Search giant Google has announced that it would debut a credit card – with an initial wave of invitations also issued Wednesday – but the product comes with a significantly narrow focus.
That is because, as discussed by Google vice president of online sales Claire Johnson, the card – which will carry an 8.99% interest rate and is a MasterCard – will be usable only to purchase search advertising on Google.
Thus the name, the AdWords Business credit card. AdWords is Google’s name for its lucrative business of selling ads – often to small businesses – that are linked to key words.
Johnson told Reuters that the typical AdWords buyers – small businesses – “are resource-constrained and they are often cash flow-strapped.”
“Many of them are trying to grow a business without the kind of means that, say, your classic company has," she said. The Google AdWords card – issued through World Financial Capital Bank – is intended to help “cash flow-strapped” businesses advertise even when they are not flush with cash.
As for cash, Google – which generates almost all of its revenues from advertising sales – is very flush.
Brent Callinicos, Google's treasurer, in noting that Google is sitting on a mountain of cash – as of June 30, it had $39.1 billion in cash and cash equivalents – commented to Reuters, "Obviously we have a robust balance sheet, so this is a way for us to use that balance sheet to help our customers."
Callinicos stressed however, that the card’s primary goal is to help credit-worthy small businesses find financing in an era where that is not always easy.
Google also indicated the 8.99% interest rate is an ongoing rate, not an introductory rate.