Google Checkout Impact

Om Malik writes:

Read between the lines – this is a dangerous and most brilliant assault on the cost per click (CPC) plans of Microsoft, Yahoo and everyone else who is coming to the party late. This move is about cost-per-action advertising. It is about kicking up the online advertising business another notch!

Lets compare the two – CPC and CPA based ads. In case of CPA, there are no wasted dollars, no click fraud, and all the revenues are coming from sales. As an advertiser, you have no risk. You sell, you make money, Google gets a piece of the action. Why would you bother with other options?

This move impacts three companies mainly – eBay, Yahoo and Amazon – because these are the three premier gatekeepers of online point-of-sale info. Google doesnt have the information, and needed it. If (bold for a reason 🙂 ) Google can make the Checkout work, the three giants suddenly have lost their advantage over Google.

Google Watch lists out 10 of them for GBuy. Among them:

1. Google changes how AdWords are bought. As more and more advertisers use GBuy, Google will collect data on which AdWords are most effective at converting clicks, and which clicks convert to sales. Google would then be able to set AdWords prices based on the average ROI to advertisers for that word.

2. Google personalizes your search results like Amazon. You may start seeing “people who searched for this also search for…” Google may be reluctant to do too much with its core search though. This feature could be a powerful add-on, like Google Desktop search.

3. eBay steps up their advertising campaign and partnership with Yahoo. eBay throws more dollars at its contextual ad system, AdContext, and its keyword-based text ad product, eBay Keywords. (In the Yahoo PayDirect days, Yahoo allowed both PayPal payments and PayDirect payments on its auction site. I wonder if Yahoo and eBay will have anything to do with GBuy.)

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Rajesh Jain

An Entrepreneur based in Mumbai, India.