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Wednesday 22 June 2005

Google vs eBay [Lurks]

I'm a fan of Google. They've consistently delivered services which are not only useful to me as an Internet user but I admire their business accumen in commercialising some of their key developments while still keeping plenty of surprises in the pot through a solid research and development background.
This is in stark contrast to eBay, who I despise. These guys are everything that's wrong with corporate profiteering including shabby support, acting unilaterally without any resource to customer service concerns and of course, they just get more expensive because they realise they're the only game in town.
With these two rampant opinions stated, it must come as no surprise to learn that one development that would fill me with deep joy would be Google setting up as a competitor to eBay. However there's never really been any indication that they would do that.
However the big surprise came when news started leaking that Google was working on a payment system, potentially something to rival Paypal. Paypal being part of the Evil eBay Empire and another mechanism to skip yet more off the top of anything you sell.
This was kinda puzzling and I had this in the back of my head for awhile... what is Google's interest in payment systems really? Cryptically Google's CEO Eric Schmidt confirmed they were working on a payment system but cryptically denied that it wont compete directly with Paypal. What he actually said was;

"We do not intend to offer a person-to-person, stored-value payments system"

And then went on to say...

"The payment services we are working on are a natural evolution of Google's existing online products and advertising programs which today connect millions of consumers and advertisers"

It might sound cryptic but one of my tasks in my day job is maintaining a commercial Google AdWords campaign so I'm quite familiar with Google's existing business here - meaning bidding on keywords, billing advertisers for clicks and so on. To me the answer seemed pretty obvious.
Google is going to resurrect the concept of micro payments. For those that remember the various shenanigans of the .com boom, micro payments was one of those things that was going to revolutionise the web and make everyone rich. The concept is that everyone is willing to pay a few coppers to visit their favorite web sites and when you total up the gargantuan traffic available on the web, this can turn into a decent revenue stream which can then fund web sites. Basically micro payments is a solid concept and something which is a very good thing for us, users of the Internet. It means that they'll be less of the annoying scams to get you to click on things and ridiculously intrusive advertising since the web's only real income (for editorial sites, let's leave porn out of this for now) is advertising at present and hence sites often have to sell their soul in a competitive market.
So how does Google fit into this? In essence Google is the big brand, the company well regarded enough by consumers, that they could kick off membership scheme. This would appear in the rest of the portfolio of products like Gmail, Google groups and the customisable 'portal' stuff they're just getting into now. You simply load a few quid in and...
Bosh you can go surfing all sorts of web sites with subscription content. This is a brilliant move for Google because, since this content goes behind closed doors, it serves as a sort of lock in on the Google search engine as well! Right now if you use Google news, they have set up agreements to be able to spider content located on subscription web sites. Those sites let Google in so traffic gets driven to them and people sign up.
Now imagine this stuff on the regular web search stuff. You look for something, a hit turns up and it says underneath "Googlepass" needed.
There's a lot of other talk by analysts out there about how they believe Google is going to roll this out to the Froogle price search system. I dunno really, that's an area of the business that has a lot of competition from much more established players throwing the big bucks at it such as Dealtime, Kelkoo and Pricerunner etc. I think the pay-per-click model for e-tail shops listing on those sites is proven and I'm not sure Google can really add something here by tying in a single method of payment. But I could be wrong.
This is probably a case of wishful thinking but I think the micro payments thing is more interesting for us and I think Google is fairly uniquely positioned to do it. If it happens, this will be one of the biggest upheavals of the Web imaginable. In a good way.


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