The Good News For Innovation: Google Went Public

So there has been a lot of talk about Google becoming the new Microsoft and how Google is suffocating innovation by carelessly stomping on emerging markets. Now I see eBay has decided pay-per-click ads on its sites.

So what’s the good news for innovation about Google going public? Just like eBay’s, Google’s investors are going to realize how much money Google is leaving on the table – and they are not going to be happy. Think about it… I’ve never clicked an ad from within my Gmail account. If they’re selling impression based ads (and I bet they are), then they make some money on my account IF I am a very active user. I’ll bet they don’t make $5 a month though, or even close for that matter.

So as Google moves into other applications, they are going to find there is far less revenue in running ad-sense ads. Why? I don’t know about you, but I am in my email all day long. No other application even comes close in terms of my attention or usage.

So… Let’s apply Google’s strategy to other applications – ones that are less commoditized than email, but the perceived value is higher. In those scenarios a user might generate $5-$10/YEAR in Ad-sense revenue – and active user that is. But because the perceived value added by the application is higher, that same user would be willing to spend $15/MONTH for the service.

Clearly, they will be leaving heaps of money on the table. Wall Street will tighten the vice. Paid services are inevitable atGoogle…especially when they enter the business space where many organizations want to pay the services they consume.

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