Google’s PayPal Aspirations

The New York Times has drunk the Google Kool-Aid and it tastes good! Today, it has a fawning story on Google’s attempt to take on PayPal through Google Checkout. The article suggests Google is pouring lots of money into Google Checkout (no merchant fees for 2007, it has thousands of merchants already using it, and it has aspirations way beyond just online payments. Google has clout, Google has aggressive diversification plans, Google has billions of dollars in the bank and Google has lots of advertising clients but is it enough to take on PayPal?
It’s not like Google has done a stellar job knocking off any entrenched player other than its original search engine foes such as Lycos and Excite. Is GMail bigger than Hotmail? No. Is Google bigger than Yahoo Finance? No. Is Froogle bigger than MySpace or even Friendster? No. Is Google Blog search bigger than Technorati? No. So what makes anyone think that Google Checkout will be bigger or better than PayPal? It is possible Google could jump-start Google Base by strongly encouraging its advertisers to use it as their preferred payment vehicle. But how do you convince consumers to embrace Google Checkout rather than PayPal. I guess lower prices might be one way but PayPal could match any offers.
Let’s just say, I’m reluctant to get excited about new Google initiative given its spotty track record. Sergey Brin has openly talked about the company being more focused so perhaps the future of Google Checkout is a more of an advertising-focused play than a consumer play.