Google Checkout -- the Unofficial Blog

Whatever it is, you can get it on Google

Soon after Google released its Google Maps application Paul Rademacher hacked through its code and created HousingMaps, a website that integrates Craigslist with Google Maps. Google liked Paul's work so they hired him and released a public API to enable other people to create similarly useful mashups. The move unleashed a ton load of creative work most of which is documented on the blog Google Maps Mania. Today this same blog highlighted a new Google Base service that lets users search for apartments with the help of maps. The site is very similar to Paul's original HousingMaps with the only difference that it incorporates a multitude of small housing databases including sites like Citi Habitats, Postlets, and GothamMarket -- but not bigger databases like eBay or Craigslist.

Should eBay make its listings available on Google Base?

One argument says that everyone should opt in to Base because the move would generate leads and drive traffic to one's site. A small company like Postlets would get the extra exposure that it needs to get off the ground and gain a following. A big league company like eBay is already spending a considerable budget on paid placement ads and would also benefit from some free exposure.

But let's look at the issue through a different lens. In European and Asian countries it's common to hear people say "MSN me". In that part of the world MSN Messenger is synonymous with instant messaging. Here in North America people say "Google it". Google is synonynous with search. Similarly, people also say "I got it on eBay". eBay is for many the first thing that comes to mind when someone wants to sell or buy online. It's sort of like a Pavlov reflex at the level of society.

Now take this scenario. eBay particiaptes in the Google Base program. eBay listings start to appear on Base. Consequently potential buyers would start to realize that it might make more sense to look for items on Google Base because the service gives access to ebay as well as other smaller marketplaces. In other words the eBay offering would become a subset of Google's. All other factors being equal, I would prefer to go shopping in the supermarket that offers more products from more suppliers. Three or four years into the game people's attitude toward eBay would change. And Google would replace eBay as the first place that people go to to buy things.

There is also another reason why eBay would want to say no to the search company. As a rule of thumb cobranding benefits the lesser known brand. Google is a top global brand but when it comes to listings eBay by far dominates. An association between the two companies would benefit the newcomer to the listings industry and not the world's online marketplace.

Is There Room for a Payment Startup Alongside GPay & PayPal? A Peak Into ModaSolutions.

ModaSolutions is a payments company based here in Ottawa, Ontario. They work with banks and online merchants to enable customers to buy through their online banks. The company was founded by entrepreneur Marwan Forzley who was previously director of business development at Nokia. I was invited to meet with the startup company and talk to them about their ambitions.

A different way to pay
A typical e-commerce experiece requires you to fill out your name, cedit card number, expiry date, billing address, 3-digit security code, and sometimes your 'verified by visa' password. It's more convenient if you've already stored all this information in your PayPal or Google payments account. Then all you need is a username and password.

But buying through ModaSolutions' Secure eBill is different. At checkout you only give your name and email. The company then automatically figures out your bank details and sends you an electronic bill that you can pay through online banking.

Secure eBill's value proposition
Secure eBill is at the epicentre of a triangle -- sitting between merchants, banks, and customers.

For the merchant, Secure eBill has two important advantages. First, it's cheaper for a merchant to accept payments with ModaSolutions. The payment processing fees are lower because money is transferred via direct debit and not through the more expensive credit card network. As an example Secure eBill will cost the merchant around 1% of the product price with ModaSolutions versus $0.25 + 2.5% with Google Payments. Second, the merchants can target those internet users who have yet to buy online because of security fears. According to the CEO of ModaSolutions, this market segment is more likely to do ecommerce if the payment solution does not require them to submit any sensitive information.

For the banks, ModaSolutions offers them a chance to enhance their existing relationship with their customers. Many current payment solutions abstract the bank or credit card from the shopping experience. How? Well when you give PayPal your credit card information, and then again your banking information for the sake of verifying your account, you're making it more convenient for yourself to purchase online. Because from now on you have stored your financial information in a vault, and all you need to buy is email and pass. But credit card companies and banks aren't fond of products that create a layer between them and their customers. Secure eBill on the other hand acts as a complementor to the banks. It uses their direct debit mechanism while maintaining the relationship the bank's relationship with its customers.

For the end consumer, Secure eBill gives a semblance of a more secure transaction due to the fact that the only information required at checkout is a name and email, and everthing else happens through the bank. A recent study by Jupiter Research reveals that 48 million North Americans now pay bills online and this number is projected to reach 92 million by 2009. But for most people, the sense of security that comes from paying through one's bank is countered by the inconvenience of it. On average it takes about two days to process a payment through the e-billing solution currently offered by banks. This makes me wonder if e-billing might be a solution more suited to pay for utility bills and university tuition fees rather than for items purchased online.

Conclusion: safety vs. convenience
Like any solution out there Secure eBill has its pros and con. The fact that every purhcase has to be paid through the online bank is a double edged sword that gives the company its main strength and weakness. The battle between PayPal and CitiBank's c2it payment service has has shown that the success of a payment method relies in large part on choosing an acceptable balance between convenience and security -- a point in the graph that makes for a great user experience while at the same time keeping risk at check. And although the established payment companies might own the sweet spot that appeals to the mainstream, other lesser known companies might appeal to certain subsegments of consumers. ModaSuolutions belongs to the latter. I would keep it on my radar.

An Interesting Example of How Google Could Use Its Search Muscle to Push Payments

According to the folks at GoodROI, Google has started to experiment with a new tool that lets a user refine a search to a specific Google Base listing type. So for example if you go on Google.com and search for "homes for sale" you get a small box on the top that asks for the location, the listing type (prefilled to "housing") and a button that says "Search Housing". Update: Career search listings were also reported on SearchBlog.

This is an interesting example of how Google can use its core competency of search to leverage new services in a way that is helpful to the customer.

I would expect the company to follow a comparable strategy when it comes to their payment product. As an example when you search for "camera reviews" Google would display regular search results like shopping comparisons sites, official product pages, user reviews; but also some premium results maybe with a small dollar sign indicator. When you click on such a premium result you would be redirected to a page where you can buy the report and then view it on the publisher's site.

Sightings of Google Video Ads. Payment Functionality to Follow?

I just read on GoogleRumors there have been some sightings of Google video ads. Do you see the "Ads by Google" note on the bottom right of the picture?

From the post:

We just spotted a video AdSense ad and after a quick Google search this appears to be new. The path from just text to full multimedia has finished (text->images->animation->Flash video). The ad in question appeared on entertainment centric site The Superficial and use the normal AdSense inclusion code for text/image ads. Screenshot follows:

That's an interesting development especially for companies like YouTube who I am sure have been eagerly waiting for a better way to monetize their site than through regular AdSense ads. I'd say that until this point the tremendous bandwidth costs they were incurring far outweighted the money that came through contextual ads (that are very often irrelevant).

A cool payment-related product feature would be to be able to click on a button at the end of the ad segment and be redirected to a page where you could view more information or buy the advertised product with your Google Account - similar to interactive TV where people can conveniently order a pizza after seeing the pizza company's ad during a mid game.

How a Small Google Project for Soccer Fans Might Evolve into a Standalone Single Sign On Product

Nathan Weinberg from InsideGoogle wrote an interesting story yesterday about Joga.com, a joint venture between Nike and Google. From the site: "Joga is a place to meet other soccer players, share your own soccer experiences and enjoy photos and videos from around the world."

What caught my eye on Joga was the fact that you can login to the site using your Google Acount although the site is clearly outside the Google network. It doesn't have a Google domain name and it doesn't share the Google look & feel (although the domain name is registered by Google). Does this project herald Google's aspirations to deploy a Single Sign On solution that will enable consumers to log on to internet websites with their Google Accounts?

Google has a history of releasing new features in a way that seems random and undeterministic. Those features tend to bubble up the product development pipeline if they receive a good user acceptance. For example Google Desktop Search started off as a small project by Steve Lawrence, a Google engineer who wanted to be able to easily search his Linux computer. A first beta version was released and now GDS is at its third iteration out of beta.

Don't think of it as a grand Google initiative to take over the web with its user names and passwords. It's more like a couple of soccer loving Googlers working with some sofware engineers at Nike to test a cool new way to mix social networking with Google Video and Google Accounts. This small initiative might evolve into a bigger project comparable to the Liberty Alliance or the Microsoft's .Net Passport - although it will probably come with a creative twist.

Localization & Scale: Two Big Advantages for the Google Payments Corporation

I was reading Goole's annual filing with the securities and exchange commission and came across an interesting paragraph about the payment methods that Google currently accepts through its AdWords program.

According to the filing, Google currently offers its advetisers multiple payment options. Depending on the geography, Google accepts bank and wire transfers direct debit, local debit cards with the Visa and MasterCard logos, and international credit cards.

In a blog entry that was posted a while ago on the Official  Google Blog, Benjamin Ling and Tom Oliveri, product and marketing managers, said that:

"Over the past four years, Google has billed advertisers in 65 countries more than $11.2 billion in 48 currencies, and made payments to advertising partners of more than $3.9 billion."

Conclusions:

• First, Google will have a much easier time to expand its payment service to new countries.
• Second, the company will be able to process purchases much more cheaply than some of the established payment processors because of the scale at which it's starting at.

Google Can Manage the Bits. But Can European Retailers Manage the Atoms?

The Financial Times is reporting that Google wants to enable European retailers to use Google Base as their retail platform.

Why is Google targeting Europe before North America? Apparently Google made 20 interviews with Europe's top retailers and the general feeling was the they were dissatisfied with their online operations.

Also and that's just my analysis the retail industry in the US is much more conglomerated meaning that less companies control more of the market. Europe is more diversified primarily because of the different countries / languages. Another reason (and this one is from the FT)  might be that more American retailers have partnered with Amazon to sell their products either through Amazon.com or through Amazon's technology.

The technical side of such a partnership would not be a great challenge. For starters a retailer would be able to send a feed of all its available products, quantities, and prices (similar to RSS). Google can process this feed and display the information to the user. This is sort of how Froogle works now. Of course there's the payment aspect that includes settlement, fraud prevention, cancellations. But that has all been done in the past by many payment companies.

The real challenge here is the shipping. What happens after the payment is done? Which warehouse should the retailer send the product from? If the customer bought 2 different products from 2 different retailers does that mean she has to pay shipping twice although it was just one order? What about the process of packaging the  item and sending it over to the shipping company.

Ideally it would be muh more profitable for Amazon to focus on the software and be a storefront for not only all bookstores but all retail stores period. Amazon would be like an eBay for big businesses. But in the dot com animal kingdom, natural selection has favored those online retail stores with their own warehouses, and the companies with the "storefront only" gene died -- read Value America.

I've seen Jeff Bezos give talks on quite a number of occasions and logistics is a topic that comes up often. How do you solve the travelling salesman problem of picking items shopping items from across the warehouse in the shortest time possible.

Google has done a great job of dealing with information. And there's no doubt that the google base solution would be great from the presentation, usability, and payment perspectives. But dealing with bits is different than dealing with atoms. And it is up to the retailers to see if it makes sense to have a store in the Google Base mall, and if they can profitably tailor their backend operations to an online model.

PS: It might be speculative on my part but I wouldn't be surprised if Google bought a company full of smart PhD's who spent thei last 10 years of their lives trying to find more efficient heuristics to approximate algorithms the knapsack and traveling salesman problems and whose flagship product is a web-based inventory management system that seamlessly integrates with google bsse.

Meg Whitman on Advertising with Google and Skype's Pay Per Lead Potential

I just discovered an interesting CNBC video interview with Meg Whitman, eBay's CEO. The interview took place about a month ago and sheds light on some interesting facts about eBay's relationship with Google and a potential new Pay-per-lead pricing model.

On Advertising with Google:

Reporter: Are you the largest advertiser on Google? 
Meg:  I don't know if we're the largest but we're certainly in the top 2 or 3

Reporter: Did pricing go up or down during the course of the quarter for you?
Meg: The average cost per click went up somewhat but we were able to offset that increase by smarter buying across the 10 million keyword portfolio that we manage every single day at eBay.

On the Pay Per Lead Model:

When asked about how her company will benefit from Skype's acquisition Mrs. Whitman said that you would be able to pay for the value-added Skype services using your PayPal wallet. She also mentioned that Skype will soon be integrated with eBay owned marketplaces later this year.

Meg goes on to say that she's looking very closely at a Pay Per Call business that will follow a Pay Per Lead model as opposed to the usual Pay Per Transaction model that everyone is familiar with on eBay.

Currently eBay takes a listing fee when someone posts an item on the site and also a transaction fee when the seller receives the money for a sale. eBay could extend its services to include a third type of fee that we'll call, say, an "inquiry fee". A potential buyer calls the seller (through skype) to ask questions, or bargain, or ask for shipping details.

It's interesting that eBay and Google seem to be going towards the same goal from two opposing directions.

Google has already started a test version of its pay per call ad model on its search engine results pages. It is getting ready to launch a pay per transaction model pending the official launch of its GBuy payment service.

eBay on the other hand has been doing pay per transaction all along. It is going to launch a pay per call service pending the integration of Skype toward the end of the year.

Here's the video again. The interesting stuff is toward the end.

(image courtesy of Time Inc.)

Gbuy & Trogdor: How a Google Website Editor Can Drive Adoption of Gbuy

According to Valleywag, a Silicon Valley rumors blog, Google has a secret project codenamed Trogdor. Trogdor is a webpage editor (like front page or dreamweaver) that enables developers to create easy Ajax-based webpages.

This editor would be a good support to the gbuy product. Small merchants, usually web entrepreneurs with some technical skills, have two ways to receive payments on their ecommerce site:

• Integrating with the payment processor's API through SOAP, Get requests, POST requests, etc. This requires realtively advanced technical skills like server-side scripting, sessions management, etc.
• Creating a link or 'html code snippet' and adding it on their webpage. A customer would click on the link, get redirected to a page hosted by the payment provider, complete the payment, and then redirected to the merchant's webpage.

The second option is the easier one in terms of programming skills. And it usually entails copying and pasting code from the payment provider's website to the merchant's page. The task of creating and managing those links gets tiresome after a while.

If the webpage editor is connected in some way to the payment provider then it would make it much more convenient to the merchant to manage those links.

In other words the merchant would be able to create a new product (listing its name, price, description, etc) straight from the editor and get the appropriate link immediately by clicking on a button.

Payment providers have done something similar in the past. For example PayPal offers plugins to popular website editing programs to make the task of integrating payments easier. But they never went as far as creating a complete editor from the ground up.

This move should make it easier for Google to grab the rightmost part of the web merchants long tail: the many merchants with low-volume transactions.

(image courtesy of Wikipedia )

Gbuy / Google Payments - a Ten Page Strategy Report

Here's a ten page report that I wrote about how Google's Gbuy service or Google Payments fits into the company's overall strategy:

                                 GBuy_Google_Payments.pdf

Here goes more poker rules and strategies