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January 27, 2007

Gates says Microsoft developing an online payment system

Posted by David Hunter at 10:41 PM ET.

(Via Adam Cohen of Dow Jones has the story from Davos:

Microsoft Corp. is developing on an online payment system that will be cheaper than credit card transactions, making it possible for companies to charge small fees for Web-based content and services they now offer for free.

Microsoft Chairman Bill Gates told a breakfast meeting here at the World Economic Forum that he reviewed a plan to enter the online payments business during his “think week,” a twice-yearly ritual where he usually isolates himself in a backwoods cabin to study new ideas.

Gates described a system that would undercut credit card fees, making it profitable for an online newspaper to charge small fees for individual articles, for example.

“If you want to charge somebody $0.10 or $1 a month, that will just be a click…you won’t have to manage some funny thing or pay some big credit charge, where half of it goes to the clearing,” Gates said.

What Mr. Gates describes is a micropayments system rather like Microsoft Points which started out as the popular “currency” of the Xbox Live Marketplace, but since has spread to the Zune Marketplace and general merchandise. Heck, maybe it is Microsoft Points. In any case, the report will give the folks at eBay’s PayPal and Google Checkout something to think about.

Filed under Argo, Bill Gates, Coopetition, Executives, Google, Microsoft, PayPal, Xbox, Zune, eBay

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September 20, 2006

Spruced up Windows Live Expo features PayPal payments

Posted by David Hunter at 8:55 PM ET.

Microsoft’s Windows Live Expo “classified ads with a social networking twist” service was just launched in July, and already there’s an update featuring PayPal payments, improved job listings, new featured advertisments, and more. Team Expo announces the changes at the Windows Live Expo weblog:

We are delighted to announce a new update to the Windows Live Expo service which launched today!

As part of this update we wanted to highlight the following new features:

Integrated payment service: Paypal’s 150 million registered users can now easily reference their account in order to complete secure person-to-person transactions on Windows Live Expo.

New high quality job listings: Expo now allows users to search and browse thousands of local and national job listings which are supplied by our partner CareerBuilder.

Featured ads: The new featured ads area (provided by AdMission) allows you to generate a lot more interest in your listing by offering a fun, rich media experience that highlights your classified listing.

Smarter search results.

Tighter Live Messenger integration.

Apart from the features above, we also focused on performance improvements and increasing our ranking in search engines so that your listings have a better chance of being found on the popular search engines.

Craigslist staked out this space first and Google is there too with Google Base (and Payments), so without the traffic stats it’s hard to judge how a big a threat Expo is. However, eBay has got to be nervous even if they are taking a cut via PayPal. As for the traditional newspapers with their classified ads cash cow, they have already been taking their lumps.

Filed under Advertising, Coopetition, Craigslist, General Business, Google, Microsoft, PayPal, Windows Live, Windows Live Expo, eBay

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September 13, 2006

Yahoo snags Acer while Intuit goes Google

Posted by David Hunter at 8:53 PM ET.

The eyeball auction continues apace as Yahoo signs up Acer:

Yahoo Inc. has signed a multiyear distribution deal to feature its Internet search services on all personal computers from Taiwan’s Acer Inc., the world’s No. 4-ranked computer notebook maker, the companies said on Wednesday.

Acer, which is the top supplier of PC notebooks in Europe and the third-ranked manufacturer in Asia, plans to feature Yahoo as the default way users search on the Microsoft Internet Explorer browser.

The deal, described as a strategic partnership by officials from both companies — with further ties to come — calls for Acer to distribute a co-branded Web browser toolbar and PC start page with Yahoo as the default search service.

Financial terms were not disclosed.

Meanwhile, Jupiter Research’s Joe Wilcox says, “Now Microsoft can worry,” since Google has done a deal with software vendor Intuit that has more meat in it:

Intuit and Google are making a big play for small businesses.

When QuickBooks 2007 hits the shelves later this fall, buyers will also get the Google Desktop, easy access to Google AdWords, and the ability to embed their product listings and physical locations on Google Base and Google Maps, respectively.

While Google CEO Eric Schmidt and Intuit CEO Steve Bennett positioned this as a pairing of best-in-class partners trying to serve customers, many saw it as a pre-emptive assault on Microsoft’s nascent Windows Live and Office Live franchises, which both target small-business customers.

“QuickBooks will integrate several Google services in a way that would help small business make themselves better known. For example, businesses could easily incorporate their info into Google Maps and get $50 credit to be used toward AdWords Listings,” Bennett told reporters and analysts on a call Wednesday afternoon.

The anticipated upside: Google will sell more ads, Intuit will sell more QuickBooks, and small businesses will sell more stuff, the two executives said.

But is it pre-emptive or reactive? You may recall that Microsoft’s Office 2007 Accounting (which competes with QuickBooks) just went into beta with heavy tie-ins to eBay and PayPal.

Filed under Acer, Advertising, Coopetition, General Business, Google, Intuit, Microsoft, Office, Office Accounting, Online Services, PayPal, Yahoo, eBay

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June 29, 2006

Google Checkout checks in

Posted by David Hunter at 10:03 AM ET.

Google today launched Google Checkout and despite the rumors that it was a “PayPal killer,” it’s not really a payment system, but an identity and payment processing system that is available to Google affiliated merchants across the Web to speed customer purchases. Saul Hansell at the NY Times:

The company is introducing Google Checkout today, a service that will allow users to make purchases from online stores using payment and shipping information they keep on file with Google.

Google’s aim, said Eric E. Schmidt, the chief executive, is to make it easier and faster for people to buy products advertised on Google ? thus attracting more advertisers.

“The goal here is to make it be one nanosecond from the time the customer decides to buy to the time the transaction is complete and the product is on the way,” Mr. Schmidt said.

For consumers, this sort of service, often referred to as an online wallet, is hardly new. Microsoft, AOL and Yahoo have offered similar wallets, which proved to have limited appeal. While the PayPal service of eBay has attracted widespread use, it offers additional features like the ability to transfer money from checking accounts.

That is, in addition to identity, PayPal has significant payment features for consumers including a PayPal “account” replenished from a checking account or credit card as well as the ability to write “e-checks” from a regular bank account.

But for merchants, the service comes with a twist: Google will waive some or all of the transaction fees for companies that buy advertising from it. That may give the service a leg up on competitors like PayPal and several smaller companies that help online merchants accept credit cards.

Google is charging merchants 20 cents plus 2 percent of the purchase price to process card transactions, less than most businesses pay for credit card processing. Banking industry executives say that credit card processors typically pay MasterCard and Visa a fee of 30 cents and 1.95 percent for every purchase, so Google will be subsidizing many transactions.

What is more, for every $1 a company spends on search advertising, Google will waive the fees on $10 worth of purchases. Factoring in the 2 percent fee, that represents a rebate of at least 20 percent of advertising spending.

Mr. Schmidt said the company was willing to lose money on transaction fees because it felt the package would increase advertising spending.

Advertisements on from companies that accept Google Checkout will display a small image of a shopping cart. Clicking on the ad will take customers to the advertiser’s Web site, as it does now. When customers decide to buy something, they will be offered the option to sign into Google Checkout and use the credit card and address information on file there. Customers that do not have accounts with Google will be encouraged to set them up.

There’s more in the article including the expected benefit to Google of obtaining more demographic information about Web shoppers in order to better serve ads to them, much like one of the promised benefits of Microsoft’s adCenter. Forrester Research’s Charlotte Li has more on the benefits and summarizes it this way:

So hopefully you’re beginning to see the virtuous circle that Google is building with Checkout and how it supports the core search business. It’s brilliant – by tying the wallet service to search, Google creates a huge incentive for its retail advertisers to participate. This is what differentiates Google Checkout from other wallet services …

Offhand, it looks like Google has pulled an interesting looking rabbit out of the hat. Also notice that Google Checkout is not a beta, but has been fully launched and is ready to rock and roll although admittedly it’s version 1.0 with all that implies. In any case, the bar just got higher for the other big search and commerce players like Microsoft.

Filed under AOL, Advertising, Coopetition, General Business, Google, Microsoft, Online Services, PayPal, Yahoo, eBay

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