The news broke late last week by way of the Wall Street Journal with rumors of a payments service akin to PayPal forthcoming from Google, seeming new masters of the web world.
Some of the speculation was cleared late last evening with comments from Google CEO Eric Schmidt who claimed the wunderkid of online search would not venture into eBay’s turf. However, other innovators have been known to use the ‘head shake’ to brush off early competitive concern while they take the pulse of a market sector and possible room for additional players.
Google does wave a big stick, with revenues and a stock price enabling it to venture into many arenas, however, eBay being an equally entrenched global brand, the cost could be too great to go head to head. Much speculation now points toward a possible electronic payment service tied to Google’s existing Froogle shopping search property.
I have used PayPal personally and professionally nearly since its inception, and am one of its 72 million registered members. I have found it valuable both as a consumer and as a developer for its ease of use, low cost of entry and sensitivity to changes in Internet commerce. My own concern of Google entering the e-payments fray comes from watching them move from search pioneers and experts to a diversified technology firm with fingers in an endless number of pies – and perhaps spreading themselves thin.
They absolutely lead the search field currently – however – if they become an IBM or HP like company with bloat that slows its moves – eBay's tight focus on commerce would surely leave them perpetually in second place.
In the few short days that fever spread across the tech sphere that the two would go head to head, I informally queried some business peers for feedback on the possibility, including a web proprieter in Europe, an SEO expert who dabbles in ecommerce in the Western US as well as a Midwestern US tech-savvy marketer. Their comments were varied and interesting and I thought I would share them as well as look for SitePoint readers comments.
My good friend (a web developer and multimedia designer) at the foot of the Bavarian Alps suggests it would benefit him based on his Google AdSense income, allowing him to store the funds within Google and perhaps use those dollars for advertising or some other purpose. He did note he uses PayPal to accept donations or sell through his various online properties.
“Competition breeds innovation, and so is always welcome. The danger in this particular case is that it could make Google so omnipotent, that is turns into a reviled monsterous company- putting it at odds with its “do no harm” credo,” added Chris Kramer, an SEO expert.
He does believe that Google, if they choose to enter the space, should make the usability factor so easy that his grandmother could setup the service. Perhaps that is a slight nip at PayPal, although myself I find PayPal quite easy to use.
Perhaps most telling is the comments of a non-Internet based marketing professional, though he is technically savvy and hip to cutting edge products.
“Competition is good, and Paypal rather owns the segment so far. Having only one player in a market segment is usually a negative for consumers (I wish instead that Google would do an Ebay competitor. Google knows what Ebay does not – simplicity is key).”
He does add that Paypal does a hell of a job in most respects (security being #1), but are vulnerable in marketing and deployment.
“The messages they use are dorky and overreach for a safe and stable image. I think the place in a consumer’s mind they want to occupy is always cutting edge – in security, in groundbreaking new products, in reach of product availability, etc. Using bald guys at desks is the wrong approach.”
Therein lies Google’s opportunity. As I mentioned earlier, eBay and Google have solid branding, though Reis and Trout “Positioning: The Battle For Your Mind”) would argue that line extension (Google broadening its product portfolio) is a dangerous path – the latter a reference from my well-read marketing friend.
As a final thought – while webmasters and developers may explore a Google service – convincing the average Joe would bring in the gravy for a payment service like PayPal. My informal research group agreed that the average consumer will only gamble so much with online service outside of zero-fraud liability. Thus, if PayPal works for the user, why bother trying out any other service. Perhaps that would be the biggest hurdle, even if Google does steer clear of PayPal and eBay waters.