[IP] Google's GBuy Could Be 'Revolutionary'
Begin forwarded message:
From: eekid@xxxxxxx
Date: June 12, 2006 7:10:37 AM EDT
To: dave@xxxxxxxxxx
Subject: Google's GBuy Could Be 'Revolutionary'
Google's GBuy Could Be 'Revolutionary'
RBC Capital Markets maintained an "outperform" rating on Google in
light of the impending launch of the company's online payment system,
currently known as "GBuy."
Consumers using GBuy, which is set for release on June 28, will be
taken off the merchant's site to complete the payment. This will
enable Google (nasdaq: GOOG - news - people ) to capture e-commerce
transaction data, driving more precise targeting in future searches.
"If harnessed, the precision of this targeting could be
revolutionary," wrote RBC analyst Jordan Rohan in a report Friday.
On its core search results pages, Google will designate each merchant
accepting GBuy as a "trusted GBuy merchant." If consumers view this
as a mark of safety and security, Rohan believes this should increase
click-through rate.
The analyst expects some resistance from merchants who will fear that
Google will use the transaction data to charge them more for
sponsored links in the future. Google's bid rank algorithm is
influenced by click-through rate, and would, therefore, favor GBuy
merchants, he said.
GBuy looks to be a direct competitor to PayPal's "off-eBay (nasdaq:
EBAY - news - people )" initiative, which is still early in its
development, Rohan added. During the beta phase, Google will not
charge merchants for its payment service. After some period, the
analyst believes Google will charge 1.5% to 2%, in-line to slightly
below that of PayPal.
"Short term, GBuy is more negative for eBay than it is positive for
Google," Rohan said. "Longer-term, it could be a game-changer."
http://www.forbes.com/markets/equities/2006/06/09/
google-0609markets09.html
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