Yahoo, PayPal Team Up On Checkout

Building on their existing alliance, Yahoo and PayPal today announced that Yahoo Sponsored Search results will feature a blue shopping cart icon linking to merchants that accept PayPal Express Checkout as a method of payment.

Participating merchants’ search listings on Yahoo will be enhanced with the shopping cart icon, pointing consumers to a bright orange button on the merchants’ checkout page, offering a simplified path to complete purchases using PayPal Express. Here’s a screenshot:

The icon looks remarkably similar to the shopping cart icon displayed when Google Checkout first launched. Google subsequently changed the look and position of its checkout badges.

I asked Rich Riley, Yahoo senior vice president, online channel & small business services, how the Yahoo/PayPal checkout differed from Google’s checkout program. While acknowledging that the functionality was similar, Riley pointed out that PayPal has more than 100 million existing customers, far more than the number of advertisers using Google checkout.

Indeed, a J.P. Morgan study last January found that PayPal dominated the online payment category, with PayPal’s 42% penetration rate in 2006 being seven times greater than Google checkout.

Yahoo! and PayPal are launching this new program with a series of special offers for merchants. More information about the new Yahoo PayPal Checkout program can be found here.