Google's New Gig

Google's (Nasdaq: GOOG  ) giving thumb drives the finger.

The world's leading search engine announced that its free Google Docs accounts will soon be able to upload files of all types. The files can be as large as 250 megs, with total available Google Docs storage clocking in at a cool gigabyte per user.

In case you don't speak in specs, let's break this down into real-life applications. You know those times when you've used a USB drive to download work files to take home with you? How about the time you saved a photo album on an SD card or burned them to a CD to take to your parents? Well, these are times when the cloud -- more specifically the Google Docs cloud -- can be your friend.

Google Docs used to be limited only to the application files it could chew on once it converted them into spreadsheet, word-processing, and presentation files. Now it's become your personal -- and free -- thumb drive.

Google isn't the first company to offer limited storage for free. Microsoft's (Nasdaq: MSFT  ) Windows Live been offering a beefy 25 gigs of free storage through SkyDrive for nearly two years. However, this latest move is notable because it's Google.

It's been nearly four years since Google inadvertently leaked the existence of GDrive, an unlimited data-storage solution. There's obviously a big difference between infinite storage and a mere gigabyte, but this development is clearly a step in that direction.

When Google moves, other companies tremble, so who's quivering right now?

Amazon.com (Nasdaq: AMZN  ) may be a logical victim, given the company's S3 data-storage service. However, Amazon provides heavy-duty storage for techies. Google isn't going to be making a dent here with its storage restrictions, even with the ability to purchase additional storage cheaply.

Online data storage and cloud-based hard-drive backup services may feel a little nervous, but again, Google's free gigabyte limit is going to be a dealbreaker.

The real victims here will be physical storage providers, particularly the makers of memory cards, small USB drives, and CD-Rs. SanDisk (Nasdaq: SNDK  ) just got served. One also has to believe that the ability to share these files with friends may also simplify piracy. That would naturally hurt music and movie companies, though the file-size parameters may keep the distribution of larger video files in check.

On the opportunity side, portable connectivity will be more important than ever, since users will need to be confident in the ability to upload and download their files. This will be a win for mobile broadband specialists Novatel Wireless (Nasdaq: NVTL  ) and Sierra Wireless (Nasdaq: SWIR  ) , with their USB modems and particularly their mobile hotspots.

The biggest winner of all will naturally be Google. A gigabyte is a small price to pay for constant access to a grateful user. Loyalty is invaluable these days, so Google may as well make its sites and services as sticky as possible.

Would you use Google Docs for file storage? Share your thoughts in the comments box below.

Microsoft is a Motley Fool Inside Value pick. Google is a Motley Fool Rule Breakers selection. Motley Fool Options recommends a diagonal call strategy on Microsoft. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz still uses Google a lot in his daily life. He owns shares of Novatel Wireless and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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  • Report this Comment On January 13, 2010, at 11:28 AM, mdtopper wrote:

    Yes

  • Report this Comment On January 13, 2010, at 5:30 PM, Fool wrote:

    The Google Docs option is nice as I won't have to keep searching for some solution that requires collaborators to download an application (Pando and such) or bombards them with ads.

    However, the premise of your article that it deals a blow to storage companies and helps wireless companies is farfetched. USB drives provide instant access to information wherever you are. You don't need internet. You don't need to enter passwords on others' computers.

    If I had to decide between a $10 USB drive and a wireless broadband subscription, there's no contest. It's nice to have options, but not only is this offering from Google just one of dozens of existing services, its wider impact I think is really quite inconsequential.

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