Google Checkout Promotions Cost $58 Million Last Year

Nathan has uncovered the dollar amount Google spent in rapidly gain market share in an industry that is currently dominated by just one main player? Bargain! Think about how much Google is saving in traditional marketing and advertising costs, by recruiting merchants to do their advertising for them. Every time a merchant uses Google Checkout - which they can do for free until the end of the year - they’re telling their customers about an alternative to PayPal and traditional credit card options. Why spend hundreds of millions on advertising, when you can get the merchants to do the hard work for you? And, once those merchants take the time to set up Google Checkout, integrate it with their shopping cart, add logos to their site, etc., they’ll likely stay with Google beyond 2007, so long as the transaction fees are competitive (or cheaper than) PayPal or their merchant account.

Of course, the proof is in the pudding. We won’t know how much of a smart move this is, until we see Google Checkout’s market share at the end of 2007.