Google Exec On Google Checkout: “I Don’t Know That We Failed Fast Enough”

Written by Evan Schuman
June 15th, 2011

As Google is making the industry’s most substantial push into mobile payments, it’s admitting key “naïve” errors with its last major retail push, Google Checkout. That older effort is now being allowed to stagnate through a starvation of marketing and engineering resources, according to a Google executive this week.

Her comments come on the heels of our report last week that the elimination of the Google AdWords badges for Google Checkout likely meant the beginning of the end for the alternative payment system. The executive shall remain nameless for the moment because, well, there’s already too much unemployment in this country.

Asked if Google Checkout will be killed or whether it will simply get a lot quieter, the exec laughed and said that, in recent years, “we’ve spent zero time on marketing [Google Checkout] and zero dollars on consumer awareness. I don’t know how much quieter we can get.”

By Google’s typical market domination standards, Google Checkout has fared poorly over the years, never able to get key retailers to prefer it to PayPal, BillMeLater or other payment alternatives. The exec added, though, that “tens of thousands of merchants use Checkout,” which—for many companies—would be not a bad showing.

Checkout had challenges from the beginning, with surveys in 2007 placing it a distant third behind eBay’s PayPal and BillMeLater (which would later also be owned by PayPal, after an initial investment from Amazon). By early 2009, it was being used by a handful of major chains, including PetSmart, RadioShack, Sports Authority, Zale’s, Dick’s Sporting Goods, Rite-Aid and ToysRUs, plus the National Hockey League. It won—and then lost—Sharper Image, CompUSA and MTV.

In early 2009, Google tried to adjust its pricing to attract more large retailers, to no avail.

The senior Google-ite said that Checkout was likely doomed by some ill-advised decisions early on, especially those involving major chains. “The initial failing was the decision to go after the big merchant, to argue to them that the landing page should be on Google instead of” the retailer’s own site, the exec said. “You can’t tell [major retailers] that the user experience is more important than the merchant site. They’re never going to agree to that.” She added that Google was “naïve about large retailers at the time.”

Google is certainly a philosophically oriented company, bordering on Zen-like. (OK, maybe a cross between Klingon and Zen. The company will enjoy killing you, but it will meditate afterwards.) A key part of Google’s corporate philosophy has been “fail fast,” which means attacking projects with gusto to quickly determine if it will work. If it doesn’t, the effort is theoretically abandoned. Added the exec: “I don’t know that we failed fast enough” with Google Checkout.

In the early days—when it was making that unfortunate large retailer pitch—Google Checkout was a priority. “When Google Checkout was launched, it had lots of hours of engineering and very little return. In fact, it was a negative return” and it required more retail effort than it should have (“it needs to be simple to adopt”), the exec said. “Consumers didn’t know what it was.”

Google doesn’t typically kill many products as much as it repurposes much of the product’s code, resources (engineers, primarily) and learnings and then applies them to other Google services. Some of Google Checkout has been reincarnated in Google Wallet, for example.

Google isn’t alone in finding itself having to rethink early decisions about its retail alternative payment strategy. Bling Nation has shut down its contactless sticker business in “a bid to stay competitive by rolling out a revamped product later this year,” according to report in The American Banker. “We found it was easier to kind of pause and fix [our business model] than to try to tweak and market,” the publication quoted Matthew Murphy, a Bling Nation general manager, as saying.

The Bling retail misstep, according to The American Banker story, “involved launching the loyalty program FanConnect last fall and requiring that banks and merchants on its network become part of it.”

In its new Google Wallet push, Google seems to have done a much better job of understanding what retailers want and need. Two huge hurdles remain, though. Will retailers invest quickly and heavily enough? And will consumers support those retailers? Failing fast may be a lot better than failing slowly, but failing as part of a large group doesn’t lessen the pain much. Misery loves company. Losses are preferably standalone.


Comments are closed.


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.