Is the Google Maps API price reduction too little, too late?

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Posted 25 June 2012 14:56pm by Patricio Robles with 0 comments

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Last October, Google introduced limits to the Google Maps API and unveiled pricing for users exceeding those limits.

It was not a happy day for developers and companies running popular services on the Google Maps API. The reason: Google's jaw-dropping pricing, which pegged the cost of every 1,000 map loads above 25,000 at $4.

Numerous large Google Maps API users dropped Google Maps like a bad habit in the wake of the Google's pricing announcement. This shouldn't have come as a total surprise. After all, even the best-monetizing companies on the consumer internet would probably have a difficult time finding a way to make the economics of $4 per every 1,000 map loads work.

Fast forward to today. Apple has its own mapping product. Google is naturally concerned, and it shows. So what is the company to do? Slashing prices on the Google Maps API would probably be a good start, and that's just what the search giant did on Friday as it announced that the price for 1,000 map loads above the free limit has been reduced to 50 cents. That represents a discount of more than 87% off the original $4 price tag.

What's more, Google also decided to treat all map types the same. Previously, excess loads of Styled Maps were charged at a different rate.

Thor Mitchell, the Google product manager who delivered the news, wrote "We hope the changes we're announcing today will help you continue to deliver the most innovative maps experience to your users." But that appears to be little more than PR spin.

The reality is that Google isn't trying to retain anybody. In its announcement, the Mountain View-based company noted that just 0.35% of sites using the Maps API exceed the limit of 25,000 loads per day, so this clearly isn't about pleasing existing users. What this is about: all the users that abandoned the Google Maps API for greener (read: more affordable) pastures.

Those users include companies like Foursquare, which turned to OpenStreetMap when faced with paying $4 for 1,000 map loads. While it's always possible that some companies will give Google Maps a second look, it seems more likely that former users will remain former users.

Certainly, from a financial standpoint, the Google Maps API won't kill Google. But there are more strategic implications here. This isn't the first time Google has upset developers with pricing and with the company reportedly set to launch a cloud services platform to compete with Amazon at this week's I/O developers conference, the search giant had better remind itself that in many markets, you only get one real opportunity to set your prices.