Now that everyone knows what a Ponzi scheme is, isn’t gmail quite close to one? More and more users, more and more storage needed to store their email. The price of storage is unlikely to fall forever. Eventually cost per user will overtake profit per user — and then the whole thing begins to collapse. Not in my lifetime, please.
Hey Seth … and all.
Have you seen the ads that are on
the right hand side of your gmail account?
Do you have any idea of the revenue generated?
Ponzi would have lasted a long, long time
if he had the kind of pay per click ad ad revenue that Gmail delivers.
J
Given that Gmail is free (but ad supported), I do not see it as a Ponzy scheme.
Sure, it might be painful to have to switch to another provider, but nothing lasts forever.
In any case, I see no reason why Google Mail could not survive for a very long time by asking us to pay.
Daniel, Ponzi scheme = you store your money there. Gmail = you store your email there. Ponzi scheme = better than other money-storage (investment) choices. Gmail = better than other email choices.
Maybe the network effect will help — bigger audiences yield higher CPM/ad rates.
It’d be interesting to see what the numbers look like — maybe it’s making money already?
youtube is also a puzzling business for google.
Storage prices do follow an exponentially decreasing curve. The value of an ad impression may decline too, but is unlikely to keep up. (Jim: no, I don’t see the ads unless I specifically look for them, but it is manifestly evident that many do.) The danger is that the size of messages may grow exponentially to match, but that doesn’t seem to be happening. Maybe that’s because most big attachments people send are duplicates of ones others send, that Google can (if they choose) store once for all. Or maybe it’s that producing big attachments is time-consuming.
It occurs to me that youtube may be a method Google employs to minimize the storage demands on gmail…
Well, I will grant you, those are certainly novel definitions of a Ponzi scheme.
Shh — don’t tell Google — but I’d be more than happy to pay for Gmail if I had to.
Gmail already has a paid version for heavy users.
But I don’t see “free” Gmail as a major money-loser; it is extremely valuable to Google because it lets them target ads at you based on your private correspondence. No marketer in human history has ever known that much about its audience.
Mark Cuban had an interesting post on how (he’s convinced) Google will have to pull the plug on YouTube in its present form:
https://blogmaverick.com/2009/06/02/the-google-youtube-conundrum/
One tarabyte hard drives are selling for under $80.00 on the net. It is likely that one of these drives would be enough for several lifetimes of email. Storage doesn’t have to get any cheaper – it is cheap enough as it is.
One factor that is relevant to Google but not your typical ISP is that Google has enough market share to see a large slice of email traffic, and therefore each email sent or received is more likely to be sharable, at least in content if not headers. Thus Google has the opportunity to use interesting sharing algorithms to reduce storage requirements.
The price of storage is unlikely to fall forever.
It is impossible to fall forever – the heat death of the universe is lurking in our future. But until then, barring major wars or catastrophes, I see no reason for the storage cost to ever stop falling. That’s how technological advancement works. I certainly don’t see any reason for it to stop falling anytime in the next few decades.
I am probably forbidden by confidentiality agreements from telling you what gmail costs per user per year, but it is shockingly low.