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Google software for netbooks, a subsidized pricing model?

By Lawrence B. Ebert, Esq.

Related to an earlier post on IPBiz [
Google v. Microsoft: Android/Windows, Google/Bing ], Peter Glaskowsky has an article Google's Chrome OS strategy explained which notes:

Linux may be free, but Google can undercut that price if it's willing to cut OEMs in on its ad revenue. In this way, Google could bring to market a subsidized pricing model we usually associate only with 3G-equipped notebooks. Google won't have nearly as much money to throw around as the cellphone operators do--maybe just a few unpredictable dollars per month averaged across all Chrome OS users vs. the reliable $60/month subscription fees associated with 3G cards--but that could still add up. Even a $20 subsidy could amount to ten percent of the sale price of a cheap netbook, which could tip the balance in favor of Chrome.

It seems to me that netbooks aren't the ideal platform for this strategy. The Google model can't work as well on a small screen, since users will be reluctant to share what little space they have with Google's ads. But they'll work well enough, and Google has no realistic chance to place Chrome on mainstream notebook and desktop systems except in the same narrow markets where Linux sells today. (And not all of those; for example, Chrome has no shot at the engineering workstation market, where Linux is popular.)

So I'm sure we'll see some number of Chrome OS-based machines on the market in 2010, and then we'll see what happens. My guess is that Chrome will do about as well as Linux has done in the netbook business: not well.

See also
http://ipbiz.blogspot.com/2009/07/microsoft-and-googles-android.html

Glaskowsky made reference to the Coolidge effect, which within Wikipedia includes:

The term comes from an old joke, according to which President Calvin Coolidge and his wife allegedly visited a poultry farm. During the tour, Mrs. Coolidge inquired of the farmer how his farm managed to produce so many fertile eggs with such a small number of roosters. The farmer proudly explained that his roosters performed their duty dozens of times each day.

"Perhaps you could point that out to Mr. Coolidge," pointedly replied the First Lady.

The President, overhearing the remark, asked the farmer, "Does each rooster service the same hen each time?"
"No," replied the farmer, "there are many hens for each rooster."

"Perhaps you could point that out to Mrs. Coolidge," replied the President.

Full post as published by IPBiz on July 09, 2009 (boomark / email).