Google Checkout recently launched in the UK and I wanted to share some statistics about the take up so far in the US where Google Checkout has been available for just less than a year and in the UK where it has just launched.

The following chart shows the monthly market share of US Internet visits to Google Checkout since its launch in June 2006. The site ranked 11th among Business & Finance - IT & Internet websites last month.

Whilst Google employees tend to play down the "PayPal killer" label, the comparison helps to put things in perspective. PayPal received a 67x larger share of US Internet visits last week compared with Google Checkout.

The spike in December coincides with incentives offered to consumers to use Google Checkout, not just the busy retail season. Consumers were offered $10 to $30 off purchases by Google in the US launch and are being offered £10 off purchases of £30 or more in the UK.

The generous incentives clearly worked in the US to bring customers to Google Checkout. After the incentives stopped, visits dropped off. But, so too did Christmas shopping. To isolate the seasonal effect, we can look at how much of retailers' own traffic goes to Google Checkout. Looking at downstream US visits from the Hitwise Shopping & Classifieds category, we see the exact pattern as we saw above with visits. This indicates that after incentives stopped, consumers were less inclined to opt for Google Checkout.

The retailers that accounted for the largest share of upstream US visits to Google Checkout in April were Buy.com, Toys 'R Us - USA, Dick's Sporting Goods, AmericaRX and FYE.

UK Launch
In the UK, Google Checkout only just launched last month and the site ranked 60th among Business & Finance - IT & Internet sites last week. The following shows the weekly share of UK visits to Google Checkout. To offer some perspective, PayPal attracted a 53x larger share of UK visits last week than Google Checkout.

The retailers that accounted for the largest share of UK visits to Google Checkout last week were Empire Direct eBuyer, Cartridge People and Dust Bag.

A few retailers have asked me about the likely impact of Google Checkout in the UK. I was at the Pindar retail event earlier this week and there were some very smart questions asked of Paul Frantz of Google about the new service. (You can view presentations from the event on Slide Share). Retailers asked about take-up in the US, the impact on conversions, the impact on lifetime value of the customer and costs. There is clearly a great deal of concern about the search engine that powers 79% of UK Internet searches knowing everything from the cost per click and the transaction value right down to the customer's identify.

After the consumer incentives stop, I'll revisit this post to see if UK take-up continues to increase. If the pattern seen in the US is any indication, interest will drop off after the incentives stop at which point growth will be more modest.

Heather Hopkins

Heather Hopkins is VP of Research for Hitwise UK. This piece was first posted on Hitwise Analyst blog here.