My last post on GBuy got picked up by Blogma (Bloggers anticipating the GBuy Threat) -- a blog listing chosen by CNet Editors and Readers. In that post I had wondered about the possible threat to Amazon (AMZN) from Google's GBuy (GOOG). Interestingly this is the most common view shared by some other tech media articles and bloggers like Om Malik (Why is Google doing Checkouts?). I am however tending to feel that eventually Amazon will not be hurt that bad and Google will just benefit from bigger business coming from small-medium businesses and its existing Advertisers.
Om Malik posits that since Checkout is about Cost-per-action Advertising that eventually is the killer feature of this new Google product:
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?
Who Is Impacted?
This move impacts three companies mainly - eBay, Yahoo and Amazon - because these are the three premier gatekeepers of online point-of-sale info. Google doesn’t 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.
Having said that - Amazon and eBay are more at risk. Despite having a large number of “proprietary eyeballs,” they lack their own advertising system, and need to depend on third party.
After some thought and video review of Checkout's capabilities on CNet by Rafe Needleman; I believe that Checkout will possibly help Google build revenue from small and medium sized businesses that do not have a strong online presence and would benefit from the partnership with Google on the eCommerce front.
Google's Checkout allows eCommerce activity not only from the Search Results page but also embeds a button that allows users to pay online using checkout from a 3rd party business vendor's website. (See the CNet video).
Continued... Google's Checkout Strategy -- Target Google's Advertisers & Small-Medium Biz
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Posted by: Bill | July 4, 2006 5:46 AM | Permalink to Comment