Google has aggressively tried to buy its way into the market dominated by eBay’s (EBAY) PayPal service since launching last summer. Google recently reported spending nearly $60 million at the end of last year to promote Checkout, mostly in the form of coupons offered to consumers to give it a spin. In addition, Google cracked open its war chest a bit further to attract retailers by waving all processing fees through the end of 2007.

Google now includes a Checkout icon next to partners’ sponsored search listings which are not-so-subtly intended to influence which ads consumers click on. While a few name brand retailers have signed on, most of those teaming with Checkout have been small retailers that are largely dependent on search traffic.

For all its marketing muscle, Google has yet to make a compelling case to consumers as to why Checkout is even needed. Rival PayPal rocketed to success a decade ago by solving the problem of transferring money securely and conveniently between parties online, particularly on eBay.

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Posted: 04|25|07 at 9:41 am. Filed under: UK News.