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Google races ahead in the world of ‘free’

Posted May 11th, 2011 by Andrew Goodman

Not long ago we opined that the only way someone could catch up to Google in the race for world domination would be to out-”free” Google. Chris Anderson has alerted us all to the nature of this most radical of business models. As a few technology players grow into behemoths, they’re capable of absorbing loss leader business models into their overall revenue funnels, crushing rivals in their wake.

Microsoft’s Skype acquisition was just the type of bold move we were thinking of.

But giving away free devices was also on our mind. Control the browser and OS? Google wants to. But the pace of adoption of their services isn’t quite what they’d like to see.

Piloting a $20/month laptop for the student market might be an interesting move in this direction, something Google has announced today.

Next stop, the enterprise market?

Unfortunately for Google’s rivals, then, Google is likely to counterpunch with more ‘free’ just when the competition digs deepest into their pockets to keep pace.

Strangely, this probably won’t result in everything being free, when all is said and done.

It sure does play havoc with ecosystems that run on stable, sound, profitable, business models, however. That should give the VC’s a lot to think about, and a lot more justifications for larger, riskier, funding rounds.

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