Google Launches Checkout… and other Google Musings
June 29, 2006 Leave a comment
After months of speculation, Google Checkout has finally been officially launched. The release is, as you'd expect, being covered pretty much everywhere, including the New York Times and TechCrunch. One thing that I'd say is being consistently misreported (at least by the mass media type outlets), in my opinion, is that this is a direct PayPal competitor or “PayPal killer”. While it's true that Checkout is a way to accept payments, it doesn't have the person-to-person functionality that PayPal has, nor many of the other features. It's simply a slightly different beast and is more akin to Microsoft wallet. That being said, this does target many merchants that currently do use PayPal and there is clearly a good amount of overlap. I've had my personal problems with PayPal in the past, and if nothing else this should serve to make PayPal clean up it's act. It will be interesting to see if either PayPal or Google eventually move their respective services to be considered as a banking service, which would open them up to quite a bit of regulation, but also quell the fears many people have with this kind of service. That stands especially true for PayPal, which allows you to store money and carry a balance. The one thing that worries me about the system is that, as Google adds new services to their lineup, they continue to do so under a unified Gmail username. That means that if your email username and password get compromised, you could be in a world of trouble. Considering that most people are way too lax with their email credentials and even use unencrypted protocols over shared wifi, this could be a recipe for disaster.
On to the actual service, Checkout is “a checkout process that you integrate with your website, enabling your customers to buy from you quickly and securely, using a single username and password. And once they do, you can use Checkout to charge their credit cards, process their orders, and receive payment in your bank account”. Unlike PayPal, you can't use the service to pay for goods without an account (recall that PayPal was like this for a long time also). Like most Google offerings, the API to this looks pretty nice. What's more, if you participate in Google AdWords, which generates the lions share of current Google revenue, you stand to potentially use Checkout for free. For every $1 you spend on AdWords, you can process $10 for free with Checkout. It should be noted that an AdWords account is not a requirement of using Checkout. This marks a turning point for Google I think. While Checkout is clearly very tied to AdWords and will certainly increase the amount of users that advertise with the Google network, this represents the first real alternative income stream that Google has added in a long time. This could be good and bad. Of course you don't want 100% of your revenue coming from one place, but that setup does allow you to focus your energy with laser-like precision. The more revenue streams you have, the less focused you become. I think Google struck a pretty good balance here, considering the two stream are so intertwined.
This focus issues brings up another interesting point with Google though. Google has traditionally been a very nimble company that has a corporate culture all its own. As they continue to grow and continue to add “seasoned veterans” from the likes of Microsoft and other big players, one has to wonder if they can keep their culture intact. These seasoned veterans come with a lot of history and a way of doing things that is steeped into who they are. It's hard for people to change and there is a very real chance that as the number of these type of employees grow, Google will becomes less nimble and more stodgy. There's certainly no sign of it yet and Google somehow has a way of avoiding pitfalls that it seems certain to fall into, but it has to be something that's on the minds of both the Sergei/Larry/Eric triumvirate and the lower level Google employees. It's a topic I'll certainly keep my eye on moving forward.
Google, GOOG, PayPal, Ebay, Checkout, AdWords