Google announced the death of Google Reader in July of 2013. Google Reader is/was a free RSS news reader that syncs/synced among just about any platform or device. The appropriately named Dave Winer says “Next time, please pay a fair price for the services you depend on.” To all the Dave Winers of the world, I literally paid for Google Reader with my eyeballs. Look at Google's a look at Google's financials. Google's cash cow, as in about 95% of Google's profits, is advertising. Much like broadcast TV, anything Google does to draw eyeballs brings in advertising revenue. Google Reader brought my eyeballs to Google, and my eyeballs were not alone.
Other companies provide free interent services that are also not “free”. My eyeballs similarly pay for Facebook and news sites. My ears pay for the free versions of Pandora and Spotify. My iPhone, iPad, and Mac purchases pay for iCloud. My Windows and Office licenses pay for Windows Live Mail (formerly Hotmail and rebranded as Outlook.com). All of those free web browsers we love are paid for with out attention. Fremium services make money by encouraging free users to become paid users; I used Evernote for free for about four or five years before becoming a Premium paid member, and for the first time last year, I donated to Wikipedia. These fremium services make money out of their popularity, and using the service makes them popular.
For a giant company such as Google, there is also the notion of goodwill. During a time when everyone was annoyed by Yahoo search and the Ask.com butler, Google came into the search market with a very simple and effective web search page. While the other big internet companies were stumbling all over themselves in sad attempts to provide services, Google giave us Gmail, Google Calendar, Google Maps, Google Docs, the desktop search bar, Picasa, the Chrome web browser, and Google Reader. In return, we gave Google two thirds of the interent search traffic. Axing popular services like Google Reader chips away at the goodwill that Google has built over the past decade and a half. We are already questioning the longevity of Google's other free services. We do not know how much Google Reader cost Google, but certainly Google will pay a cost for killing it.