June 30, 2006, 12:00 AM

Conversion rates will be key to Google Checkout’s success

Google`s new payment service Google Checkout sounds promising, but the proof of success will lie in conversion rates, says John Bresee, president of Backcountry.com. “Conversion is the king of our business,” he says.

Kurt Peters

Executive Editor

Google`s new payment service Google Checkout sounds promising, but the proof of success will lie in conversion rates, says John Bresee, president of Backcountry.com.

Google this week unveiled a new universal checkout service, under which consumers register their shipping and billing preferences with Google, then can use the Google checkout service at multiple retail sites. Google charges merchants 2% plus 20 cents per transaction.

The service also works with AdWords, Google’s search advertising program, allowing merchants to acquire new customers and process all or a portion of their Google Checkout sales at no charge.

Backcountry.com, No. 150 in the Internet Retailer Top 500 Guide to Retail Web Sites, went live with Google Checkout at 3 a.m. Thursday, the day of its official launch.

“Google has time and again shown that they know how to build a better mousetrap,” Bresee says. “While we think we’re pretty good at e-commerce, we don’t have such hubris that we aren’t willing to always learn from Google. They’ve proven their genius.”

But to run a successful e-commerce operation is difficult, Bresee says. “Understanding the whimsical ways of customers is hard,” he says. “While Google may understand search, it remains to be seen whether they understand consumer behavior.”

And although the prospect of lower advertising costs and low or no-cost processing of credit card transactions may persuade retailers to try Google Checkout, conversion rates will be the decisive factor in whether merchants continue to offer the service, Bresee says.

“Conversion is the king of our business,” he says. “It’s a good idea if it converts. It’s a bad idea if it doesn’t.”

More than 90 retailers have signed on with Google Checkout since its launch, including DVD Empire, Jockey, Starbuck’s, Levi’s, Timberland and Buy.com.

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