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When I first saw the announcement, I went to the signed, clicked on Information for sellers, then Learn more

On the top right-hand corner of the “Learn more” page (after 2 clicks!) is a box with “Top 5 Questions”, the third of which is “I’m not based in the United States. Can I process transactions through Google Checkout?”. The answer? “At this time, only merchants with a U.S. address and bank account can process transactions through Google Checkout. We look forward to offering more options in the future.”

I meant to say that I went to the site immediately after seeing the announcement, which I received from the Google PR machine yesterday evening.

More patient!? Would you be more patient if Microsoft or IBM released a new product and—for some mysterious reason—only sold it to US residents? Even uniformed users would be able to guess that Google has the expertise and cash to be able to handle an international roll out. It’s been done before by companies with much fewer resources.

I would guess that problems with Checkout relate to legal and regulatory issues. Would it not be useful for the Great Google to inform us as to the reason why Checkout is available only in the US? Would it be nice to have a clue as to when Checkout would be available elsewhere? Would one expect an international release for the only Google product (it seems) that is not in beta?

Therein lies the rub. Provision of any useful information would fly in the face of Google’s secrecy policy: “We will release no information until it is absolutely necessary, and then we won’t release it, so stuff it.” This secrecy policy was spawned as a means to protect it’s now pathetic search algorithms developed during Google’s early days.

This brings us to a few interesting parallels with Microsoft. Microsoft and Google grew rapidly after founding. Each had a culture which uniquely supported strategy; however, today, each retains their original culture despite the fact that these cultures are now dysfunctional. In the case of Microsoft, their early culture was one of an arrogant belief that the rules that applied to other giants, (IBM, etc.) did no apply to them. Google developed a culture of secrecy born out of the necessity to keep their algorithms secret. These cultures no longer support company success.

Secondly Checkout also provides clear insight into Google strategy in comparison with that developed by Bill Gates in the 1990’s. In the 1990’s Gates became determined to own the piece of the PC value chain between hardware and software. He sought to control hardware (from Intel) and software (in the form of Office and IE) primarily as a means to monopolize the PC operating system while using monopoly power to eliminate competition on the OS arena. This seems obvious until one recalls that vendors focused exclusively on either hardware and/or software during the early days of the PC.

Similarly, Google wants to own the Internet experience but not the end destinations themselves nor the means by which users access the Internet. Many companies have failed to do this because they focused on real estate instead of services. Yahoo, and to a certain extent, AOL , have been the only companies to become marginally successful at cultivating user base by providing a home page from which the user can access other useful pages.

Google, on the other hand, understands that the web experience is based more on “doing” rather than “visiting.” Thus, Checkout and other services (Gmail, Google News, Google Talk, etc.) are designed to monopolize what the user does during Internet experience. These services, as Cringely points out, are designed around Google’s core competencies, including massive server space and distributed computing.

Lastly, Google’s move into new services comes at a cost of support for the services upon which the company was founded. Google search now stinks with spam. Interestingly, Google seems to have been able to do little about this. Could this be because Google relied extensively on existing research to form its vaunted search algorithms? Are the “smart heads” at Google unable to produce better algorithms than those originally produced in academia, or does Google just not care that its algorithms are seriously out of date? Message to Google: survival on the web (as was true for Alta Vista) is predicated on updating ahead of the times. In a similar vein, Microsoft has allowed important products, such as IE, to languish while chasing new ones.

Wow, this is a long rant. It seems I’ve had some prognostication constipation. Perhaps it’s a good thing I cannot figure out how to link my name above with my home page. I might suffer the ever dreaded Google de-listing ;-)

Believe it or don’t, the above brought me to a few more conclusions of the useful variety. Neither Microsoft nor Google are essentially software development companies. Both have acquired or borrowed from their earliest days. I had hitherto thought this was simply a matter of core competencies. Remember Bob? We have all seen how bad Microsoft is at developing end user software.

What I had missed is that the value of software acquisition lies in the free market research. This is especially for a type of software that is growing in popularity. Google or Microsoft can look for a type of software or service that appears to be growing in popularity at an early stage. Then, the company uses a set of criteria to select an attractive company that provides software in that arena. Microsoft or Google can then close the deal by informing the target that its category will be killed by the giant no matter what. Hence, we have seen cash rich Google acquire companies for far less than we would have expected.

Thus, we can see Google as an acquisition company seeking to own the central aspect of the Internet value chain:

User Internet Access >> Internet Services >> End Destinations

Google strategy is to own any popular services between access and destinations. Note that “end destinations” do not consist of only web sites. Google understands that Internet end destinations also consist of email, chat, content, etc.

Google’s mission and strategy provide important lessons for entrepreneurs. Firstly, Google may not be interested in the coolest technology because Google is looking for a tested market rather than specific technology. Secondly, entrepreneurs can maximize profits in at least one of two ways. They can create a product that is proprietary (as in Google search), or they can run under the radar until a solid user base has been developed (as was the case with Visio and Microsoft). Creating the best “me too” product is not a sure way to success because Google has tremendous leverage where alternatives exist.

The third lesson involves the types of products in which Google may be interested. There is much talk about Google “killing” Microsoft with an online office suite. Google has acquired some office products; however, we wonder why Google is not pushing these aggressively. The reason may be that Google merely wants to own these as insurance should users begin to use online office products. Thus, Google needs to produce an office product only if Microsoft or another company comes to the table with a product that threatens to draw users.

It’s not entirely Google’s fault. The two big credit card companies Visa and MasterCard set the rules. All web based merchants are considered high-risk. It doesn’t matter whether someone sells tea or hardcore porn online.

And then there is the problem that a payment processor has to sign contracts with numerous local Visa and MasterCard companies. E.g. a contract with Visa USA does not give you permission to process payments for Europeans. It’s a battlefield with a lot of mines in the ground from the pre-Internet era.

Guan, I finally discovered what you pointed out, thanks for pointing it out. It should be more obvious though. Also when I tried to sign up for it via my AdWords account they should have recognized immediately that I have a Danish account.

Will, It’s funny that I am actually less worried about Google now than I was last year. From what I can see they are definitely having some level of growing pains and they can mainly compete on name and dollar at the moment.

When Google bought Writely, should I have been worried? After all I am a purveyor of a competitive service WideWord. Writely I am sure is a fine service (not that I have tried it) and probably has many more features than WideWord does, but I think WideWord is a lot more innovative than Writely in the way people work and collaborate on documents. It is much more similar to traditional document collaboration workflow and I have received lots of very positive feedback because of this.

I have also discovered that it is used in unlikely places, such as larger companies (I wrote it for small businesses like my own). This is primarily due to the security aspects of it. Several people have told me that would not normally be able to use a hosted service like Writely, but that WideWord was deemed secure enough.

I think that Google have to some extent lost their steam, but I don’t in anyway propose that they have lost it for good. I just don’t think we will see too much innovation coming from them. Checkout did look like an interesting innovative concept but it looks to me like the lawyers have removed much of the potential innovation from it.

Stephan, I know from my own experiences only too well of the difficulties payment processors face. Paypal and several other services have solved this problem. You would also imagine that someone like Google would have the potential muscle to press things through that small startups would have difficulties with.

It sounds more to me like the lawyers had a bit too much control over this service.

Pelle, I’m not afraid of Google; I just think they are lame. They built the company on a search algorithm that was heavily based on existing research. That algorithm allowed them to destroy Altavista and others because those search engines had become a haven for spam.

Now, Google has tons of cash, and we are supposed to be impressed by how difficult is to get hired by Google; nevertheless, Google search is nearly as bad as Altavista’s was. With its massive resources, I wonder why Google cannot or will not do any better. This is also true of Checkout.

Similarly, their obsession with secrecy served them well while their search algorithms were the royal (and only) jewels; however, times have changed. Their obsession with secrecy means that customer service is a nightmare. Google secrecy provides a cloak behind which company policy need not be explained. Secrecy also allows Google to maintain appearances of impartiality while favoring pet political causes.

I’m not afraid. I’m just not impressed, and the issues around Checkout have given me a much better insight into where Google will be going.

Go to www.google.com. Click on ‘more >>’ rather than searching. View the ensuing fragments of offerings. Other than charging for targeted ads, I think they’ve stumbled on to something here. There’s this thing called eCommerce and an incredibly vast number of consumers use Google’s search tool to buy elsewhere. They want those lost dollars. I’m sure in the next version they’ll go after those lost pesos, drachmas, rupees, or even doubloons as well.

I’ll be much more impressed with Google when they start amassing large numbers of patents. Until then I’ll find my enjoymentment playing Google Whack http://www.googlewhack.com/

How sad for google, they won’t be receiving our business!