[drivetowin]

Originally Posted by woutermols Google does nothing that does not somehow, somewhere have a positive financial impact.

True, but isn't that true of 99.99% of businesses, large and small. Even if someone takes the moral high ground and says 'I am not doing this' in the long run are they not doing it in an attempt to win more business from people who admire their stance in not doing this - whatever this is in each particular instance.

Originally Posted by woutermols And once things start ticking over, the merchants are using their cart, how long do you think the free transactions will last?

They have already said transactions are only free until January 2008.

Originally Posted by woutermols Short term loss for the long term gain, that's how it works with these companies.

To be fair, this is a common competitive tactic amongst companies large and small, I am aware of a couple of relatively small merchants on this forum who have sold particular items at a loss to win customers in the longer term - it's plain retail economics - nothing sinister - it just depends on the depth of your pockets how long you can keep it up.

Some people have a problem with the fact that large corporates like Tesco and Google can cross subsidise from one section of their business to another and claim that is unfair - personally I've never had any problem with it, it's their money (or their shareholders/investors money) and they should be able to use it how they wish - I don't see any difference to Google or Tesco doing this and a smaller company attracting investment or taking a bank loan and using it to choose to sell items below cost in the short term to win a long term customer base.

After all let's face it if we were all unable to undertake commercial activity that we knew would make a short term loss, most affiliates would be unable to undertake any PPC activity at all - most PPC campaigns are based on taking an inital loss per transaction until the CTR and conversion rates combine to bring down the CPC to a level which allows a profit.