Why should you care about Google's App Engine?

Now that the announcement of Google's App Engine is official, it's opening up the company's cloud computing infrastructure as an API platform for Web application developers. Basically, it binds computing power, storage and database tools — much like Amazon.com's EC2, S3 and SimpleDB, respectively, but all tied together into one package. Plus, for the first 10,000 beta users at least, it'll be completely free up to a certain level of usage. What's in it for Google?

For starters, more Web applications mean more pages running Google-brokered ads. App Engine also runs on Google's preferred programming language, Python, not PHP or Ruby — meaning the developers of tomorrow now know definitively what scripting environment to work in, and the company's talent pool will grow. But ZDnet might have the winning theory: it will make the cost of acquiring startups much lower for Google.

Take YouTube, for example. The company succeeded partly on the merits of being able to keep its databases running. While other video sharing services wilted under their popularity, while YouTube remained online. But once Google purchased YouTube, it had to invest engineers and time into translating the company's backend into something that would work in their other systems. Next time, the transition will be nearly seamless.

So for the startup ecosystem, developers can either go Google or go elsewhere. And if they go Google and build something successful, there will be a threshhold of traffic where they'll be presented with two choices — either pay to play on Google's servers, or sell to Google. In any but the first scenario, Google is all up in your balance sheet. Doesn't look good for Amazon.com and Oracle, which powers Amazon's SimpleDB.