It’s still early days but things are definitely hotting up in the battle of the online checkouts. 

Yahoo Search Marketing is testing out PayPal Shopping Cart icons on eBay advertisements listed in the search engine’s results pages, according to SearchEngineJournal.

Google and PayPal owner eBay may have surprised observers recently by climbing into bed recently with an unexpected collaboration but both parties will be acutely aware of the threat posed by Google Checkout to PayPal online payment hegemony.

We have reported previously how eBay did not include Google Checkout under ‘Accepted Payments’.

But although the embryonic Google Checkout has been suffering from teething problems including some etailer resistance recently, this has not stopped it from continuing its march to establish itself on the front-line of e-commerce.

It did not escape the attention of commentators this week (including Brian Smith of that Google is now including Checkout in its Froogle listings. The only surprise about this is that it hasn’t come sooner.

The numbers of retailers implementing Checkout are certainly increasing but we believe that Google will need a huge marketing push towards consumers in order to get widespread adoption by retailers.

To get back to the military metaphors, it’s not quite time for the WMD yet but there is still room for plenty more tanks out on the lawn.