Web Payments Smackdown: Google vs. eBay June 28, 2006
Posted by Jerry Bowles in Companies, Google, Web 2.0.trackback
Google is expected to launch an online electronic payment service called GBuy today that will directly challenge eBay’s PayPal for internet shoppers’ transaction fees and could touch off an internet turf war that will make Tony Soprano’s latest brush with the New York gang look like a kids birthday party.
Unlike so much of the stuff that Google releases in a kind of semi-permanent state of “beta,” there is no doubt how the company plans to turn this one into cash. GBuy will work in conjunction with AdWords, so that consumers who visit a merchant’s site through a sponsored link will have the option of going to a separate, GBuy checkout site. The goal, company executives say, is to “automate the advertiser click cycle,” which means that instead of simply handing you off to a merchant when you click through to an AdWord link, a virtual rep from Google will tag along and offer to charge your purchase if you decide to buy. That will speed up transactions which translates into more money for merchants and, of course, for Google.
According to widely leaked (some might even say, widely hyped) details, Google plans to charge merchants a 2.2 percent commission, as well as a fee of 30 cents per transaction. AdSense advertisers will get a discount.
What turns this into a potential killer app for Google is its apparent link to its newly announced Content Referral Network, an eBay style sales lead generation and transactional commission-based affiliate network that is bound to poach eBay (and Amazon and other online merchants’) customers. Of course, the nice people at eBay must have seen this coming because they just announced the test launch of AdContext, an automated, keyword-based contextual ad system for use by its affiliate network which looks suspiciously like it was designed to claim a chunk of Google’s territory.
Meanwhile, the two companies have to be pretend to be nice to each other. eBay is one of Google’s largest AdWords customers and, as such, Google delivers a lot of traffic to eBay, and gets a lot of money from eBay in return. This is going to fun to watch.
[...] ~ ~ ~ ~ ~ Checkout will work in conjunction with AdWords, so that consumers who visit a merchant’s site through a sponsored link will have the option of going to a separate, checkout site. The goal, company executives say, is to “automate the advertiser click cycle,” which means that instead of simply handing you off to a merchant when you click through to an AdWord link, a virtual rep from Google will tag along and offer to charge your purchase if you decide to buy. That will speed up transactions which translates into more money for merchants and, of course, for Google. (source: EnterpriseWeb2.0) [...]
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The war between these two payment systems will be long and exciting. First, the google Checkout has additional features that sellers like to use. On the other hand, ebay Paypal is well-established and doing well in the business. Second, people opinion are divided.