Google Picks Coinbase
Google parent Alphabet (GOOGL) recently announced a partnership with Coinbase (COIN) that will allow the tech giant’s customers to pay for cloud services in cryptocurrency. The feature is expected to launch by early 2023. At the same time, Coinbase announced that it will be moving data-related applications from Amazon Web Services (AMZN) over to Google’s cloud.
Coinbase was selected as Google’s primary partner over rival payment company PayPal (PYPL).
Beating Out Amazon
While this partnership is huge for Coinbase, it’s also a massive win for Google’s cloud division, after it successfully lured Coinbase away from Amazon Web Services.
Google Cloud is one of the fastest-growing segments within Google and currently makes up 9% of its revenue. Google is a behemoth of a company but arguably lacks revenue diversification — the overwhelming majority of its revenue comes from ads. Growing its cloud division is of massive importance in order to diversify, and is therefore a big priority for Google.
The biggest problem with growing its cloud division is that the cloud services market is currently dominated by Amazon Web Services. AWS has a multi-year head start on other companies and, additionally, cloud computing is a very sticky business.
For large companies, switching cloud providers is time-consuming, risky, and distracting. This makes them more inclined to stay with their current provider. The fact Coinbase bucked that trend and made the switch underscores how this is a huge win for Google.
Paying With Crypto
The global economy continues to adopt cryptocurrency in new ways. Crypto has gone from being a small, niche project with a cult following to something that the world’s largest companies want to get involved in.
Additionally, the fact that Google is implementing technology to let its users pay in crypto may speed up the adoption of digital assets. Since Google Search directs 92% of the internet traffic, the move means that the bulk of internet users could be exposed to crypto payment services. And while users will only be able to pay for cloud services right now, it’s possible that payment options could expand over the coming years.
For the user, this partnership hopefully means that you’ll be able to enjoy all the benefits of crypto like instant transactions and global payments. Iin the short term, it’s important to remember that cryptocurrency prices are still incredibly volatile. Bitcoin, the world’s biggest crypto, is down 60% this year.
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