Writely or Wrongly, Google Takes Aim at Microsoft

Om Malik reports on rumors that Google is in talks to buy Writely, an online word processor. Acquisition of Writely would give Google another arrow in its quiver of applications aimed directly at Microsoft Office.

Om has a chart in his post that compares the prospective office productivity offerings of both Microsoft and Google. The only one that matters is the bottom row which is the price:

Microsoft $350-$499……Google Free.

I know Google has a ton of money. I know they have to find a way to justify the still lofty stock price. I know they are building internets, giving ad-serving computers to the economically disadvantaged, and tossing $90 million of chump change at a click-fraud lawsuit.

But what I really, really, really want to know is how Google intends to make money off of this stuff.

Because I’ll tell you what. If the only revenue stream they can come up with is selling more ads, there’s a world of hurt waiting out there somewhere. The online ad game is cyclical, fickle and cannot support the billions of dollars of capital investments that Google is making.

The whole free web application business is becoming a dangerous house of cards based on a faulty premise- the continued flow of online ad sales.

So I’d like to know exactly how Google expects to make money off of this stuff. That’s all that matters.

Traffic without revenue is meaningless.