Google is getting into the credit business for the first time, with the launch on Monday of a programme in the UK to finance purchases of its online advertising by businesses.
The move marks the opening of a new front in the battle between the biggest internet companies, as they turn to their balance sheets as a source of competitive advantage. Amazon said last week that it had begun making loans to independent sellers that offer their products on its marketplace, marking the online retailer’s first move into financial services.
Google’s decision to issue its own credit card, which will also be made available in the US within weeks and other unspecified countries later, signals the company’s first attempt to use its huge cash reserves to support its core search advertising business by subsidising low-interest rate credit lines.
It said it would offer customers credit of between $200 and $100,000 a month to pay for their use of Adwords, which places messages next to the results in its search engine and made up the bulk of its $37bn in advertising revenues last year.