People are always looking for a good deal. They like cheap things. They like free things even more. And they absolutely love being paid for things. So it should come as no surprise that Hitwise reports on the use of Google Checkout in the U.S. show a giant spike in traffic during the holiday season. If you remember back, Google was actually paying people to use Checkout during the spike:

Almost as soon as Google stopped paying people to use Checkout, the service saw a dramatic drop in usage. And while it continues to grow its market share, that growth is much more inline with what you’d expect from a new service.

Google recently launched Checkout in the U.K., and as Hitwise intelligence shows, a similar spike in usage has occurred. But then again… Google is paying folks in the U.K. to use Checkout now. Heather Hopkins, VP of Research for Hitewise U.K. says she expects a similar decline in traffic for Checkout once Google stops paying folks to use it.

The point in bringing this up is to highlight the fact that Google’s plan didn’t work in U.S. as well as I’m guessing they hoped it would. The idea was to pay people to use Checkout, hook them, and retain them. Sure, Mountain View knew a lot of people would simply use the service to get some free money. But I wonder if they were expecting the mass exodus that occurred when the free money stopped.

If you look at the Hitwise charts, you’ll notice that post-promotion usage dropped almost to the point it was pre-promotion. Do you know what that tells me? It tells me that the number of people who stuck with Google Checkout was minuscule… tiny… barely enough to make a dent at all.

Are they expecting something different in the U.K.? I don’t think they should hold their breath. The problem with Google Checkout isn’t that there’s really anything wrong with it. The problem is that you can do everything Google Checkout can do - and a whole lot more - with PayPal.

So why even bother with Checkout?