• The New York Times, Wednesday, December 20, 2006 11 AM

Thanks to Google Checkout, Steve Grossberg, an online video game seller, is selling product apace. A new promotion from the Web media giant, designed to ramp up usage of its new payment service by merchants, allows Grossberg to shave $10 off any purchase over $30, which at an average cost of $50, covers just about game on any system. Sales have tripled, and best of all, Google isn't charging any processing fees until the New Year.

Happy holidays, indeed--and a big ouch for eBay. The promotion means no merchant in his or her right mind wouldn't want to sign up for and use Google Checkout. Grossberg, for example, is so happy about the good tidings Checkout brings, that he plans to begin a new marketing strategy next year. Place more ads alongside Google's search results at the expense of paid listings on eBay.

That's precisely what the search giant wants most from Checkout: more search advertisers. And the plan seems to be working, as usage has skyrocketed, and many merchants already use Checkout more than eBay's market-leading PayPal.

Goldman Sachs estimates that the Checkout promotion costs Google about $20 million--nothing to a company with a market cap of $125 billion. As Stifel Nicolaus & Company analyst Scott Devitt says, "Checkout could be a game changer, and the competitors are doing nothing of the sort."

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