Google Launches Payment Service

Google on Thursday launched its highly-anticipated payments service, dubbing it Google Checkout. While at first glance, the Mountain View, Calif. company's new offering may look to compete with PayPal directly, it differs from the popular payment services in a few key ways.

Instead of acting as a depository for funds, Google Checkout aims to speed the checkout process by acting as a method to send personal and financial information to participating merchants. The customer does not need to enter any information in order to make purchases.

The service is available only to businesses that advertise through Google's network. To inform users of which advertisers are supporting the program, a green shopping cart icon would appear by the advertisement in Google's pages.

Google Checkout would be offered to advertisers for free. Initially, participating merchants include Jockey, Starbucks Store, Levi's, Dockers, Buy.com, Timberland, Zales among others.

"For shoppers, the goal of Google Checkout is to include more relevant information in search advertisements and make it easier to buy from sellers with a single login," product manager Eric Lange said. "For advertisers, we want to make it easier to attract new customers and process their purchases for free."

It is unclear what eBay's position on Google's latest move is as the company has refused to comment. eBay is one of the search engine's largest advertisers.

Analysts gave the service high marks initially. "It's brilliant - by tying the wallet service to search, Google creates a huge incentive for its retail advertisers to participate," Charlene Li of Forrester Research said. However, she was concerned that Google's moves in the information arena could be seen as similar to that of Microsoft.

"Instead of dominating operating systems and software, Google is instead dominating our information," Li said. "So at what point does Google step over the line and extend its products and services too far?"