getting closer to reality? I have no idea but some recent changes on a Google page makes me think that something MIGHT, I repeat, MIGHT be up. Of course, it could also be NOTHING, just some simple changes at the Googleplex.

In the past week, Google has made a few chages/additions/adjustments to their Robots.txt file disallowing specific directories (content they don't want others to crawl) from being crawled.

Let's Review

  • Last week Google disallowed the crawling of a directory named /purchases.
  • In the past day, Google disallowed the crawling of the /gwt/ directory. GWT sounds sort of like Google Wallet.

So, what does this all mean?

  • Google is getting closer to launch Google Wallet or some other payment service?
  • They are in the early stages of testing something in the payment arena?
  • Some another new service coming?

Who knows? I don't. But like I said earlier, given that this is the blogosphere, I thought it might be interesting to toss it out and see what comes back.

Btw, just last week Google placed a disallow on the Robots.txt /reader directory file launching Google Reader.

Finally, I've requested a comment from Google. If they have one, I'll make sure to add it to this post.

Postscript: The always timely Dirson points out that heading to the url: http://purchases.google.com redirects to: https://www.google.com/accounts/ServiceLogin?service=sierra. Dirson calls "Sierra" the "service name." I also noted that purchase.google.com redirects to the Google home page.

Postscript 2: Google Rumors took our post and did some more digging and has a bit more.

Postscript 3: Remember, I said all of this was speculation. I knew when I posted the item I would hear from a bunch of you. I was right. One reader shares that the "/gwt/" directory has existed for some time and involves Google's mobile services. Any page that's reformatted for a mobile device eminates from the /gwt/directory. What must have happened today is that Google added /gwt/ to its do not crawl list. Oh well, there goes that idea. Thanks to B.O.B for the tip.

Postscript 4: News.com has info from Google saying the Google Purchases screenshot just reflects a new interface for purchases of Google Earth.

Want to discuss? Visit our forum thread, Google Wallet Coming Soon?.

Posted by Gary Price at 5:12 PM | Permalink

October 4, 2005

Google Seeks Sales Team For Payment Solution -- Also, Google Job Openings in the OC

We know that Google has plans in the online payment business (Google Wallet?, something else?). Today, I noticed that Google is now advertising positions for people to sell their "payment solution". It's an inside sales job based in New York City.

Inside Sales Representative, Google Payment Solutions - New York Google is looking for upbeat, focused and well-organized individuals to join our Inside Sales team for Payment Solutions. You will be part of a group of specialists dedicated to expanding and supporting Google's merchant solutions.

Also, if you love Orange County, California (just ask Danny if you need a few reasons why you should) I noticed that Google has posted several positions to work in their Irvine, CA sales office. Positions include:

Posted by Gary Price at 12:01 PM | Permalink

September 6, 2005

Google Wallet Payment System Seeking Fraud Operations Director?

Gary spotted a job opening (and here) for a "Fraud Operations Director, Merchant Payment Solutions" position at Google. Google already has people that look into click fraud issues with ads, so this seems like something different. We know that Google's working on some type of payment system that's apparently been dubbed Google Wallet. Perhaps this job is related to that? And is the system a rival to PayPal? No, said Google earlier this year.

Posted by Danny Sullivan at 11:11 AM | Permalink

June 22, 2005

Google Does Plan Payment System, But Not PayPal-Like One

Google CEO Eric Schmidt has confirmed that Google is working on an online payment system but cross-his-heart swears it won't be one that competes with eBay. Well, at least it won't be "a person-to-person, stored-value payments system," he told the Associated Press, in a story spotted via InsideGoogle.

So what will the system be? The attempt to set the record straight on the eBay front didn't provide any clarity. The AP wrote:

"The payment services we are working on are a natural evolution of Google's existing online products and advertising programs which today connect millions of consumers and advertisers,'' Schmidt said. He declined to elaborate.

Set the record straight? Silicon Beat says Google's got Schmidt doing the press rounds to quash the idea it might be going after eBay-owned PayPal. Given that eBay's one of Google's biggest advertisers, you can understand they don't want to tick them off too much -- at least until they're in a position to completely crush them, that is :)

Perhaps the best way to quash the rumors would be for Google to explain just what the heck it really is planning. In lieu of any real information, we're left with speculation that ranges from micropayments to a wallet for Froogle purchases. Feel free to add your own speculation. It's as good as anything out there.

Meanwhile, Whitman on Google Wallet from Silicon Beat asks eBay's CEO Meg Whitman about the rumors. eBay feels "pretty good about our competitive position" she says but doesn't mind competition if it comes since "it makes us better." All of this without commenting specifically about the Google rumor, of course.

Posted by Danny Sullivan at 6:50 AM | Permalink

June 17, 2005

Google Wallet Coming To Handle Online Payments?

According to the WSJ , Google has plans to offer online payment services.

Exact details of the search company's planned service are not known. But the knowledgeable people say it could have similarities with PayPal, which allows consumers to pay for purchases on Web sites by funding electronic-payment accounts from their credit cards or checking accounts. Some consumers like PayPal for the security it offers, since it allows them to share their banking or credit-card numbers only with PayPal without having to divulge the information to merchants. Spokespeople for Google and PayPal declined to comment.

The article also points out that some believe the code name for the service is "Google Wallet."

A New Company I did a bit of research (love that deep web (-:) after reading the article and discovered that two months ago Google filed the paperwork with the California Secretary of State and formed the Google Payment Corporation. Interesting.

Btw, here are a list of other "active" Google corporations:

  • Google Financial Services, Inc. (Filed 8/27/2002)
  • Google Inc. (Filed 9/3/2002)
  • Google Foundation (Filed 8/24/2002)

Update: The Associated Press has also published a story.

Update: In case you're wondering, a person in California registered GoogleWallet.com on Thursday, a day before the WSJ story was published.

Posted by Gary Price at 8:48 PM | Permalink