Meet the Next Members of Alphabet Inc's Billion User Club

By Sam

Source: Alphabet

When it comes to the web, no company has as many popular properties as Alphabet . Its mobile operating system Android, its browser Chrome, its streaming service YouTube, its digital storefront Google Play, its navigation service Google Maps, and its core Google search service each has at least 1 billion users, and its email service,Gmail, is nearly there (about 900 million people use it each month).

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Alphabet has its seven stalwarts, but an eighth service seems poised for mainstream success. Google Photos, the online storage service Alphabet launched in May, hit 100 million active users late last month. The rapid growth of Google Photos opens up moreopportunitiesfor Alphabet's core search service, and could even pose a threat toApple.

$10 a month or free?It's not surprising that Google Photos was able to amass such a large group of users in such a short period of time. With Google Photos, Alphabet is offering a vital service -- online photo backup -- for free. There's a resolution limit (16 megapixels for photos, 1080p for video), but Google Photos carries no price tag no matter how many photos or videos you upload.

Plenty of other firms offer similar services, but most charge monthly fees that can add up to hundreds of dollars over time. Apple offers 5GB of iCloud storage space free to its customers, but that's not enough to store more than a modest collection of images. For most, using iCloud for photo storage entails spending between $0.99 and $9.99 per month, and even at its highest tier, there's a 1TB limit. Amazon includes unlimited photo storage with its Prime membership, but that costs $99 per year, and caps video storage at a meager 5GB. Subscribers to Microsoft's Office 365 can use OneDrive to backup their photos, but that's $9.99 per month, and, like iCloud, caps out at 1TB.

Google Photos has other advantages -- most notably, its search feature. Google Photos users can search for terms like "bridge", "cat", or "Florida" and see relevant results. It uses facial recognition and GPS location to group related photos into collections automatically, based on people, places, and things.

iCloud does have the advantage of being integrated with Apple's devices -- those deeply entrenched in Apple's hardware ecosystem can have their collections follow them from one Apple product to the next automatically. And Google Photos doesn't support Apple's Live Photos, the iPhone 6s and iPhone 6s Plus feature that records a short video with every photo taken.

Still, Alphabet is offering a solid product, and the allure of a free service may be too hard to pass up. As Google Photos grows in size, Apple could lose some service revenue from discontinued iCloud memberships. It also has the potential to weaken Apple's broader ecosystem and reduce its customer loyalty. An iPhone owner reliant on iCloud is unlikely to switch to a rival platform when it comes time to upgrade; a Google Photos-using iPhone owner, however, could be just slightly more likely to consider Android.

More data for Alphabet to mineAlphabet has promised not to use images stored on Google Photos for promotional purposes, nor will it make them accessible in its search engine. Still, the service falls under Alphabet's general privacy policy -- it can use the data it collects in Google Photos to bolster its knowledge of users, and sell even more targeted ads. A library of photos can tell Alphabet what its users are interested in, where they travel, and who they associate with.

Given the value it offers, Google Photos should continue its rapid growth in the quarters to come, and it could soon be in Alphabet's billion user club.

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Sam Mattera has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares),, and Apple. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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