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No Answer to Google Checkout from PayPal

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The NYT takes a look at Google efforts to take market share away from eBay’s PayPal. The two are in a battle for the right to process credit card payments of companies looking for an alternative to merchant accounts.

What’s interesting is that PayPal doesn’t appear to be concerned with Google’s onslaught. Despite Google offering free payment processing until the end of 2007 and consumer incentives such as $20 off a $50 purchase, PayPal isn’t responding. Why? Well for one thing, it doesn’t need to

Checkout’s gains have not necessarily heralded a PayPal decline. A Goldman Sachs report this week said that based on conversations with various merchants, Checkout appeared to be making gains against traditional payment options and that PayPal’s share of online transactions was also growing.

At first glance, it appears Google’s incentives are part of a plan to simply offer a competitive product to PayPal’s, but Google could also be working to ensure Google Checkout becomes a pay-per-action alternative.

Checkout gives Google detailed knowledge of its users’ buying habits, which the company could use to customize the delivery of ads or search results to specific usersthe system could make it easier for Google to develop a new advertising model in which advertisers pay only when a user completes a transaction, rather than every time a user clicks on an ad.

Pay-per-action is something that we’ve been expecting from Google for years. It will be interesting to see if it becomes a reality.

Mr. Ling said Google had no plans to tie search results to buying habits or to use Checkout to move to a cost-per-action ad model. But he added: “If there is a service that is of value to consumers, we will consider it.”

That’s definite “yes” then.

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Andy Beal is an internet marketing consultant and considered one of the world’s most respected and interactive search engine marketing experts. Andy has worked with many Fortune 1000 companies such as Motorola, CitiFinancial, Lowes, Alaska Air, DeWALT, NBC and Experian.

You can read his internet marketing blog at Marketing Pilgrim and reach him at andy.beal@gmail.com.

No Answer to Google Checkout from PayPal
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