Does Google Checkout Affect Your Business?

On June 30, 2006 Google launched a service called Google Checkout. This is a new application allowing businesses to process online orders through Google. It serves as an alternative to PayPal or regular credit-card processing.

It’s interesting to look at the launch of this service from Google’s point of view to try to understand how it ties in with their core business — search.

In theory, many buyers begin their shopping process by searching for what they want on Google (or any other search engine). Next, they click on an advertiser’s link and go to the business’ website. By taking care of the final step — processing the actual purchase — Google can accumulate a vast amount of information about their own advertisers and use that information to further improve AdWords.

Tie-in with AdWords

The tie-in with Google AdWords is quite logical. In fact, Google launched its Checkout service with a special promotion: for every $1 advertisers spend on AdWords, they can process $10 in sales for free through Google Checkout. For example, if an advertiser spent $1,000 on AdWords last month, this month the advertiser can process $10,000 in sales at no cost. If advertisers exceed their free transaction processing for the month, they are only charged two percent plus $.20 per transaction.

What’s more is that when an AdWords advertiser signs up for the Checkout service, all of their listings on Google are accompanied by a little shopping cart next to its listing — this is bound to attract extra attention from searchers.

The processing fees reflect what Google sees as a natural relationship between generating potential customers through online advertising and processing online sales.

While it’s still in its early stages and does not have a huge following, Google Checkout is certainly worth checking out.