Google makes first foray into credit business

Google took a staggering step forward Monday as it announced the launch of its credit business for the first time.  The business will be used to finance purchases of its online advertising, offering customers between $200 to $100,000 a month to pay for Adwords.

Preceded by Amazon a week ago, this step signals a new era in online competition as companies fight to secure new business.  The problem Google’s treasurer, Brent Callinicos, seems to think exists is that small businesses don’t have the financial capital to be able to risk expanding themselves online online.  What Google is doing is giving these small businesses a chance to extend a little bit with less risk than traditional banks might offer (due to their low interest rates), while actively securing their business by controlling their loans.

It seems these internet moguls are now getting to a point where they’re starting to act like banks, which is a scary thought when you think of the average life span of these kind of businesses.  I think that the dotcom industry still has a long way to go in proving that they can stay solid before I would open up a line of credit with them.