PayPal Turns On Red Alert for Incoming Google's "GBuy"
February 7, 2006 3:48 AM
Google's GBuy online payment system has its crosshairs directly on PayPal; eBay closely watches
Much like Microsoft and Windows, Google's platform is the Web. Not that Google owns the Web, but it's presence cannot be denied nor defined. In fact, Google's global usage has become so popular lately that Google has made countless enemies in what seems like an overnight event.
The latest company to be on high alert from a Google threat is PayPal, one of the world's most popular online payment and peer-to-peer transaction services. PayPal, which has been operating for over 7 years, has enjoyed phenomenal growth in business with very few rivalries. Its services were so widely used that eBay purchased PayPal in 2002. Most eBay users now even state in their online terms of sales that they will only accept payments via PayPal.
This is where Google has just the right mix to be able to challenge PayPal. Google has search, it has ads, it has presence, it has Froogle. In fact, it has all the necessary ingredients to pose such a big threat to PayPal that Jeff Jordan, PayPal's president, requested PayPal and eBay employees to monitor and watch for any news of Google's development of a service it calls GBuy.
What has Google's competitor's worried is the fact that once GBuy launches, it is entirely possible to put in a search query for a product you're looking for, press
, and have Google deliver the results -- traditional by current standards. But unlike what's available today, it is easy for Google to put an option to pay for the item you're looking for immediately, if you have a GMail account. No vendor would have to ever see your credit card information. All payments are done seamlessly. Vendors already advertise heavily on Google. It only makes sense that you can pay for product you see in the ad.
Currently, Google is a much bigger brand name than PayPal. In fact, Google ranks as one of the top recognized brand name in the world. PayPal on the other hand, is finding that signing on new merchants is slightly difficult. This is because many people view PayPal's brand to be much weaker than that of Visa or MasterCard.
According to the Wall Street Journal
Sucharita Mulpuru, an analyst at Forrester Research, says some retailers are leery of associating themselves with a brand that is so closely intertwined with eBay's online-flea-market roots. In part because of that heritage, PayPal "doesn't feel like a sophisticated financial system like a Visa or MasterCard" to many retailers, says Ms. Mulpuru.
Having a platform has become a key strategic leverage for many companies. Microsoft, Intel,
NVIDIA, and now AMD all know this
. Right now, it is possible for Google to setup a "platform" in which all of its services operate in a coherent manner that will allow any Google users -- search, GMail, or otherwise -- to quickly and immediately pay for purchases.
Google's brand is strong. Users around the globe trust the brand and the service. Google also has a huge potential in tapping the growing Internet-aware population of China. For merchants already doing business with Google or are looking to develop new net business, Google's user base is clearly becoming the biggest potential pool of customers in the world.
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