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Thursday, June 23rd, 2005

Google Wallet to Fatten Google's Wallet

 

This week, Google leaked information about another very smart thing they’ve done. Google is about to introduce an online payment system to help facilitate e-commerce. While search engine observers speculated that Google was going head to head with Pay Pal, CEO Eric Schmitt was quick to dispel rumours that they were gunning for Pay Pal. In an interview with Reuters, Schmitt said that Google was not going to offer a “person-to-person stored-value payments system” like PayPal’s, where money is briefly stored in trust during the transfer.

“The payment services we are working on are a natural evolution of Google’s existing online products and advertising programs, which today connect millions of consumers and advertisers,” Reuters reported Schmitt saying during a brief interview.

Google has been experimenting with a payment system since March of this year when it began testing a third-party system to send payments to webmasters running AdSense advertising.

The move is good for Google, which draws over 95% of current revenues from paid-advertising. Google wallet might put them in the position of facilitating the entire online product purchase experience.

Diversifying services that can be easily monetized is also important for investors who have rewarded the Google with a reversal of a small slump in share prices earlier this week. The reversal might come at the cost of Pay Pal owner eBay whose shares have lost 2% since rumours began circulating two days ago.


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