The retail sector is square in Google’s sights. While the other major search engines focus on online software and services, Google has recognized the need to crack the lucrative online retail market.

Google Base, launched in Nov 2005, was the first sign the Google was finally making moves towards an online retail presence. Though still in beta, Google Base has been the foundation for many more developments towards seriously challenging the reign of eBay and Craigslist.

Last Thursday saw Google rollout the first trial of its payment processing gateway. Aimed at challenging PayPal’s (eBay’s online payment system) virtual monopoly on the e-commerce payment market, their new service will be available to Google Base customers providing an all-in-one online retailing solution.

Their new payment platform is not restricted to Google Base customers only, and considering its transaction costs are cheaper than PayPal’s fees, it appears an online retailing dogfight is looming. While other payment platforms have come and gone, Google has the power to enter the market and genuinely give PayPal a run for its money (Pun intended!).

Google’s efforts to enter the online retail sector don’t end at their new Google Base and payment gateway. The latest speculation suggests Google is releasing an e-commerce search engine that will allow retailers who do not currently sell products online to gain an online presence.

While most of the latest online retailing initiatives are being trialed in Europe, this latest venture has some clear long term revenue potential for the search giant which should make Google’s weary shareholders much happier.

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