Google Checks Out PayPal’s Market Lead

November 28, 2006

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Google’s young online payment service, Checkout, is one of the few Google products to live up to the hype in some time. As of Cyber Monday 2006, Checkout halved PayPal’s market share lead.

Unlike so many other Google products, which were brought forth and generally orphaned on the Web somewhere, Checkout has been aggressively promoted by the Mountain View, Calif.-based company. Already, that is paying off.

Hitwise’s LeeAnn Prescott reports that the market share of visits to Checkout was up 158% in the days after Thanksgiving. But more impressive, PayPal suddenly isn’t so far ahead.

Writes Prescott:

“While it still has a long way to go to catch Paypal in terms of visits, Paypal’s lead was cut in half in just one week: last week I reported that Paypal’s market share was 96X Google Checkout for the week ending 11/18/06 – this week Paypal was 38X Google Checkout in terms of market share.”
The bulk of those visits came from ToysRus, offering $10 off $30 purchases if customers used Checkout. Google has similar arrangements with Linens-N-Things, Buy.com, Petco, Dick’s Sporting Goods, and Ace Hardware.

But that’s not all. Checkout is free to use until December 31st, signifying that Google isn’t fooling around with getting this particular brand out there and accepted by the online shopping public.

You’ll notice that eBay is not on the partners list. Even when Google Checkout was just a rumor floating around the blogosphere, referred to as Google Wallet or Google Purchase, eBay posted notice about payment services without longstanding customer histories.

So, in effect, there’ll be no Checkout at eBay where PayPal has always worked just fine. And judging from the rapid public acceptance, that was a smart, protective move.

But it hasn’t been all birthday cakes and butterflies for Checkout. One of the search industry’s most prominent Google authorities, John Battelle, posted a scathing review of the product on his blog.

The biggest issue addressed was privacy. Google’s usual give-cool-stuff-in-exchange-for-user-information policy is not only opt-out, but is also obfuscated by three different privacy policies.

Coping with that knowledge, Battelle used a test credit card to make a purchase. Checkout took his credit card information, but didn’t make the sale.

Writes Battelle:

So I’m starting over. No, wait, this has been way too much of a trial. I’ll get back to it later. Or, I’ll just go to Amazon.

Sorry Google, but mark this one in your metadata as “abandoned cart.”

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