Thursday, February 17, 2011

Why Google Can Afford to Undercut Apple in Publication Subscription Pricing Model

Yesterday, Google announced its One Pass publisher subscription service. Just a day after Apple announced its own service. One key difference between Google vs. Apple's offerings is the revenue share %. Apple is taking its usual 30% cut, while Google is only taking 10%.

Google isn't lowballing Apple to just be nice to publishers, even though Google had rustled their feathers in the past from its other business practices. Because Apple has a different business and mobile strategy, it has a different pricing strategy than Google for its subscription service.

In fact, it is about getting more consumers to sign-up for its Google Checkout service. One Pass is facilitated by Google Checkout. Google Checkout is a a key component of its long-term strategy. Google has recently talked about its plans to bring NFC technology to its Android phones soon. Google Checkout will be the payment system that powers e-wallets from the Android phones.

Need more proof that online payments is going to be huge? On eBay's recent earnings, CEO John Donohue talked about the strong growth from PayPal and how it will continue to grow in importance to eBay in the years to come. Also, keep an eye on Facebook Credits, which may be a virtual currency for games today, but that won't stay that way for long...


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