Share this post

Tuesday May 31, 2011

Topic: Marketing Management

Reference: Rimma Kats (May 27, 2011). “How does Google’s entry change mcommerce as we know it? Mobile Marketer. Http://www.mobilemarketer.com/cms/news/commerce/10048.print. Retrieved May 27, 2011.

Major advanced in mobile payments have been on the horizon for years.  Recent advances in PayPal for mobile, Groupon, and others have helped to expand the space for mobile commerce.  Other location specific services like Foursquare have contributed significantly to this expansion as well. Still mobile payment continues to be regarded as a niche segment. For mobile marketers there was an exciting announcement last week. Google announced its own mobile payment platform in partnership with Citi Mastercard. The announcement shook the marketplace for coupon, payment, and transaction-oriented companies, as Google has the capability to be the 600-pound gorilla in the market for mobile payments.  Since it is not new to the market, Google has had time to evaluate, process, and strategize about the mobile payment segment and its initial offering brings a significant value proposition to the space.  The Google announcement could cause the mobile payment segment to mature almost immediately. According to the referenced article, the Google offering has the ability to store multiple loyalty cards, multiple credit cards, offer a Google pre-paid card, coupons, and other features. “Google Wallet and Google Offers will help create a great shopping experience to shoppers. They will help merchants bring stronger relationships.”  These features offer great convenience, security, and a quality user experience. The Google offering literally changes everything and will move Google to the front of the emerging mobile payment market. This announcement will impact mobile commerce, mobile platform sales, phone penetration and many other elements of the mobile market. Not good news for the stock of other mobile e-commerce companies.  That could be one reason that soon after the announcement, PayPal field a lawsuit against Google. Google allegedly had held previous talks with PayPal; hired away key senior level executives, and may have infringed on trade secrets. The stakes are huge in this market segment and this litigation will be worth monitoring closely.  At the outset there are at least four lessons to learn here: (a) first movers don’t have all of the advantages; (b) innovation is the key to positioning in new market segments; (c) don’t train potentially large competitors to enter your market without you; and (d) zip lock your IP rights to the greatest extent possible before talking with any potential partner.  You have been warned.