Electronic Wallet Makes Sense for Google

Opinion: Offering an electronic payment service makes sense considering Google's stated ambitions of enabling consumers to locate and purchase content, goods and services of all kinds through its search engine. But it can hardly pose a serious comp

It makes sense that Google would introduce an electronic-payment service that will make it easier for customers to buy and sell goods through in Web search, advertising and market portals.

But it doesnt necessarily follow that Googles payment service will present a serious near term competitive challenge to PayPal electronic payment system that is a virtual requirement for anyone buying and selling goods on eBays auction site.

However, a Wall Street Journal news article Friday based on unnamed source said Google is will be ready this year to introduce an electronic-payment service, code-named Google Wallet, that stock market analyst said could adversely affect PayPal.

So far, Google officials are declining to comment on whether they have any plans to launch a PayPal style electronic-payment service.

Google already has its AdSense micropayment billing systems to enable customers to pay for advertising.

A PayPal type of payment system would allow customers to maintain balances in their accounts as if it was a checking or savings account.

The service is mainly used by people who regularly trade on eBay or are running an online business, either through eBay or through their own commerce sites.

/zimages/3/28571.gifClick here to read Larry Seltzers opinion that Google ads indirectly support adware and Internet domain parking.

Such a payment system would be valuable for Google as it continues to expand the goods and services it sells online, particularly its Froogle online shopping service.

Right now, most of its revenue comes from online advertisement. But its clear that Google wants to broadly expand the content and goods it sells online.

An electronic-payment system would be essential for Google to expand its ability into a market for books, text documents of all kinds, video and audio.

Once such a system is in place, there really would be no limit to what Google could sell online.

It already sells advertising placement on an auction basis. There is no reason why it couldnt expand that into other goods as well.

Next Page: A serious threat?

John Pallatto

John Pallatto

John Pallatto has been editor in chief of QuinStreet Inc.'s eWEEK.com since October 2012. He has more than 40 years of experience as a professional journalist working at a daily newspaper and...