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Tue Oct 21 2008 23:18:34

Google Checkout, PayPal and eBay

By: Ina Steiner

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MediaPost cites a recent USB Investment report that suggests Google might partner with PayPal, claiming that Google "continues to de-emphasize Google Checkout." However, it doesn't explain or speculate on the nature of such a partnership. (Nor have I seen anything to confirm or contradict its claim that Google is de-emphasizing its Checkout service.)

What would PayPal want from Google? Badges on Google Product search results would be a coup. Merchants and shoppers would both benefit by having more choices in payment methods, and it seems in Google's nature to be open to any tool that helps its users.

What could PayPal offer Google in return? An agreement from eBay to allow Google Checkout on its marketplace. (I'm not certain whether Google Checkout could be integrated into eBay's next-gen checkout flow coming next year.) However, eBay is less open-minded than Google, and it has already said it would not allow Google Checkout on to the site for competitive reasons.

eBay is now forcing small sellers to take PayPal (ProPay and merchant accounts are only accessible to high-volume sellers). Shoppers who buy from small sellers but don't wish to pay for their items with PayPal are basically out of luck. Google Checkout could pick up some of the slack.

It's hard to envision other scenarios under which Google Checkout and PayPal could partner, and even this scenario seems unlikely. Any theories?




Comments (26) | Permalink

Readers Comments

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: Harriet

Tue Oct 21 23:30:16 2008

I have both PayPal and Google Checkout plus money orders in my eCrater store. My customers there are using Google almost exclusively, when given the choice.

There is a nice connection between eCrater and Google.

Customers find it easy to use, and actually, so do I.

It sounds like some speculation going on without too much substance

At least I hope this is the case.

Google could have the whole enchilada, if they wanted to get involved as a ''sales venue''.

eBay sellers are so worn out and discouraged.

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: John

Tue Oct 21 23:57:55 2008

I would "consider" selling again if GC was offered but only if it was NOT integrated into the payflow system, and it had absolutely nothing to do with PP.I would want to read the fine print very carefully. I do not trust PP and eBay at all.

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: Ken

Tue Oct 21 23:58:20 2008

Sorry in advance for this VERY LONG post, but I have thought about a eBay / Google joint venture / relationship for quite a while, so here are my thoughts.

As I look at it, eBay and to a lesser extent, PayPal NEED Google more than Google needs them. Case in point Google "tweaks" their search algorithms and eBay listings "disappear" from the critical first couple pages of results. Considering eBay continues to move more & more toward a natural search finding experience and AWAY from a paid / affiliate search finding experience, gives Google even more leverage.

Personally I look at it more as what can eBay/PayPal offer Google, rather than looking at it as needing to be an "even"  exchange.

Now as to what this means, I don't know & will admit I am a bit biased in my conclusion, but I would consider the following to be a good deal that I would accept IF I was on Google's side.

Obviously get Google Checkout accepted on eBay for starters, like ProPay. In exchange, PayPal could get their little logo added to Google ads & Google would be put in charge of eBay's search results & advertising. This would be a win-win for both sides and WHAT I HOPE HAPPENS. :-)

PayPal has such a commanding lead, that they probably don't view Google checkout as a real competitor, so allowing them on eBay doesn't do much harm, but does increase good will between the companies [helps the critical natural search on Google], helps prevent monopoly related lawsuits, and keeps sellers/buyers that REFUSE to use PayPal on eBay [remember eBay still gets most of their money from eBay commissions, NOT PayPal revenue].

Giving Google free rein over the eBay search results would be viewed as a coup by Google investors and may even be views positively by eBay investors, since that would CLEARLY show that management is committed to fixing the problems with eBay. Personally I don't mind the IDEA behind eBay's Best Match, but I have ZERO confidence that eBay will ever figure it out. However I would be VERY confident as a eBay buyer/seller that GOOGLE would figure it out and get it working right in a relatively short time period. Frankly in my opinion, ONLY eBay Search Powered by Google, has any chance of getting eBay buyer/sellers to EVER believe in Best Match. Google would like it because they would get a different subset of search results to get metrics about and it would be viewed as a coup by Google investors.

Getting a revenue sharing agreement whereby Google manages all of eBay's advertising [either just on eBay or preferably on all eBay owned properties] would certainly significantly improve that source of revenue [if Best Match is bad, do you really think eBay is doing any better with advertising]. Sure you wouldn't be keeping 100% of your revenue anymore, but Google would almost certainly be able to maximize income/profit enough that it would still increase even after they took their cut. Personally, Google may even be willing to do it for free/very cheap, if you also put them in charge of eBay search results [see above]. Lastly, considering Google is a cash making machine, while eBay is short on domestic cash [to expensive to use their foreign cash here], plus considering they already used 1/3 of their revolving credit line [which very well could shrink due to the worldwide credit crunch], eBay MAY even be willing to SELL their advertising to Google, like happened with Google/MySpace.

That at least is my 3 cents worth of advise!!!

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: ThePinkElephants

Wed Oct 22 00:06:18 2008

''However, eBay is less open-minded than Google, and it has already said it would not allow Google Checkout on to the site for competitive reasons.''

At first it was because eBay said it was not a tested/secure payment method.  Leave it to eBay to have an  excuse du joir .

''eBay is now forcing small sellers to take PayPal (ProPay and merchant accounts are only accessible to high-volume sellers).''

Not true, we have been using ProPay for years.  Now, the eBay/ProPay integrated payments is a different story, but do not confuse the two.  Seller's can still realize savings using ProPay.  Plus no 21-day holds, just the normal 1-3 business day processing cycle.

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: tj

Wed Oct 22 00:57:07 2008

eBay is in very deep water I can see Google/microsoft making a hostile bid for eBay just to get Paypal...eBay i feel would be shut down just as Yahoo auctions were..going to be very interesting this q4 as NOTHING is sure anymore; all the cr@p Bush is saying about things calming down is smoke & mirrors the US is in deep sH{t ...just look at the auto makers shutting down plants for up to 1-2 months ????

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: noneya

Wed Oct 22 01:16:17 2008


''eBay is now forcing small sellers to take PayPal (ProPay and merchant accounts are only accessible to high-volume sellers).''

I also have to say - Not True. I am a small volume seller, Just barely a bronze, and ANYONE can get a merchant account. However it's worth finding out if you have a online merchant account, who they use for their software, it'll most likely be propay or paypal. We haven't found out since we use the credit card system from our physical store, but, it would be worth finding out if an online Merchant account with paypal is held to the same crazy buyer focused rules that paypal/ebay has.

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: whateverebay

Wed Oct 22 01:39:44 2008

"(ProPay and merchant accounts are only accessible to high-volume sellers)" Of course it would not be that easy for sellers to use their own Merchant Account or ProPay. The strings!

Now, regarding Google. Google is a trusted name, more than Paypal. I also use eCrater and only offer Google Checkout, so far no problems. With so many alternatives, it bothers me to be dictated by eBay. eBay making these changes now, only hurst exisiting sellers.

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: Brad

Wed Oct 22 01:52:20 2008

If I was running Google I would do one of two things.
1) Steer clear of eBay and launch a Google global auction site as quickly as possible to snap up disaffected eBay users. Let the market decide for itself once there is a real global alternative to eBay.
2) Let eBay dig itself further into a hole, make a hostile takeover when the share price sinks into single figures, sack Donahoe and the other cretins driving all the customers away, rebrand eBay as GoogleBay (seriously!) and enforce ''Don't be evil'' on the rest of the staff. Be a white knight to get eBay and its investors out of the hole Donahoe and his fellow management morons have dug for themselves.

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: Mechelle

Wed Oct 22 05:04:02 2008

Google's "do no evil" philosophy will have to be ditched if Google jumps in the fray with eBay Inc... No one can be apart of the new eBay without being an evil crooked bastard!

I hope this is just someone's idea of a nasty sick joke, because I just starting using Google products over the past year and I really like them.  If Google joins the evil force of eBay I'll never use any Google product again.  eBay is suffocatingly present as it is.  Pretty soon we'll be mailing our mortgage payments to eBay Inc. - sorry making our mortgage payments with PayPal and paying 12% to eBay for the privilege.

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

This user has validated their user name. by: Bob

Wed Oct 22 07:35:59 2008

Huh?  Ina, come on now.  A blog post about a vague blog post about a research note?

First of all, Google Checkout just had a promotion last month.

Secondly, if any Paypal / Checkout partnership involves anything beyond eBay, we would immediately pull Checkout off of all our ecommerce sites and immediately require our half dozen clients find another processor for their stores on our servers as well.....and I'm guessing I'm not alone in not wanting Paypal to have anything to do with Checkout out in the ecommerce world beyond eBay.

Currently there are two reasons to have Google Checkout on an independent ecommerce site.  #1 - the Google name and the fact that it is any name other than Paypal. ...and... #2 - the freedom from responsibility of small business owners having to store credit card info on their own servers.

Right now eBay is a row boat that is taking on water and Google is a destroyer.  A large portion of Paypal revenue comes from eBay sales, a segment of eBay Inc.'s business that is slowing and showing negative growth.  If you do searches on Google for "Paypal" (-eBay) and "Google Checkout" the number of results are similar (within 10 million).  Do the same search in Google Shopping and the number of products varies by less than 100,000.

Google seems to be pretty tight lipped about the number of stores offering Checkout and the revenue associated with it.  It has not even been a year since Google started charging for Checkout.  Google in no way needs eBay, none.  eBay on the other hand gets 50%+ of their non-direct traffic from Google.  eBay is a big big spender on Adwords, but much of that revenue would be instantly replaced if eBay were to stop their ad campaign on Google.  With upwards of 20 million different paid search terms, eBay is a big revenue stream for Google, but many of their ads and bids are set at levels that prevent smaller company's ads from showing.  If eBay ads disappeared a good portion of the revenue stream would instantly be replaced with smaller companies who currently have bids placed on search terms that do not show due to eBay's high bids.

As far as the prospect of Google Auctions goes....  If you think it's a good idea, stop and think if it would be a good idea for Google.  There are reasons why eBay is slowly backing away from online auctions namely fraud, the liability problems and related lawsuits, the enormous required (and understaffed at eBay) customer support structure....and the costs associated with all those examples.

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: Lester

Wed Oct 22 07:53:13 2008

Regardless of what eBay, Paypal, or Google does, I AM ALREADY LOOSING BUYERS! Here is a copy of an email I received last night from someone that had already bid on an item, then sent me this message after he realized the payment terms:

''OOPS! I was bidding on several xxxxxx and noticed, after bidding on the above-referenced, that your auctions are (now) PayPal only. You can remove my bid if you so desire. [I was the victim of credit fraud five years ago and will never use same again.] BTW, ... eBay will be losing many bidders & sellers due to the PayPal ONLY restriction.''

I told the bidder I WOULD accept paper payment, and he was relieved. But how many OTHER prospective buyers ARE NOT EVEN BIDDING, SHOPPING, OR LOOKING anymore because of this asinine policy change?

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: dimes

Wed Oct 22 10:15:53 2008

I use google checkout to buy online from small sellers who don't have merchant accounts.

Sellers who accept only paypal can't get my business, because I cancelled my paypal account long ago.  

If you look at the numbers on eBay's quarterly report the company claims 83 million 'active' users, and only 52 million 'active' paypal accounts.  It's likely that the majority of those accounts are sellers', because of eBay's requirements.  

Buyers don't necessarily want to use paypal, we just want an easy and safe way to use our credit cards online

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: John

Wed Oct 22 10:28:33 2008

Paypal can be considered in many ways a monopoly for online payments and Google Checkout is the new kid on the block.As  It's only a matter of time before Paypal dominance is broken -- either by competitors or the courts. When that day comes we will all be better off.

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: uh oh

Wed Oct 22 10:44:45 2008

Anyone partnering with ebay cannot be a good thing. What on earth is google thinking? Please noooooooo!

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: CASHBACK

Wed Oct 22 12:24:47 2008

Thanks for your interesting SPECULATION, Ina. Personally, I'm hoping it doesn't come to fruition. I believe most of us around here want Google to CREATE a viable eBay alternative, not for Google to partner with eBay. In fact, the former sellers are BEGGING GOOGLE to create a powerful marketplace. Yahoo failed, so perhaps they should buy eCrater, Ubid or heck, even ETSY or Ruby Lane. Amazon is fine as is, and in my book is still the best eBay alternative.

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: Noneya

Wed Oct 22 13:29:17 2008


We take Google Checkout as well as cards by telephone for our website. We have definitely seen our Canadian sales from Ebay drop off since Canadian buyers and sellers have hated Paypal for a loooong time.
They best thing sellers can do for themselves is put together a website of their items (ecrater is free and very easy in an ebay sort of way) then print out some business cards via instyprints.com and send those cards along with every ebay purchase, your customers will be checking your ecrater site regularly fairly soon.

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: tula

Wed Oct 22 13:36:06 2008

@Ken:
I like the arguments you make. I think eBay outsourcing search to Google and allowing Google checkout on the site would be a win-win for both companies. Sure, it's taking a risk for anyone to get in bed with eBay, but Google doesn't really have much to lose in that scenario. They would gain access to eBay transactions and customer metrics, and eBay would gain from having functional search (finally!) and the flexibility of offering another payment option. There would be some goodwill there, too, since offering Google checkout would soothe some savage sellers :-)

Personally, I agree with Ken.  I'd like to see this scenario happen. It might be a key to making eBay a usable venue again. Whether the arrogant leadership at eBay will admit they aren't search experts, though, remains to be seen.  They seem to be keen on doing everything themselves, even when they can't do it very well (EPN anyone?)

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: Darth Buyer

Wed Oct 22 13:48:44 2008

Search your feelings Google, search your feelings.

Don't succumb to the Dark Side, Google. Avoid the seduction of the Evil Empire.

Darth Buyer (all alone, unfound on The eBay Death Store)

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: c

Wed Oct 22 15:28:40 2008

Cashback said: Yahoo failed, so perhaps they should buy eCrater, Ubid or heck, even ETSY or Ruby Lane.

Please don't even think eCrater when you say that.  I love the moon just as it is and want it to stay as is.

I left ebay over 2 years ago when I saw the writing on the wall and I'm extremely happy that I did.  It wasn't easy but it does get better and better.

More people are using Google Checkout at my store and I've had quite a few say they won't ever use Paypal again and was very glad I accept Google Checkout.  

My feeling is any type of combination would be BAD!  I know a Google Bay would be awesome but is it really in Googles best interest?

Google Checkout, PayPal and eBay   Google Checkout, PayPal and eBay

by: Harriet

Wed Oct 22 16:27:51 2008

Hopefully, they will keep their darned mitts off eCrater AND Etsy. I have a store in both and am very happy with both.

They are so easy and fun and absolutely no hassle.

And they really do get better and better.

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