Monday, February 06, 2006

Google vs. PayPal: world's shortest fight

Based on my personal PayPal experience, I think of them as a great solution for shady operators. It turns out I'm not alone in my feelings about PayPal (and eBay). A rumor that Google might enter the transactional marketplace has generated a remarkable Slashdot consensus; PayPal's natural customer base want PayPal to be crushed like a bug.

Companies can last quite a while when their customers hate them -- if switching costs are high.

In this case, the switching costs are not high. If Google makes this move PayPal is toast.

Of course I've overestimated the significance of Google's moves before. Google Base has not set the world aflame, in part due to a lack of a security model. I did say, however, that the next step was the payments system. (Yeah, I wasn't the only one to draw that obvious conclusion.)

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