During the first six months of 2007, eBay (NASDAQ: EBAY)'s PayPal online payment transaction and money transfer service continued to beat up on new entrant Google Checkout. It's not for a lack of trying on Google (NASDAQ: GOOG)'s part -- it has made Google Checkout very visible at many high-traffic online retailers as well as plastered the service all over Google search results. Still, it has not made that much headway against PayPal.

In most respects, I chalk this one up to "first-mover" advantage. PayPal was there years before Google Checkout was even conceived, as it became the most popular way to pay for things on eBay, the world's most popular online auction place and a mini-economy all its own.

eBay even published the results of a Google Checkout survey recently that uncovered an interesting fact: less than one of five users of Google's Checkout online payment service was satisfied with the service. Ouch, Google. What is going on? PayPal's happiness figure was double that amount, which is still only 2 out of 5 satisfied customers, maximum. Weird. Google Checkout is still so new that specific metrics are not known, but my guess is that it has a tiny market share compared to PayPal.

Can PayPal continue to provide eBay with a nice income stream even in the face of its core auction revenue possibly slowing down? Most likely, yes. Even the mighty Google may not be able to catch up with PayPal since it has its huge lead and is firmly planted in the minds of millions of online merchants and customers. Though it's used to being a market leader, Google may have to settle for second place in the online transactions space.