• by Tim Daly , September 11, 2008

It all started on June 29, 2006 with the official launch Google Checkout. From there, the onslaught of public releases touting the significance and value proposition began. Online merchants and online agencies were saturated with details on the Google pet project through press releases and online marketing trade publication articles to make the offer the hot industry topic.

Google made a compelling argument for adoption despite the number of alternative payment methods available to online consumers and the previous failures by its competitors. Google's Checkout payment promised to increase your e-commerce site sales, to provide innovative coupon codes. To make the deal even juicer, Google announced they would waive all merchant credit card transactional fees. It seemed the new product was confident in outliving its predecessors and solidifying itself as a new revenue driving tool, if not an industry standard.

Yet since the beginning of 2008, the publicity of Google Checkout has all but....checked out. All news seemed pushed into the shadows of the public spotlight by Google and was largely ignored by industry mouthpieces. That is until, an SEC filing made public on Aug. 8, 2008 that shed some light on the search giant's new venture. It became apparent that no news is not good news when it comes to ventures still in their infancies.

Within its SEC 10-Q filing, Google specifically notes that they are "incurring significant costs and expenses to support our Google Checkout product and promote its adoption by merchants and consumers". In addition to this statement, they also acknowledged within the same filing that "Revenues realized through the Google Checkout were not material in any of the periods presented."

To summarize, Google has laid out significant expenditures and has yet to generate any revenues of subsistence. The mystery of the public relations radio silence was solved with the glum story laid out in their SEC filing, but a more important question arose.

Should merchants be preparing for the crash and burn of Google Checkout?

There are plenty of e-commerce applications that reside in the Search engine graveyard. MSN's Passport and Yahoo's Wallet both mark gravestones as similarly failed ventures that didn't live up to their hype. Should merchants be expecting a freshly dug plot for Google Checkout as well? We all know Google and its stakeholders demand prudence in its business practices, which may lead merchants to be browsing the digital obituaries in the upcoming months.

Google Checkout's sluggish performance may not be as well kept of a secret as Google thought, many industry insiders, including myself, declared that Google had a "Napoleonistic" complex in trying to resurrect a similarly failed product offering which both Yahoo and MSN have essentially shuttered. Somehow developers and merchants alike thought that just having the Google brand was a sure bet, all but guaranteeing widespread adoption.

On the surface, the Google service offered no new approach or alternate model than the Yahoo and MSN offerings. It now appears that simply adding a Shopping Cart icon on a search results page and paying people to use their shopping cart option was not enough to engage consumers to produce a lasting product offering.

PayPal is one of the few online payment applications that was able to corner the market. Its success is partially due to its use on the popular e-commerce site eBay and its acceptance as the currency amongst eBay users. Additionally, it provided consumers with an ability to pay by check versus by credit card, demonstrating greater flexibility than Google Checkout. PayPal was able to leverage their brand familiarity into further success and stands today unchallenged as the online payment application of choice.

In recent months, we've seen Yahoo and MSN begun to shutter some of its unproductive efforts and it would seem Google may be on the same path without some new drastic changes. Given the impact that Google Checkout has on its merchant's user experience, let's all hope that Google gives strong consideration to its merchants if a soon-to-be impending exit is inescapable.

Whether or not Google Checkout is able to escape its seemingly terminal diagnosis, these events are a strong reminder that online success is not a popularity contest; the laws of the market dictate your survival not the brand name you are attached to. While the market has not had its final say on Google Checkout, as online marketers we must remember that no matter who introduces an offering, its success is dependent upon the value it is able to create for the market...and that will take more than some flash and Google's brand name.

Perhaps Google can take the lesson learned from Google Checkout and apply it to their latest aggressive push into uncharted territory with its newly released Chrome web browser. Google was built upon the idea of providing a superior value to end users; let's hope this idea isn't lost in the amour-propre of the success that very idea spawned.