Google's revenue is very closely tied to the amount that people use the web in general. So much so, that they will make more money simply by encouraging people to use the web more. As a result, their strategy is largely to reduce the barriers to the next click and the next session, and thereby moving closer to the next Google search. Faster connections, faster browsers, cheaper devices, more ubiquitous access, etc.
It's almost like oil companies subsidizing the cost of cars to make more money. Reminds me of the start of the Michelin guide book, which was created to encourage people to drive to interesting places in France.
The same can be said of Amazon and their willingness to take losses on hardware just for the chance to get people into their content ecosystem. I've certainly found that, since getting my Kindle, I purchase all of my eBooks (used to pirate), and also use the Amazon store for goods quite frequently, whereas I previously had never used it.
The 'open internet' is often just a reverse walled garden. Things used to be locked down on your device, now they are locked down on remote servers where you couldn't even pry them out if you tried hard & ignored the law. (Unless you're the US government, in that case things have gotten much easier.)
The only advantage is that there is no middle-man between you and using any app (website) you want. But no company has ever tried to restrict web access on its devices, so where's the advantage?
And judging Google by its products: Google+ actually seems a lot more closed to me than Facebook (hardly any API?). Android itself is open source, but it is hardly about pushing the open web either. (At least it stopped pushing Flash)
While I don't entirely disagree with your point about the "open internet" being another kind of walled garden, there are definitely companies and organisations that have taken steps to ensure that the open web is actually "open," and Google is one of them. Evidence: https://www.google.com/takeout, which lets you export data from almost all of your Google services.
Some major innovations from Android have inspired sister projects for the open web, like http://webintents.org/
Also, I think you're misinterpreting the term "open internet" ; it usually means "open" for the developer, not the user. However, it's still better for users, as competition between open standards and technologies means that they usually get the best solutions (exceptions being things like h.264) This is certainly better than the classic walled garden where one company gets to decide what developers may or may not use.
In short, it's better because it's:
- unfiltered (mature content, etc.)
- unrestricted in terms of technologies used
- partially open for users
I would say they are more like a funnel. And they are trying to make their funnel even bigger. They make their money by sending you to other websites and services, which is why most people don't consider them a walled garden.
Their mail and calendaring apps sure don't, for example.
At this point Google is big enough that generalizing about how they make money is a bit pointless, because they have a bunch of different revenue streams. The only commonality is advertising.
Sure. They're way better than many about vendor lock-in, because they do realize that it's somewhat evil. Not to mention often counterproductive.
But that's not stopping them from signing deals to get Chrome drive-by installed on users' computers, say. Again, it's a big place. Some of it is still all about "do no evil", while other parts seem to be run by scumbags. Pretty good for a large corporation, all things considered, but not exactly all wonderful.
This business model is not new at all. That's what video games console manufacturers (except Nintendo) have been doing for dozens of years. Selling the hardware very cheap, at no margin or even "dumping it", to make money on the software licenses. Really, Google has not invented anything.
All consoles use the "cheaper razors, more expensive blades" model, but there is a big difference in exactly how.
Nintendo actually prices their gaming consoles above production cost (and probably above all-in cost) AND charges huge license fees to developers (and also has a huge first party developer userbase, unlike the other companies).
Nintendo is the company who maximizes profits, Sony and Microsoft at best maximized top-line and in reality just tried to maximize market share.
It's almost like oil companies subsidizing the cost of cars to make more money. Reminds me of the start of the Michelin guide book, which was created to encourage people to drive to interesting places in France.