Google has been pretty tight-lipped about both internal and external performance metrics surrounding Checkout since it launched 18 months ago. In an interview with Yi-Why Yen from Fortune, they finally provided some data about the impact it's having for online merchants.
Google claims that users are 10% more likely to click on an ad that displays Checkout and 40% more likely to make a purchase once they reach the site. The 40% higher likelihood of a purchase seems high to me. Wall Street analysts estimate that Google has spent $80 to $100 million since June 2006 to get sellers and shoppers to use the service. While that data is better than nothing it still does not provide any meaningful information about the ROI or future viability of Checkout.
Checkout makes a lot of sense for Google as they can further entrench themselves in the search to transaction value chain and layer on added value to advertisers. The big question is what happens to Checkout when it's not free? Will more websites turn to traditional merchant credit card accounts?
My suspicions tell me that Checkout has been a disappointment internally and that the long term viability could potentially be in question. Their challenge will obviously be to gain broad enough demand from both consumers and merchants to justify their presence. I wish that they would share some more detailed information but their unwillingness to do so is probably a good indication of what's really going on.