Google's Gbuy nears launch

Google's online payment system, Gbuy, is expected to launch June 28, further pitting the Internet giant against industry titan and rival eBay, according to a research note released Friday by a Wall Street analyst.

Gbuy is expected to be free during the initial phase, but merchants may eventually be charged a 1.5 percent to 2 percent per-transaction fee, Jordan Rohan, an RBC Capital Markets analyst, said in his research note. A fee of that size would be slightly less than that charged by eBay's online payment system, PayPal.

Google was not immediately available to comment.

"The brilliance of Google's Gbuy merchant-to-consumer payment platform lies in what Google may do with the transactional data it captures from the thousands of merchants that may ultimately offer Gbuy," Rohan said.

Google is able to gather the data when users click on a merchant's Gbuy feature. Consumers are then transferred to Google's Gbuy site, where they complete the transaction.

Google's payment system, as a result, holds the potential to monitor which paid-search results users click on and of that group, which ones turn into actual sales. With that information, Google may find itself in the enviable position of being able to identify which categories bring in the highest return on investment for advertisers, Rohan stated.

But Derek Brown, an analyst at Pacific Growth Equities, cites other reasons why the data may prove valuable to Google.

The data could provide useful guidance on where to place its sponsored links, in order to generate higher traffic, as well as give greater insight into the buying habits of its users. And that, as a result, may prompt the Internet titan to deliver targeted ads to those users, Brown said.

Some merchants, however, may fear that Google would use this information to deactivate keywords and then require a merchant to pay a higher minimum bid to reactivate the keyword, Rohan said.

But merchants may find the lure of having the Gbuy logo next to their sponsored search link too appealing to pass up, even if it potentially means giving Google a closer view into their business, Rohan noted in his research note.

"From the merchant's perspective, the placement of a Gbuy logo and the designation as a 'trusted Gbuy merchant' will be a point of distinction and theoretically raise conversion rates and traffic," Rohan states in his research report.

Merchants who are already involved in Google's Gbuy beta test are set for a June 28 launch, but those who are new to the program can expect an implementation period of six to eight weeks, the report states.

Yahoo Video to compete with Google and YouTube

Yahoo is taking on Google and start-up YouTube with a service that allows users to upload and share their videos.

Yahoo Video, launched on Thursday, will compete directly with Google Video but will initially earn revenues only from advertisements placed on its pages.

Google’s service charges users to view some videos provided by media companies.

YouTube has popularised the uploading of home videos and TV and movie clips, becoming the fourth-largest social networking site worldwide.

It had some 38m unique visitors in April, up 1,200 per cent over six months, according to the comScore research firm.

Yahoo has lagged behind its rivals, although it has offered a video search service since December 2004 and has delivered music videos over its Launch service now renamed Yahoo Music.

Yahoo Video will incorporate the search feature and will find videos on Yahoo Music. It will also show results from across the web as well as videos uploaded to its own servers by users through a new service called Yahoo Studio.

The company said it would stand out from its competitors in also being able to offer content created by its internal media group and direct feeds from partners such as HBO, Viacom and Warner Brothers.

Yahoo is also emphasising social networking features – users will be able to rate content and tag it with labels, create favourites lists and share them with other users.

Content can be shared via its Yahoo Mail and Yahoo Messenger programs and videos can be made to play from inside users’ own personal web pages.

“We’re combining core search with personal interactions to improve results,” says Jason Zajac, general manager of social media.

“As the video space continues to emerge, our strengths in search, content, personalisation and community make it possible for Yahoo to offer a highly engaging video experience for both users and publishers.”

Full integration with Yahoo’s other social networking tools will not be immediately available.

It has acquired a number of “Web 2.0” companies, including the photo-sharing site Flickr, tagging site del.icio.us and events service upcoming.org.