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Google Checkout a Cost-Per-Action Model?

After months of rumors and reports, Google today launched Google Checkout, which enables shoppers to purchase items securely from participating stores with a single Google login.

Shoppers who want to use Google Checkout have to create a login or use their existing Google login. For user privacy, the service will also conceal a buyer's credit card number and e-mail address from the vendor.

Stores that accept Google Checkout will have an icon on next to their AdWords advertisements.

AdWords merchants can use the product to process all or a portion of their checkout sales for free, according to the company.

Analysts say the move will help keep Google's search revenues growing by making it more likely searchers will convert into customers, thus making their clicks more valuable.

That little icon is going to mean a lot more business for Google, Forrester Analyst Charlene Li told internetnews.com.

"It drives even more marketers to want to use Google AdWords because that's going to signal to consumers that this is going to be an easy checkout process.

"And if it's a vendor they've never heard of, [consumers] will be assured that the process will be easy and the transaction secure," Li said.

Li said Google Checkout will also help vendors cut down on abandoned shopping carts.

That helps Google, Li said.

"If Google can help them increase their conversion rate, they'll say now that each person who searches is worth more and spends more on search itself."

Some of Google's search rivals, including the recently re-launched Snap.com, tie their revenues even closer to vendor conversion rates by charging them only per sale or per-action.

Li thinks Checkout may enable Google to get there, too.

"They already offer a few things by cost-per-action, but the problem has always been closing the loop," she said. Here they can actually absolutely close the loop."



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