Google to eBay, Apple, Dell, Amazon: Ecommerce is a 'disaster'

Google to eBay, Apple, Dell, Amazon: Ecommerce is a 'disaster'

Summary: Google gives a firm thumbs down to the payment processing systems used by its strategic partners, by its key advertising clients and even by a company where the Google CEO is a member of the Board of Directors.

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TOPICS: Google
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DMM62006GC.jpgGoogle gives a firm thumbs down to the payment processing systems used by its strategic partners, by its key advertising clients and even by a company where the Google CEO is a member of the Board of Directors.

The Google-centric view of the world does not always reflect the world’s reality. In touting Google’s latest underperforming initiative, Google Checkout (see “Google miscalculates with Google Checkout”), at an investor Q & A in New York City yesterday, Alan Eustace, Google SVP Engineering & Research, characterized payment right now on the Web as a “disaster.”

While Google CEO Eric Schmidt is fond of saying “don’t bet against the Internet,” the company appears to be betting against payment systems widely used on the Internet.

In a fear-mongering diatribe trashing online commerce and casting doubt on consumer financial safety online, Eustace disparaged ecommerce players on the Web:

Payment right now on the Web is a disaster. Everybody who has ever tried to buy anything on the Web right now, you don’t know who the person who is selling the goods are, you have to input your credit card to a thousand different places out there, who knows what those people are doing with my credit card. It takes a long time to get through a transaction process, honestly if it took as long for you to get through the checkout at your supermarket, as it takes to do an ecommerce transaction right now you may never do it.

Especially when the prices of items are very low. Things like videos, 99 cents and things like that, you are not going to go through a full transaction cycle as a consumer to do that kind of thing.

Also there’s Privacy issues here, you may not want to give your information to all those different places.

It is striking that Google talks publicly in a manner that suggests ignorance about online commerce. Ecommerce, of course, is thriving on the Web, thanks in large part to key strategic partners to Google, to Google key advertising clients and to a company where the Google CEO sits on the Board of Directors.

eBay CEO Meg Whitman, Amazon CEO Jeff Bezos, Dell CEO Kevin Rollins and Apple CEO Steve Jobs are sure to take exception with Google’s declaring “Payment right now on the Web is a disaster”:

  • $5 billion ecommerce player eBay: Google strategic partner and key advertiser account
  • $9 billion ecommerce player Amazon: Google key advertiser account
  • $57 billion ecommerce player Dell: Google strategic partner and key advertiser account
  • $18 billion ecommerce player Apple: Google CEO member of Board of Directors and key advertiser account

Google’s wanton public disrespect for ecommerce facts and its ecommerce partners ought to give pause to any company and any individual that does business with Google or uses Google services.

If Google can not be trusted to accurately portray industries in which it seeks to do business (all the industries of the world), how can it be trusted to accurately account for click fraud, data records, search query streams…

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5 comments
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  • sorry Donna .... it is a disaster !...

    Sometimes it takes an honest critique to expose the facts and drive improvement. The big numbers you base you challenge upon are purely an indicator of the potential and importance of internet commerce, not a proof of present adequacy. The fact is that the financial industry still has not caught up with the net in providing adequate customer interface.

    I consider that Google understand some of the need for change and opportunity very well. They also have strategy and capability which is going to be quite significant.
    johnhnz@...
  • My apologies for the word "disaster"

    Donna,

    I appreciate your feedback on my comments at the Citigroup meeting. You are absolutely correct that EBay, Apple, Dell, Amazon and many others have great checkout experiences, but the problem is that there are tens of thousands of sites with great products to sell that do not have the resources to do this well, and there are millions of potential consumers that dread spending money on those sites because they don't want to put up with the hassle of getting a user account, giving up their email address, filling out yet another web form with the same information as the last form, and handing a random website their personal credit card information, with no guarantees of a legitimate business on the other side of the transaction. This is definitely not a good user experience.

    I've bought items at EBay, Amazon, Dell, and Apple, and had great user experiences every time. I love these companies, and their products, but that doesn't stop me from hoping for a world where I never have to fill out another web form, and the checkout process takes less than 10 seconds, regardless of where I shop. I'd also love to have a single place where I can update my credit card expiration date, or change my shipping address. Google Checkout gives me that.

    Ecommerce is not a "disaster". That was too strong a word, and you are completely correct to call me on it, but I'm sure that you would agree that the current system isn't efficient for either businesses or consumers. It may not be a "disaster", but I think you'll agree that there is room for improvement.

    Alan Eustace
    Sr. VP of Engineering and Research
    Google, Inc.
    alaneustace@...
    • Sales Pitch and Nothing More

      Google is a wonderful resource which has helped transform most users internet experience, but for Google to start leveraging such a position to dismiss other solutions providers is simply unnacceptable.

      You can't make a serious analytical point about the standard of eCommerce services currently in service when it is wrapped up in a sales pitch for Google's own service. That just doesn't wash.

      The tacit summation of your reply here is that a majority of eCommerce solutions and checkouts are inherently unsafe, complicated and unusable. I'm sorry but in most cases that's just not true.

      The whole payments industry is committed to fast user-friendly and secure payment processing, it is mandated by their acquiring banking partners and essential to maximising end-user sales volume - so what you criticise is actually a no-brainer to the industry and our meat and drink.

      It's simply not true to suggest that there is no guarantee of a legitimate business on the other side of a checkout, if you think otherwise perhaps you should speak to Visa, MasterCard or any of their banking partners to understand the extensive compliance operations which take place.

      I don't particularly like the Paypal service for reasons which you have not mentioned, but your comments seem to be implicitly critical of them when Google's service is ultimately going to be of the same format.

      The truth is that the only valid distinction you are drawing into your response is that of the confidence inspired by the visible Google name over and above the faceless checkouts you portray as so un-trustworthy and un-reliable.

      But what serious businesses actually want is their own integrated payment solution, analagous to the eBay, Amazon, Dell and Apple experiences that you mention. True Payment Service Providers have been providing this for many years and Google will not.

      I haven't seen this in the context of the original webcast, but sadly I find your reply an offensive manipulation of public opinion, aimed at damaging confidence in eCommerce to sell your solution, rather than examining the real issues which exist.

      The minute Google adopt a 'we are right because we are Google' attitude to scare-monger business out of other markets, the crown slips. Some of your points may be valid for hobbyist and startup SME's but for the majority they are not, and they do the payments industry a *tremendous* disservice.

      Rob Fernandes
      RobFernandes
  • Digital Gold Currency

    Alan Eustace..."you have to input your credit card to a thousand different places out there, who knows what those people are doing with my credit card."

    Digital Gold Currency....no credit card or credit information is ever needed. No bank account or banking information needed. If you never in your life had a CC or US bank account...No Problem you can very effectively use e-gold.com or pecunix.com as merchant or consumer. Instant set up.

    Alan Eustace..."It takes a long time to get through a transaction process, honestly if it took as long for you to get through the checkout at your supermarket"

    Digital Gold Currency...All transactions are instant. There is no settlement period, the funds are clear in your account instantly. All transactions are non reversible which means no charge backs or fraud. Get paid and stay paid.

    Alan Eustace...Especially when the prices of items are very low. Things like videos, 99 cents and things like that, you are not going to go through a full transaction cycle as a consumer to do that kind of thing.

    Digital Gold Currency...On small items, a digital gold currency is an excellent way to pay or be paid. DGC offers transactions as low as .01 without the huge transaction fee. Settlement is instant, no waiting.

    Here is a quick comparison:
    A PayPal payment coming from a US account to another US user and based on the PayPal Standard Rate (2.9% + $0.30)*

    A business receiving a $1.00 sale payment is be charged a PayPal fee of .33$ and the merchant would only receive .67$ net to their account.
    An e-gold,com transaction using the same options (Spend Fees 5% + AUG 0.0002)**

    The e-gold merchant receiving this same sales transaction in a $1.00 e-gold payment would only be charged a transaction fee in e-gold .05$ and would net a total of .95$

    *http://www.ppcalc.com/
    **http://www.e-gold.com/unsecure/fees.htm

    Alan Eustace... Also there?s Privacy issues here, you may not want to give your information to all those different places.

    Digital Gold Currency...NO personal information is ever needed to complete a digital gold currency transaction. The only items ever showing buyer and seller is the account number and name and the amount of the transfer. Buyers never take a risk losing any personal info.
    Mark Herpel
    mgmt@gold-companies.com
    goldcomp
  • RE: Google to eBay, Apple, Dell, Amazon: Ecommerce is a 'disaster'

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