The vast majority of their revenue comes from selling advertising on Google OWNED sites eg google.com:
http://www.businessinsider.com/chart-of-the-day-in-case-you-...
Google is the industry leader at monetizing search, but nothing else they do comes close.
I am truly curious - is the reason that Google keeps investing time and money in "line-extension" businesses to distract competitors, keep the antitrust police away, what?
Google's stated mission is to "organize the world's information".
There is tremendous power in information. Not so much in your own, but on the correlation of your data to everyone else's; the collective statistics about anything is where the power lies.
In gmail, google reading my email tells them to sell me product x and we think that's the end of it. But there is so much more available in terms of how the aggregate masses behave with regards to product x and its correlated points.
This extends right into file storage. Yes I am saying that Google will "read" your data. Even better, I'm saying that Amazon more than likely is already doing this.
They're doing it not because they give a damn about you, but because they want the data points that come from the analysis of many separate instances of unrelated bits and bytes. That analysis is worth a fortune. It's a modern day gold rush.
This makes perfect sense for Google.
What this adds is information about site traffic - who's using what from where. Between Google Analytics, search trends, and toolbar, they've already got a lot of that. But I imagine that's part of the rationale for this.
I don't want to put on a tin-foil beret, but how much revenue do they actually make from ad-words on the side of GMail? I can't imagine it's much, but then I'm probably biased in that I don't even notice they're there.
The pragmatic part of me realizes GMail is a service that improves 'lock-in' to the 'Google Ecosystem'... the paranoid part of me thinks about how valuable a "search everyone's inbox" rather than a "search my inbox" feature would be.
Re-read run4yourlives message. He does not say gmail tries to sell you product X, but gmail tells Google you might be in a buying mood for product X.
Yes I am saying that Google will "read" your data. Even
better, I'm saying that Amazon more than likely is already
doing this.
Apart from the business perspective, at least this is one thing where they can be strong, and able to match the expectation of users.
Also I can't see how this is different from Amazon, business side: they got an infrastructure in order to run their other business. But there is no point in using this just internally, if this can be provided as an high quality service. Looks sane to me.
There are at least two good reasons.
The first is that it commoditizes the Internet further, which means more people will use it to look at Google ads.
The second is, as other people have said, that they can potentially get valuable data out of it. It's actually rather scary how few web sites Google is not able to keep track of, if you consider both ads, analytics and search traffic.
They built an infrastructure to scale their site and made it publicly available when they realized that people would pay for it.
This is what good businesses do, Google is no different.
My point was that line extension has been shown time and time again to be toxic for businesses and Google's bevy of marginal non-search projects seem only to reinforce that this is accurate.
Al Ries has dedicated an influential book to the subject called "Focus" and I've seen the damage line-extension can cause first hand in businesses I've worked in and invested in.
Considering the variety of points of view this comment spurred, I was suprised to see it = 0 which tells me that HN doesn't want this type of comment in the future?
Much better strategy I thing rather than the exploiting cash cows until they dry up, which a lot of business does.