I used Google Notebook fairly heavily, but they discontinued it. I love (and pay for) Evernote now, which has lots of great integrations with other products. Why would I trust Google again?
Given that you need a Google Account to use this, and it is a new component of Google Drive, I don't think its really about winning back people who have rage-quit Google over the discontinuation of Google Notebook (or Google Reader, for that matter.)
Google is doing something which I didn't think was possible, which is to teach a vast marketplace that "free" isn't real.
I've had the conversation with lots of people about how free services are unsustainable because they incur real costs, and like a ponzi scheme you run out of suckers eventually who are willing to put in new money. And yet if you're collecting new users then there is some "value" there. But like shale oil of old, if you can't convert the 'value' into cash to fund operations, its not worth anything.
Google is in a unique position to train the billions of Internet users that you want something, you pay for it, if you aren't paying for it, it goes away at any time. So when the person running the 'free' service says 'time to pay up' you don't complain, you either pay or do without.
That was an impossible conversation to have during Web 1.0, it's being forced on Web 2.0, and I expect will be the foundation of Web 3.0.
Even if you're paying for something, it can still go away. There have been lots of paid services that failed, both online and offline. (Kozmo.com, Saab, Webvan, Hostess, etc)
There are sustainable free services, and there are unsustainable paid services, and often companies don't know what category a product falls into until years after it's been released.
And there is no evidence of them selling. It is just FUD.
Oooookaaaaay.
What have they spent it on? I have a mental disconnect between companies like Evernote and 37 signals. Why did Evernote need all that money?