Yeah I agree, the rough approximation is Wal-Mart selling loss leaders to drive other higher margin sales. In the case of Google, we see they "sell" Google Docs

Yeah I agree, the rough approximation is Wal-Mart selling loss leaders to drive other higher margin sales. In the case of Google, we see they "sell" Google Docs for free to create network effects (and to erode the lock in of Office) and to cross promote other Google products. This is controversial but is hardly new in any industry. Yes I agree that after a company gains market power there is an incentive to raise prices but I dont think there are many (any?) examples of Google switching a free product to a paid one. You missed the point, Google isn't evil. Yes they make it difficult to compete but thats what successful companies do. The difference is Google does it by making simple disruptive products and prices them at their marginal cost. Google isn't a monopoly by any definition. Google isnt the single seller in any of their markets, Google doesnt compete in a market with high barriers to entry and Google isnt a price maker. Users (advertisers and internet service consumers) can easily switch to competing products and avoid Google entirely. Google is powerful yes, but they create value by helping their users keep their money. Google has never made any promise to anyone else other than their users.