eBay after the bell 6/29/06: Checkout isn't checking out?

eBay's competition was busy today.

First, the Gmarket IPO was a success, raising $139 million.  Gmarket is eBay's competitor in South Korea.  Yahoo Inc owns 10% of Gmarket.

Then, Google's long awaited Checkout (not the speculated GBuy), was launched early in the morning.

EBay shares were off Tuesday to a 52 week low when a WSJ article suggested that Google Checkout would be released as early as this week.Yesterday, however, eBay stock has already rebounded and today, it turned out once the genie was out, that it wasn't so bad. Indeed, Google Checkout is different from PayPal on many levels.

I've been surfing the blogosphere to get the sense of what people think of the new Google (GOOG) service compared to the existing PayPal and it seems most aren't that impressed with Google Checkout and many agree the benefits to the buyers seem minimal at the moment.

• One problem many cite is the fact that Checkout is limited only to US merchants while PayPal just keeps increasing the number of countries it operate in.
• The presumed appeal to buyers - giving out credit card information only to Google instead of many different merchants - can also be the downfall.  Do consumers really trust Google with that much information? Many are quite suspicious.
• From a merchant perspective, though, transactions costs are lower to nil, especially for AdWords and AdSense users.

For current PayPal users (buyers) there doesn't seem to be incentives to switch to Google Checkout. For now, I think, PayPal is well positioned. If, however, many merchants will switch to Checkout, we'll have to see who wins out - the buyers (assuming many are sticking with PayPal) or the sellers (assuming some are switching over).

eBay shares were up 51 cents today (1.77%) to $29.26.  Google shares by comparison were up $11.70 (2.88%) to close at $417.81.