In Its Latest Offer for Checkout, Google Entices New Users With Bonus

Google Inc. is paying new customers of its Google Checkout $10 to sign up for the service under a promotion launched this month and scheduled to run through Feb. 15. The promotion represents the latest in a number of marketing efforts for both merchants and consumers the Mountain View, Calif.-based search-engine giant has put behind its online payment service since launching it last June. Google is promoting this latest offer on its heavily visited main Web page, where many people start online searches. After registering their e-mail, payment card, and shipping data with Google Checkout, new users can spend their so-called $10 bonus at an undisclosed number of participating merchants. Some of the 15 listed Google's Web site include RitzCamera.com, Jockey.com, Starbucks' online store, Ace Hardware, and Dick's Sporting Goods. The bonuses are limited to one per buyer and must be spent by March 31. This latest enticement comes on the heels of a holiday promotion that offered consumers $10 off purchases of $300 or $20 off $500 purchases at a “significant” number of participating merchants, a Google spokesperson tells Digital Transactions News. Earlier, Google offered merchants free payment processing for a time, a promotion Google has extended through all of 2007 (Digital Transactions News, Dec. 6, 2006). Some analysts wonder whether all the promotions indicate Google is not getting the traction it hoped for with Checkout as it competes in a brutal online-payment marketplace dominated by Visa USA, MasterCard Worldwide, and eBay Inc.'s PayPal. The spokesperson insists otherwise. “It's really not a question of numbers running behind,” he says, adding that “millions of consumers” are using Checkout and “thousands” of merchants are participating “Our momentum has been pretty unbelievable in the past few months.” Google refuses to disclose specific numbers about Checkout. If one analyst's view of Google's tactics is on target, expect to see a steady stream of promotions aimed at Checkout's two major constituencies?merchants and consumers. “Consumers will be reluctant to use Google Checkout unless it is accepted at most locations,” Tim Sloane, director of the debit advisory service at Waltham, Mass.-based Mercator Advisory Service, tells Digital Transactions News via e-mail. “By offering consumers a $10 signing bonus, Google will be able to tell merchants that there are a large number of consumers ready to buy goods using Google Checkout. If merchants then adopt Google Checkout, you drive a feedback loop, in that more consumers then see Google Checkout where they shop and are more inclined to become a Google Checkout user.” Sloane likens the $10 offer to a 0% introductory interest rate on a credit card solicitation. “Both are a high-risk investment designed to capture future consumer spending,” he says. Google likely will win if the consumer takes the time to enter the data Checkout requests, since doing so represents the start of a “significant relationship” that the consumer will not readily end, he adds.