Google is shutting down the Google Reader service, as you may have heard.

I am not happy about this, but I'm also not throwing fits about it. I spent more time in my Reader tab than any other by a huge margin. I'm sure there's some other service out there that will fill the void. Google is also being pretty considerate about this: they're giving users several months warning and they've made tools available to export your subscription data.

RWCG has had a couple of posts taking the wind out the sails of all the people who are tearing out their hair and rending their garments and casting the evil eye towards Mountain View. Overall I think he's on the right track, but this post doesn't quite line up for me:

RWCG | Crimson Reach | Google Reader: The end of the ‘free’ era

How dare Google shut down a service I made heavy use of for years and years and paid nothing whatsoever for! [...] I wonder if this event marks the end of the ‘free’ era. You know the free era, it’s the era where this was the prevailing business philosophy:

1. Drive competing services out of business with a free service (subsidized by a profitable product).
2. Cancel free service.
3. ???

Actually no, that’s still snarky. It’s more like this:

1. Company gives away something for free.
2. People like it and use it.
3. This makes people think the company is cool. Their friend.
4. When it goes public, they buy its stock, cuz it’s so cool, and everyone they know uses and likes it. Surely that’s gotta mean something, stock-wise.
5. People continue to use the free thing and come to not only rely on it but expect it as their birthright.
6. ...
7. Profit?

According to this philosophy, giving away cool stuff for free was the wave of the future. It’s what all smart, cool companies did. Only backward knuckle-dragging idiots couldn’t figure out how this added up to a business model. Economic realities were no longer reality.

I think he's short-changing the business potential of a product ("product"?) like Google Reader. There's no direct line between "make Reader & give it away free" and "profit," but this approach still has some uses.

1. Yes, it makes people think you're cool and friendly and not-evil. Many firms do things for that reason alone. They spend billions on things way outside their core competencies just so people think they're cool and friendly. Isn't that the entire point of the "Corporate Social Responsibility" fad?

Google paying its employees to create Reader is in it's wheelhouse; it makes sense. Far more sense than, for example, Chrysler paying its employees to lay bathroom tile in poor neighborhoods.

2. Providing services like Reader makes Google look cool to people generally, but more importantly it makes them look cool to geeks. It's a punchline that a firm's number one asset is it's people, but that's pretty true about Google. They can do what they do because they get the pick of the litter of hackers.

I went to career fair my CS department sponsored a month or so ago. The line for the Google table was literally out the door. Most people in my graduate program are angling for academic jobs. Google is one of maybe four private companies that people will be impressed you're interviewing with.

3. Projects like Reader not only motivate applicants, they motivate employees.

Talent and productivity are extremely unevenly distributed in coders. The best are many orders of magnitude better than the median; the bottom decile (conservatively) have negative productivity. You usually don't get the best by offering them orders of magnitude more money, you get them by giving them cool problems to work on.

If you're excited about spending some time developing X, there's a good chance Google will let you do that. (At least in comparison to if you were working at Initech.) What's more, there's a chance Google will roll out X to millions of people, like they did with Reader. I can't stress enough how big of a motivator that can be.

4. Google's strategy for a while has been that anything they do to make people want to use the internet more is good for them, because they capture a dominant slice of the ad revenue online. More people spending more time online is better for Google, period. Reader fits into that. That's not a strategy that will work forever, or for many (any?) other companies. It can also be used to justify a lot of wasted "investments." But it's also true.

5. Google lives and dies off of data. Reader could have been generating that for them. I have no idea how much they actually learned from people's reading habits, if anything, but it had the potential to be a goldmine.

If you can predict people's age, race, religion, political party and drug use only using publicly available "likes" on Facebook, what could you do with my online reading habits? (Answer: sooooo much.)

I have no idea if it was a good idea or a bad one for Google to shut off Reader. I'm skeptical, but I realize I have none of the facts. I can't imagine it would cost that much to keep it running as is, especially compared to their other projects. I'm not sure what better use they have for the resources they're redeploying. I'm curious that they didn't even try to make it ad supported. Hell, I would have even paid directly to keep using it, and I pay for approximately zero online subscriptions.

Again, I don't know what they know. But I do know that "there's no revenue from this free product; let's shut it down" should not be the beginning and end of this decision making.

This entry was posted in Business / Economics, CS / Science / Tech / Coding and tagged , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *