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Friday, June 30, 2006

Google is the New Microsoft

Google announced the launch of its new product, Google Checkout, yesterday. Why is a search engine company launching a PayPal competitor? Over on the Inside AdWords blog, a post about Google Checkout states, "That gets back to the motivation for the product - buyers often start the purchase process by searching online and they're looking for places to shop that are convenient and secure. Google Checkout makes it easier for shoppers to find these places by displaying the Google Checkout badge on the advertiser's AdWords ads." Just like Microsoft leveraged its OS to promote IE, Google is using its search engine (the OS of the Web) to promote its new ecommerce solution.

Is this a smart business move or is it anti-competitive? Is this move a sign that Google's going to use its hegemony on the Web much like Microsoft uses its OS hegemony to crush competition? Regardless, I think Google needs to change its "Don't Be Evil" mantra. That's starting to sound a bit hollow and rather naive.

Will AdWords advertisers take the bait and switch to Google Checkout or at least add it as an option in addition to PayPal? Will consumers be comfortable sharing all of their information with Google? With this foray into shopping services, will Google build a real customer service operation? Perhaps Google has overstepped its reach here and people will think of them as the new Microsoft.

I think the adoption rate will be slow. Merchants already have plenty of ecommerce solutions. Rebuilding back end systems to cater to the new Microsoft (I mean Google) is not an impulse decision. OTOH, if enough advertisers make the switch and their AdWords ads with the Google Checkout badge gradually rise to the top of the Google search results, it might force other advertisers to utilize Google Checkout. Do you see the unfair advantage Google could have? Then again, perhaps this is simply another shrewd business move. Is it fair to label Google as the new Microsoft?

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Blogger Aaron said...

Smart post, Richard. My 2 cents is that Google sees this as a "shrewd business move." From their perspective, why not provide users with as many services as possible--one-stop shopping, literally and figuratively. It's the response that one can never be sure of. Looks as though eBay is setting some guidelines:

Thu Jul 06, 04:39:00 PM EDT  
Blogger Richard said...

Thanks, Aaron. Yeah, it will be interesting to see the adoption rate. If Google Checkout reaches critical mass, eBay will have to capitulate. BTW, I enjoy reading your blog. Your business reminds me of my client, Maine Munchies.

Fri Jul 07, 09:30:00 AM EDT  

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