The Motley Fool has an interesting article on why Google could be expanding their GMail storage to 2GB. The obvious answer, to keep ahead of rivals Yahoo and MSN, isn’t the final answer, according to author Rick Munarriz. The real key is increasing ad space. With 98% of revenue coming from their pay-per-click ads, it is in Google’s best interests to keep consumers on pages where those ads are displayed. Given the falling cost of bandwidth, it’s cheap for Google to hold onto messages longer and chance that a walk down memory lane will trigger a click on a currently relevant ad.
Munarriz calls it greedy. I think it’s just smart. More storage space builds goodwill as well as traffic. It’s a win all the way around.
Of course, Robert Scoble seems to think that 2GB isn’t enough. As a packrat myself, I have to agree. More space, please, Google. I even promise to look at your ads.