Heh. TL;DR version - Google starts recovering their costs, hits people in unexpected places.

So back when I worked there Google had no clue what it cost to run their infrastructure at a fine grain level. Sure they knew the aggregate cost, that was easy, but knowing on an application level didn't exist. This was a problem since as more and more things were using the machines, how did you "bill" a department for their machine usage? That really crystallized when the bottom fell out in 2008 and suddenly there was going to be no more new machines/data centers for a while and everyone had to 'make do.'

They mobilized an effort to figure this out, its not like it isn't knowable, and ever the data driven company the first signs of light were appearing just as I was leaving. It should not be a surprise but they discovered many things they did not previously believe was true, and I don't doubt it has driven a lot of change going forward. One of the more interesting outcomes was that projects/products were actually getting cancelled if they cost more to run than they could generate in revenue (I'm looking at you Goog-411)

So this knowledge is being applied to GAE, which is great, its also another way to back compute some of their operational efficiencies.

But that it costs money to run stuff? Well that isn't really news is it? That it costs that much? Well there is the whole if it doesn't make money it will get cancelled threat.

And the kicker is pricing out the scarce resource. It looks (and I've been gone over a year and half so I am speculating based on this move on their part) like their 'scarce' resource is web server front ends. (the labeled "Frontend instance") Traditionally they've been like most multi-tier web properties split between front end machines which host the web facing stuff, and back end machines that do the heaving lifting and storing. And by this change one can reason that residency on the 'front end' is more valuable than crunching in the 'back end.'

I'm guessing PlusFeed gets a lot of web traffic. So they spend a lot of time 'actively' on the front side, and from their numbers they do practically nothing on the back side. This fits well with the sudden massive price increase.

This gives you an insight into Google's business dynamics as well. Where page-views are the limiting resource, and computation is not. When you look at it that way, you can see that most of their 'revenue' has to be delivered through their front end services, and so consuming that resource reduces (potentially) their income. Hence the charge inconsistency.

Now contrast that to Billy-Bob's Web Farm (fictitious service) where every machine in their data center can be a web server, and front end serving is trivial, its all about the bandwidth. Their pricing would probably be more gigabytes transferred.

I would not be surprised at all if it is impractical to run such 'translation' services (basically all web traffic very little compute) on a hosted environment like Google's.