Google Drive Is Fine and That Doesn't Matter

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NEW YORK (MainStreet) -- I guess you could call me The Digital Skeptic. (You'll have to imagine the trademark symbol after that.)

See, during the valuation hype surrounding digital darlings such as Facebook, Instagram and Pinterest, I thought maybe -- just maybe -- someone should be wondering aloud if this whole digital economy thing is not going to pay off.
No matter how clever Google Drive is, when you take a look at the market you'll see a flood of competition will likely strip it of any real value.

So I took a flyer and trademarked the term "The Digital Skeptic." It's as good a phrase as I could think of to describe my dim view of the prospects of the digital age. And I sat back and waited for something that called out for a skeptic's view.

Sure enough, this nutty digital age has served up a singularly bizarre business idea: Google Drive, the search giant's online file sharing and syncing tool, which debuted earlier this week.

I have spent the past few days testing this service -- you get 5 GB free, and 25 GB costs $30 a year -- that enables sharing and updating of files, photos and other digital information across PCs, Macs and many mobile devices. I have also surveyed the syncing and sharing competition and compared their features.

What's the best way to describe Google Drive?

"Just like the Loch Ness monster," was the way Sundar Pichai, senior vice president for Chrome and Apps at Google, introduced the service in the company's official blog. Pichai, of course, was referring to the fact that Google Drive has been rumored for years but hadn't yet actually surfaced in techland.

Certainly Pachai was joking, but to me, the metaphor is dead on: Google has jumped into a market so flooded with options that it is essentially in no market at all.

Makes the Loch Ness monster look logical
I understand why Google felt it had to have some sort of syncing and storage business: Heaven knows how, but storage and syncing have become sexy.

Market leader -- and soon-to-be IPO darling -- San Francisco-based Dropbox has been openly taunting Mountain View, Calif.-based Google since back in 2011. It raised a serious war chest of $257.2 million from A-list investors such as Benchmark Capital, Goldman Sachs and Greylock Partners. That kind of cash, in turn, legitimized a flurry of other syncing and storage wannabes: SugarSync, Box, Wuala and SpiderOak. Tech blue chips followed. Microsoft tweaked its online storage offerings, based around SkyDrive, by adding something called Windows Live Mesh. And of course, there's Apple , which just cannot stop hyping its iCloud content-sharing tool.

Storage, storage everywhere
Sure, most of these services mostly work. Dropbox, in particular, is a decent way to keep all your files on hand wherever you go. The issue with syncing and storage is with the competition: There is no end to it. This sector dangerously flaunts Warren Buffett's critical investing maxim: "In business, I look for economic castles protected by unbreachable moats."

Buffett likes things, utilities or railroads for example, that have serious barriers to entry. That certainly doesn't exist in the storage and sync market. Everyone can, and does, offer this service.

Known document collaboration players such as Google, Microsoft, Zoho and Sync.in offer fairly powerful document storage and sharing. Security companies such as Symantec , online collaboration tools including LiquidPlanner and data backup players such as Carbonite and Mozy all feature rich backup and sharing products. Even retail giant Amazon , with its Kindle offering, has sophisticated document storage.

And that's just software companies. Legions of hardware makers now toss sophisticated sharing, storage and content tools into their machinery. Cisco , HP , Lexmark and Xerox , just to name a few, now have content storage and exchange services built into their devices as a gimme to drive sales of routers, servers and printers.

Want to get a feel for the utter endlessness of the storage and sync world? Try this industry map a fellow named Robin Good cooked up. It graphically lays out all the collaboration tools he could find. I stopped counting after 200 companies, and this is by no means a complete list. Each and every one of these offers at least some form of content syncing, collaboration or file storage, or it would be dead easy for them to quickly add the features they don't have now.

Not a moat in sight
Google Drives over the edge.

Google Drive is a reasonable file sharing and syncing service. 5 GB of storage is generous -- you can even get 16 terabytes of storage if you desire; it can sync most any file across PCs, Macs and mobile devices; and Google Apps users will find it handy, if a bit of a pain to migrate too.

But it won't matter. No matter how clever Google Drive is, there is nothing to stop any digital Tom, Dick or Harry from setting up a competitive syncing and sharing service. And that, friends, means syncing and sharing will eventually devolve into a free, profit-starved service.

Google Drive, Dropbox and all the rest are nothing more than vortices spinning in a draining tub. Fascinating to look at, fun to put your finger in the middle of. But in the end, nothing of substance drives the action.

If that all seems terribly skeptical, well, that's me, The Digital Skeptic. (Trademark.)

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