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Checking Out Google Checkout
Mary Crane, 06.29.06, 11:53 AM ET
Google's new online purchasing service, dubbed Google Checkout, opens up a "whole new world" of targeting capabilities and search capacity for the online search giant, according to RBC analyst Jordan Rohan in a report Thursday.
Announced Wednesday, the service processes online payment services between consumers and merchants similar to eBay's PayPal.
Management indicated Google Checkout will roll out with an initial roster of about 100 merchants.
The service is also integrated with Google's search advertising program, AdWords, which the company said helps sellers gain new customers. A percentage of the 2% transaction fees merchants pay to use Google Checkout will be credited against future keyword purchases on Google AdWords, the company said.
Google Checkout's rollout was well-planned, Rohan said, complete with an initial discount for new Google Checkout customers.
"Unlike many other Google products, Google Checkout seems to have a well-reasoned product release strategy and an appropriate amount of marketing support," the analyst said.
He added that the cost of rolling out the new payment service may pressure margins for a "very small percentage of Google revenues," it opens up all kinds of opportunities for targeting Google users and refining search capabilities.
The analyst maintained an "outperform" rating and $465 price target on Google stock.
Google's biggest challenges at this point, besides general market concerns and an overall Internet stock multiple contraction, is competition, Rohan said.
Competitors like Microsoft (nasdaq: MSFT - news - people ), which recently launched its own search engine, are looking to gain users, search query volume, search network affiliates and technological supremacy.
Mary Crane, 06.29.06, 11:53 AM ET
Google's new online purchasing service, dubbed Google Checkout, opens up a "whole new world" of targeting capabilities and search capacity for the online search giant, according to RBC analyst Jordan Rohan in a report Thursday.
Announced Wednesday, the service processes online payment services between consumers and merchants similar to eBay's PayPal.
Management indicated Google Checkout will roll out with an initial roster of about 100 merchants.
The service is also integrated with Google's search advertising program, AdWords, which the company said helps sellers gain new customers. A percentage of the 2% transaction fees merchants pay to use Google Checkout will be credited against future keyword purchases on Google AdWords, the company said.
Google Checkout's rollout was well-planned, Rohan said, complete with an initial discount for new Google Checkout customers.
"Unlike many other Google products, Google Checkout seems to have a well-reasoned product release strategy and an appropriate amount of marketing support," the analyst said.
He added that the cost of rolling out the new payment service may pressure margins for a "very small percentage of Google revenues," it opens up all kinds of opportunities for targeting Google users and refining search capabilities.
The analyst maintained an "outperform" rating and $465 price target on Google stock.
Google's biggest challenges at this point, besides general market concerns and an overall Internet stock multiple contraction, is competition, Rohan said.
Competitors like Microsoft (nasdaq: MSFT - news - people ), which recently launched its own search engine, are looking to gain users, search query volume, search network affiliates and technological supremacy.
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