Monday, March 3, 2008

The Google Checkout Effect

With the drop in Google's stock price over the past few months the question of how much Google Checkout could help the results next quarter comes to mind. After all, Google was literally giving it away for free for the past year, and it was one hell of a expensive promotion from the sounds of it!

Google stated that as of December 2007 they had signed up over 100,000 merchants and millions of users. Starting at the beginning of February Google began charging 2% + $0.20 per transaction. Just think of all that revenue that will now be added, instead of subtracted from Google's bottom line. These figures of course will continue to grow as more and more merchants see the benefits of signing up for Google Checkout.

Just listen to these statistics, Google says web shoppers who’ve signed up for Checkout are 10 percent more likely to click on an ad that features a Checkout button and 40 percent more likely to make an online purchase once they reach a site. In other words, if an online retailer uses Checkout and spends ad dollars on Google (GOOG), it improves the chance that shoppers will make purchases on it's site. These kind of stats are what will not only help retain Google's advertisers, but gain even more. Plus, have we already forgotten about the Yahoo disaster and how it will effect Google Checkout?

Is that enough reason to be bullish on Google? That is up to you to decide, but I think that Google is a global growth story that has really just gotten started. As the demand for instant information across the world drives their growth we will begin to see the true potential of one of the best long term stock picks out there.

One of the benefits of being a long term investor is the ability to focus on the future, especially in markets like these. If I wouldn't have been in certain stocks before this whole subprime meltdown started I wouldn't be able to identify these stocks as potential buys at these levels. Just because the entire market drags everything down doesn't necessarily mean these stock deserved to go down. Are companies like Google done growing their businesses, or is this just a readjustment of risk...

Want more Google? Check out this post...

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