Google Inc. is eliminating the Checkout icon it displays next to ads for merchants that use its alternative payment system.
When Checkout was launched in 2006, Google cast the icon as a major selling point for advertisers. The symbol conveys that if consumers click an ad, they can easily spend with that advertiser using a payment card attached to their Google account.
The elimination of this icon, announced last week, is the second instance of the Mountain View, Calif., company distancing its alternative payments offering from its advertising service. Originally, Google offered free transaction processing to companies that advertise with it, but in 2009 switched to a pricing model that was nearly identical to that of PayPal Inc. Originally, Google said that attracting advertising was a key part of its strategy for Checkout.
Gwenn Bezard, a co-founder and research director at Aite Group LLC in Boston, said the removal of the Checkout icon may be a sign that Google is losing confidence in its product.
"I would assume that it's a preliminary step before shutting down Google Checkout," Bezard said. "But then why not just say it?"
Analysts said in 2009 that Google's pricing change, which removed Checkout's primary advantage over eBay Inc.'s PayPal, was intended to drive users away before shutting down Checkout.
However, Google has continued to support Checkout, and Bezard said that the removal of the Checkout icon is possibly part of a plan to combine it in some form with Google Wallet, the company's recently unveiled mobile payment offering.
"It sounds like they are retreating … before coming back with a different offer," he said. Still, he cautioned, this is not the obvious conclusion to reach from Google's actions.
"If they are rebranding their payment capabilities, then why would they remove it?" Bezard said. "I don't know. It's odd to do that."
The e-commerce news site AuctionBytes.com suggested in a June 2 article that the branding change is part of Google's plan to use the real estate on its ads to promote a separate service. The decision to remove the Checkout icon from its ads coincides with the launch of the "+1 button," the search giant's version of the ubiquitous Facebook "like" button. The feature, which was launched in March, allows users to recommend websites and products.
Brian Riley, a senior research director in the retail banking and cards practice at TowerGroup, said Google's biggest challenge with Checkout "is capturing the local market," and that removing the Checkout icon distances it from this audience.
The change to Checkout affects "how it's going to fit in with the merchant community," Riley said. "Hopefully they don't make this kind of mistake with their mobile wallet."
