Thursday, May 26, 2011

Google Wallet and Google Offers Arrive

[Yes, I know I have been inactive in blogging for a couple of days now. I think I am going through an existentialist phase of blogging: trying to figure out what to focus on and committing myself to posting. Regardless, that phase is no more.]

Now this is some very interesting announcement by Google. As Engadget reports, Google just introduced its Google Wallet and Google Offers services to the whole world today. In short, Google Wallet is a mobile payment service that allows (mainly Android) cell phone users to make payments through their phones. The basic concept is for the cell phone to replace the need to carry credit/debit cards -- allowing people to simply make transactions using their phones. Google Offers is, as its name implies, a "one-deal-a-day" to users who sign up.
I can see both of these services succeeding to advance Google's overall expansion strategy. It is obvious to any astute observer that Google Wallet presents the next step in the integration of Google's Android mobile operating system. Although it is only being implemented in a few cities right now (e.g. New York and San Francisco) and by a few retail partners (e.g. Walgreens, Macy's, Subway, Citibank and MasterCard), the potential to expand quickly is very much a reality. There are millions of Android users right now -- and should only take installing an application to allow this service to work. In other words, a massive user base already exists and it seems Google is simply conducting last-minute troubleshooting before a nationwide release. This is arguably a classic example of corporate synergy being maximized. Given the significant entry barrier of registering users, the only two entities capable of pulling something of this sort off are the carriers (e.g. AT&T and Verizon) or the software makers (e.g. Apple, Microsoft, RIM). Google's Android just happens to be the biggest out there right now.

As for Google Offers, it is obvious this is Google's response to their failed attempt to acquire Groupon. I expect the initial versions to be akin to the (spam) emails I already receive from large retailers: informing me about their upcoming special deals. But I do see Google eventually challenging Groupon in its local/small-business turf by expanding their operations to such an extent to allow direct engagement with local businesses. The only question is how quickly Google is able to move in this increasingly crowded market -- Groupon is already an established player and there is also small competitors. Yet again, there is much synergy of advertising Google can tap into. For example, they can offers incentives for local businesses such as discounts on using their AdWords service.

Overall, both services are leap forwards for the Mountain View (powerhouse of a tech) company. Google Wallet is the more usable of the two right now, but I do see Google Offers as having more long-term potential. We'll keep an eye on this development.

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