Google Inc. is eliminating the Checkout icon next to ads it displays for merchants that use its alternative payment system.
When Checkout launched in 2006, Google cast the icons as a major selling point for its advertisers. The icons convey to consumers that if they click an ad, they can spend with the advertiser easily from 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.-based 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. At the time, Google said that attracting advertising was a key part of its strategy for Checkout.
Gwenn Bézard, a co-founder and research director at Aite Group LLC in Boston, says the removal of the Checkout icon may be a sign that Google is losing confidence in its Checkout product.
“I would assume that it’s a preliminary step before shutting down Google Checkout,” Bézard says. “But then why not just say it?”
Other analysts said in 2009 that Google’s pricing change, which removed the primary advantage Checkout had over eBay Inc.’s PayPal, was intended to drive users away in anticipation of shutting down Checkout (
However, Google has continued to support Checkout, and Bézard says that maybe the removal of the Checkout icon is 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 sys. Still, Bézard cautions, 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?” Bézard says. “I don’t know. It’s odd to do that.”
The e-commerce blog 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. Google’s decision to remove the Checkout icon from its ads coincides with its launch of a “+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, says Google’s biggest challenge with Checkout “is capturing the local market,” and 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 says. “Hopefully they don’t make this kind of mistake with their mobile wallet.”
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