It appears that the Google brain trust is now looking to capitalize on its huge stock price by getting into other forms of revenue generation. This company, literally, has a license to print money thanks to the huge profits it's making from its Adsense technology. In fact, everything related to web searching brings cash to the its shareholders. However, if you think these guys are sitting on their behinds resting on their laurels, just take a quick peek at their other business experiments.
PayPal, the web's biggest online payment solution, had 4th quarter revenues of US $304 million. Remember, this is just in one quarter. Now don't forget that eBay, the Internet's biggest online marketplace, owns PayPal. Its 4th quarter revenues last year were a whopping US $1.3 billion. Again, this is nothing to sneeze at, and I suspect those brilliant PhD geeks at Google decided that they needed to get a bite of this lucrative cash cow, too. And who can blame them?
For those in the know, PayPal has been having some legal issues over the years. I guess when you have 96 million account holders, that's to be expected. But another issue that really annoys its online merchants is the fact that the company is joined to the hips with eBay.
Give credit where credit is due
All I can say is that PayPal deserves a lot of credit for truly making online payments simple and secure for the average mom and pop eCommerce customer. I will never forget their elegant solution that enabled regular entrepreneurs to earn a living in cyber space. For example, whenever I needed to pay my graphics artist in South Carolina, all I did was log into my PayPal account, transfer some cash from my President's Choice checking account at the press of a button, and then create a transaction via PayPal to settle the debt. This is brilliant!
Room for improvement: What about Africa?
What I'm hoping GBuy will do is provide a seamless ePayment solution for the African marketplace. Speaking to business owners here in Nairobi (Kenya), they are really ticked off that PayPal has totally ignored this region. In this case, competition is good for business, so let the chips fall where they may.
For example, Sam Mundia, a local Nairobi businessman, and owner of ShareaMovie.com is scrambling to find an online payment solution for his next upcoming web venture, which will be a first of its kind in the entire region. However, he stated that he will have to look to the United Kingdom to open a local bank account so that he can accept payments via PayPal . This, according to him, is "an inconvenience."
By the way, Google just added chat capabilities right inside GMail's contacts list, which means I don't have to go and install yet another IM chat application. This has huge implications that will have Yahoo and Microsoft looking over their shoulders - again. It's this kind of innovation that makes me believe Google could do some wonderful things with GBuy. Hopefully they don't make me look bad, but ya heard it here first. :-)
To conclude, the news of GBuy coming soon to an online store near you is great for the Internet since competition will, ultimately, lower transaction fees and also bring new innovation to the table. Hopefully it will also provide more opportunities for web merchants in places like East Africa (Kenya, Uganda, Rwanda, Tanzania) who have products and services to sell online, but are held back by ePayment options - perhaps due to Western ignorance.
All I can say is, "enjoy the ride."
- PayPal Prepares For a Challenge From Google (Wall Street Journal)
- The Big Guns' Next Target: eBay (Google and Microsoft eyeing eBay's lucrative auctions)
- "Taking PayPal To Court"
- More Legal Troubles on PayPal's Horizon?
- PayPal Confident in Meeting Regulatory Challenges
- New York Attorney General Tells PayPal to Pay Up
- Payment Options for Online Shoppers
- Online payment options (Australian Consumers' Association)
- The Pre-paid System: An Alternative E-Payment Solution For Africa? (view as HTML | MS-Word doc)
- Payments Association of South Africa (PASA has the responsibility to manage the South African payment clearing system)