
I like the idea behind the newly-announced Chrome Web Store. It’s a store for web apps, which technically aren’t different from any other web sites like Google Docs. At first it feels like Google is just out to make a quick buck by mimicking Apple’s successful App Store. However, I think something more subtle is going on here. This is a a totally different approach to making money on the web.
Every now and then I think about making money from my side projects, but I’ve never done it. Why? Because making money on the web is called “ads”. If you’re selling t-shirts you probably don’t need ads, but if you want to make a website that’s fun or useful on its own merits, you don’t have a lot of options. Google makes 99% of its money from ads. The problem? I hate ads.
Ads pit you against your users. A user’s goal is just to use the app and have fun or perform some task. An advertiser’s goal is to get impressions. Do you hate the new ad overlays in Youtube? We all do, but Google has to pay the bills for Youtube to be free. Ever clicked a link, only to discover it wasn’t a link at all, it just triggered an irrelevant ad pop-up? They generate impressions. It’s a bait and switch, but someone is willing to pay for it, and someone has to write a check to Bob’s Discount Hosting at the end of the day.
Google has always known that people hate ads. That’s why they’ve put so much work into making ads painless. Their text ads are low-bandwidth and unobtrusive. Now and then, they can even be useful. That’s why Google is the clear leader in web advertising market share. Though now Google is asking themselves a few questions. What would the web be like without ads? And where would Google fit into such a web?
Are there websites don’t sell a more tangible product, don’t have ads, and exist only to be fun or useful? Sure. I made one, but the cost to run it is negligible. What would happen if it started generating millions of views a day, and my hosting company raised my rate? I’d need to take the site down, or find a way to make money. Inevitably, this would mean slapping ads on it. Yuck. Tons of interesting startups live in the same bubble I live in. Let’s just make a useful or fun app, and worry about money later, and only if we have to. With venture capital, you can live in this bubble for a long time. Sooner or later, though, reality sets in. Does this mean Twitter is going to have ads some day? Well, yes. They’re wrapping it up in a nice package, painfully aware of how much users hate ads, but that’s what they’re doing. That’s what you have to do.
This is why iPhone development is so appealing. You can make money without ads. Your app is just your app. I don’t understand in the least why Apple thinks creating an ad platform for iPhone apps is a good idea. They must underestimate how much people hate ads. I cringed when Steve Jobs acted genuinely excited when announcing this stuff. iPhone developers will continue to make it big when they make good software at a good price point. It’s such a better way.
As you think about all this, eventually you have to ask, why don’t web apps work like iPhone apps? Why are the choices “free” or “ads”? 37signals is pretty vocal in saying that you have to charge for your product. That works pretty well for the small-business collaboration and project management software that 37signals makes. But it doesn’t work as well the smaller the app is. On the iPhone, you can sell a nifty unit converter for $0.99. On the web? Not a chance. Google does it for free, as do countless other sites. Even if you have the best unit converter on the entire Internet that you spent weeks on developing and doing usability studies and designing gorgeous graphics for. The Internet just doesn’t sell web apps in that price range. You come across as a greedy jerk, even if you have a great product.
Can that be changed? Can we make it so that nifty bite-size web apps can be sold for a buck or two? How do you change it? Well, here are my guesses as to what you’d have to change:
- Safer and faster payment system. People hate putting in credit card information on some unknown website. They’d rather just pass than take the risk for a small app that isn’t such a big deal after all.
- Sense of ownership. A Tetris bookmark on a toolbar doesn’t feel like a product. It feels the same as all the free Tetris apps out there.
- Pay once. Periodic billing doesn’t make sense for small apps. What is the periodic equivalent of a $0.99? $0.05 / month? It’s silly. But still, not a lot of webapps work on a pay-once system. Why not? Well, at that price point, wouldn’t it be easier to just throw some ads on there? A pay-once model for apps should be simpler to set up.
I think the Chrome Web Store is an attempt to fix these problems. You buy apps quickly and safely through Google, you get a nifty apps tray in Chrome that makes it feel like you actually own something tangible, and you only pay once.

I don’t think that the Chrome Web Store is the future of web application development. On the other hand, I do think Google’s efforts will make it more acceptable to make money by selling your web apps instead of by tacking on ads. Once people get used to the idea of buying access to a tic-tac-toe website, web developers will have an easier time selling such apps outside of Google’s ecosystem. And that’s great.
It makes me wonder what Google’s perspective is on this. They’re an ad empire, and here is their product supporting a different revenue model. Are they worried about what the web would be like without ads, or even, without Google? Would Google start charging for their own apps if things went this direction? You have to evolve to survive on the web, and maybe even Google needs a plan for survival.
I’m currently developing a game using HTML5 technologies. I always knew I’d never put ads on it, so I assumed it’d just always be free. Though now I have to wonder. Can I sell it for a buck? It’s starting to look like it might be an interesting experiment.