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Whilst searching for an SVGA cable supplier today, I saw my first live ‘Google Checkout’ button below a Google Adwords advertiser message. This new service, launched in the UK in April, is Google’s attempt to rival Paypal as a common secure payment processing facility. Google Checkout is being given away free to web merchants until 2007, and then from January 1st 2008, for every £1 spent on AdWords, the merchant can process £10 in sales for free through Google Checkout. Google claim that the service improves conversions and generates more leads too. Even for merchants who are not regular Adwords spenders, it’s very tempting to switch e-commerce suppliers immediately; commission charges are by no means small for high volume sellers using Paypal or Worldpay etc. But why would Google be interested in taking on this new service offering?

In March of this year Google began trialing a CPA advertising model in the US, instead of publishers paying per click for visitors (PPC), they pay a share of their sales income to the search giants. Google knows what has converted because of the RoI tracking code it offers Adwords advertisers free of charge, when a transaction is completed a small piece of code confirms that an order went through. However, whilst there are more advanced RoI tools enabling dynamic sales value inputting (Keywordmax), Google doesn’t really know for sure what the value of a transaction is - there’s a lot of trust involved. Furthermore client side RoI code isn’t 100% reliable; browser settings can be very different, Javascript and Cookies can be disabled etc. Wouldn’t it be lovely if Google actually knew how much money had been charged because they owned the e-commerce platform? Oh… now they do - Google Checkout!

You can call me pessimistic if you like, I raised the same suspicions when Google bought Urchin stats and made that into a free Google Analytics service. I can foresee Google wanting to own the whole Internet - with these free tools they go from just supplying traffic to monitoring traffic and clickstream behaviour (analytics) to seeing which keywords and referrers convert (checkout). For Google the long term step has to be taking a cut of every single transaction taking place on the web. Clearly we’re a long way from that right now, but I’m sure it’s in somebody’s business plan with all these free ‘helpful’ tools being handed out.

Technorati Tags: google adwords, google analytics, google checkout, cpa models, e-commerce, paypal, keywordmax, roi, ppc, pay per click

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