An unusually cryptic post on checkout.google.com says, "Please be aware that as of June 2011, the Google Checkout badge has been removed from AdWords ads. This change impacts badges that appear on google.com and google.co.uk search results. This includes the standard and promotional Checkout badge for both merchants and non-profits." Given the absence of any concrete explanation for the move, it's hard to not interpret it as Google backing away from the service. It's true that AdWords ads are very small and every character precious, but when Google stops promoting a one-time important service, the tealeaves are not very difficult to read.
In the alternative E-Commerce payment arena, Google Checkout has proven to be one of those rare missteps from Google—a product launch that has had surprisingly minimal impact in its segment. This week, Google made a move that might very well signal the beginning of the end for Google Checkout. Google Checkout badges—small promotions for the service—have been unceremoniously yanked from AdWords.