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Friday, June 24, 2005

CEO Schmidt Talks Down Google Wallet

Posted by @ 12:18 am

Several days after the rumors about a new PayPal style payment service from Google (code-named “Google Wallet”) surfaced, Google’s CEO Eric Schmidt publicly denied that Google was working on a payment system to compete head to head with eBay’s PayPal.

On 21 June, Schmidt was quote in an Associated Press article as saying “We do not intend to offer a person-to-person, stored-value payments system”. He then stated that “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”, without elaborating further.

The article (available on MSN Money) also cited that some analysts believe the new payment system could be connected to the shopping engine Froogle or be used to pay for content found through search engines.

Internally, we here at ineedhits were wondering whether cost savings and the pursuit of operational efficiencies were playing a role in Google’s payment systems activities. Just think of all the publishers who have signed up to Google AdSense and are getting monthly checks or electronic funds transfers (currently still in beta) from Google when their payment is due.

I don’t know what Google’s cost structure for these types of transactions looks like, but the sheer volume of transactions would suggest that any kind of cost savings through cheaper payment systems could make quite a big difference to their bottom line?

I’d love to hear what you think!

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