• by July 5, 2006

We're so tired of hearing about Google's voracious appetite for all things advertising and media that it was kind of refreshing to see the search giant unveil a new product that is more transaction-related. Since its market cap hovers around $130 billion, give or take a few, it's no real surprise that Google has the R&D horsepower to design, build, and implement anything it sets its mind to.

Google Checkout also ties in with the company's core search platform and will enable it to develop new opportunities with retailers. The product likely will help Google forge deeper relationships with retailers and more usage of Google AdWords, according to a Merrill Lynch research report. Checkout will help Google gain more information on consumers' purchase habits, intelligence that could be used to better target query results.

The goal of Google Checkout is to increase retail advertisers' return on investment. Industry data indicates that more than 50 percent of inventory placed in online shopping carts isn't sold, according to the ML report. The goal of Google Checkout is to make transaction processing easier and more streamlined, and to boost merchant conversion and ROI.

Obviously, Google thinks higher ROI will ensure more ad spending on its network. Google also aims to lower merchants' transaction processing costs and improve search click-through potential as incentives for adopting Checkout.

The real question lies in whether Checkout will be adopted as "the" alternative to PayPal. We shall see.