Google to charge small businesses for Web-based Apps software

SAN FRANCISCO Fri Dec 7, 2012 7:37am IST

Coffee cups with Google logos are seen at the new Google office in Toronto, November 13, 2012. REUTERS/Mark Blinch

Coffee cups with Google logos are seen at the new Google office in Toronto, November 13, 2012.

Credit: Reuters/Mark Blinch

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SAN FRANCISCO (Reuters) - Google Inc (GOOG.O) will no longer offer its Web-based office productivity software free to small businesses, the Internet company's latest move to expand revenue beyond its core advertising services.

Google said on Thursday that businesses with 10 or fewer people will now need to pay $50 per user per year - the same rate that larger businesses pay - to use its Google Apps software which includes email, word processing, spreadsheet and presentation tools.

The change will let Google offer a more consistent service to business customers, the company said in a post on its company blog.

"Businesses quickly outgrow the basic version and want things like 24/7 customer support and larger inboxes," Google said.

Individual consumers will still be able to get a free version of many of the products, such as Gmail, Google said. And existing business customers who use the free version will continue to get it for free, though they will not receive the additional services included in the premium version.

More than 5 million businesses use Google's Apps, Google said earlier this year, though it did not distinguish between customers who use the free or paid versions.

The move marks the latest change to Google Apps, which until 2011 was available for free to businesses with 50 or fewer people.

In June, Google launched the Google Compute Engine, which provides online computing services to a limited set of customers.

Google, the world's No.1 Web search engine, generates the bulk of its revenue from online advertising.

Google does not disclose the revenue that its so-called enterprise business generates, but the company has signaled its hopes that it will become an important part of Google's overall business. In July, Google Senior Vice President and Chief Business Officer Nikesh Arora described the enterprise business as a "future growth engine" for Google.

(Reporting By Alexei Oreskovic; Editing by Chris Gallagher)

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