RBC Capital Markets highlighted the pending launch of GBuy, Google's new online payment system, as a major reason why it has maintained an "outperform" rating on the company. What's the big deal?
Well, the merchants that use the new payment system will provide Google with even more data about its users that it will be able to use to drive more precise targeting in future searches. GBuy is all
about data mining: "If harnessed, the precision of this targeting could be revolutionary," wrote RBC analyst Jordan Rohan in a report Friday. Users will be taken off the merchant's site to complete
transactions, enabling Google to capture and keep all the transaction data. However, Rohan noted that some merchants won't be happy that Google that is essentially using their transaction data to
drive up the price of buying keywords, by making sponsored links more accurately targeted. Rohan believes that Google will charge slightly less than eBay's PayPal service for completing
transactions--between 1.5 and 2 percent per transaction. Short-term, this won't affect Google's bottom line--much. As the search giant collects more data, driving up click-throughs at Google.com, then
we'll see it affect earnings, Rohan said.
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