Paid Premium Gmail Service - May Not Fly!

Google announces Picasa Web to link its desktop photo organizing app to a personal 250mb inhouse photo sharing site, along with the upgrade option to 6gb of storage for $25/year. More details available here. Yahoo's Flickr has a similar feature already available. Paul Kedrosky wonders on seeing Google's announcement why Google does not offer paid services for additional storage beyond 2 GB. I think Google is taking the right call here.

Four Key points stand out here:
- Despite Pual's claim that more than 2 GB space may be needed -I think that the number of such subscribers could be very less. For example, very recently, Yahoo withdrew its premium service,noting that it "was not an essential service for Yahoo users." The additional reason told was : there were very few people using it. It goes without saying that had Yahoo offered these higher level of services for free, and continued to sell ads, they might have been able to keep more users away from the competition.

- Second resaon, Tiered services always create problems for service providers - while premium services besides additional storage may need to be bundled inside, in reality somebody else coud be offering it free. On the other hand, it may be harder to convert free users to paid users without additional features.

- Third reason - you can sell more ads /increase adsense reach by keeping email services free .

- Fourth Reason - Gmail is still way behind Hotmail & Yahoo in terms of number of subscribers.

Strange are the ways that the net economy works !!