Google announced it is extending its promotion for Google Checkout for another year. The checkout service, used by online merchants to process payments from customers, launched in June with lower fees than PayPal's payment service, as well as an incentive for those merchants using Google AdWords. In early November, Google announced that from November 8 through December 31, 2006, Google would process all Checkout transactions for free, and today, it extended the promotion through December 31, 2007.

ChannelAdvisor CEO Scot Wingo, whose company provides online merchants and eBay sellers with ecommerce and auction-management services, said of Google's promotion, "This is huge from a merchant's perspective as this essentially drops 2% into their pockets they can either, well, pocket or pump back into Google Adwords" (http://ebaystrategies.blogs.com/ebay_strategies/2006/12/google_checkout.html). However, eBay does not allow its sellers to request payment through Google Checkout. eBay owns PayPal, a competing online payment service.

There have been reports of some buyers and sellers experiencing problems with Google Checkout, however, as reported by Elise Ackerman of the Mercury News on November 28 (http://www.siliconvalley.com/mld/siliconvalley/news/local/16114729.htm).

A Google spokesperson said today in an email, "The Checkout team spends a lot of time evaluating merchant feedback and working to make Checkout as effective as possible, and in recent weeks we've announced several new features and initiatives that should make life even easier for online merchants, including the ability to create coupons for and send email invoices to customers, a simplified HTML-based option for integrating Checkout into their sites, and an extension of our free transaction processing promotion through December 31, 2007."

Both Google and PayPal offered promotions for holiday shoppers as another incentive for merchants.

Scott Devitt, an analyst with Stifel Nicolaus, said today in a research note of Google's extended promotion, "We think, if it works, it is potentially very disruptive to competition and materially beneficial to Google's core Adwords business."

https://checkout.google.com/seller/freetransactions.html