If Google’s acquisition of Writely has any of you Web 2.0 folk jumping up and down thinking the heavens are about to open up and rain gold, then sit down, put away your umbrella and take another Squash reality check.

Over the past week, I’ve read any number of blogs congratulating the Writely folk for selling out. But every indicator points to the fact that this was a dirt cheap deal and perhaps even a salvage mission.

Firstly, has it struck no-one as surprising that there has been almost no speculation as to how much Google paid for Writely?

That’s the first indicator that this was a teeny-weeny deal. When people sell-out in a big-money acquisitions, they usually can’t help but tell that trusted someone, who tells another trusted someone, who passes the word onto another trusted someone and so on until a pretty reasonable picture emerges as to roughly what was paid.

The fact that no-one’s bragging on this one, suggests that, well, there ain’t much to brag about.

More telling though is that I’ve been chatting to a company who is a significant player in this whole web-office space and they swears blind they’ve not even had a nibble from Google. Not a single call, e-mail or overture. Nada.

If this was a strategic acquisition from Google they would have scouted the playing field and this company would have been a part of that. So based on this information, Google ain’t out there looking.

First thing to take out of that fact is you shouldn’t expect a GoogleOffice any time soon. If Google is doing an office, they’re doing it in-house and that’s going to take some time. However, more so, this indicates that GoogleOffice isn’t a priority for the big G. Sure, the Writely buyout is an admission that they’ve got something going on in this space, but as I’ve speculated before I think it’s very much tied to the GDrive/Lighthouse projects and I don’t think anyone is expecting those to be rushed out to market anytime soon.

Salvage?

The second assumption you might draw from the fact that Google aren’t casting a net around is that it’s far more likely that the Writely crew approached Google, than the other way round.

I think there’s ample secondary evidence to corroborate this theory, too.

Google wrote on their blog that Writely had “many thousands of users”. Not tens of thousands of users. Not hundreds of thousands of users. But thousands.

Anyone who knows marketers know that if there are 10,001 users you start talking about tens of thousands. So lets be kind and assume Writely had 9,999 beta users. Other people in this market have told me that’s likely being generous.

The Writely business model appeared to be trying to tempt a portion of its users to pay a “reasonable subscription fee” for advanced features.

“ Our hope is to always have the basic service be free, with some extra features requiring a reasonable subscription fee.”

There wasn’t too much holding Writely in beta. According to its Beta Meter, 60 per cent of users felt it was time for Writely to rip off the beta label.

Now it’s all well and good to pretend that there’s a big, whopping market out there when you’re in beta but when you take a service like this live, you need to start walking the talk.

So let’s run some numbers. Let’s assume that Writely did a really, really good job of converting users to paid subscriptions and they managed to get 10 per cent of users to cough up some coin, which would be an impressive feat when you consider there are free alternatives out there in the market and there’s not a heap of value-add you can add over and above the primary product. Anyway, that gives us about 1,000 paying users.

How much is a “reasonable subscription feed”. If you look at paid services like Trumba or BackPack we’re probably talking about $50 per year. So best case, we’re looking at revenues around the $50,000 per year mark. We’re not even close to covering the four Writely salaries at those levels.

So if Writely was going to go it alone, it needed to raise VC dollars fast to fund a marketing campaign. You tell me any VC, even one who’s drunk a REAL lot of Kool Aid, who’s going to look at those numbers and see a great investment opportunity.

Best case option then for the Writely folk was to approach a company that they wanted to work for and hope for a HR-driven buyout. That looks to be exactly what has happened.

All this, and we should remember that as far as Web 2.0 consumer plays, Writely looked pretty good. The product was almost perfectly executed; it was good for generating a lot of natural buzz, such is the fascination with a possible MS Office killer; and it was an easy to use, easy to understand product that should have been relatively well-place to break through the wall of Web 2.0 freakazoid early adopters.

Yet, in the end, it almost certainly sold for peanuts. So go on and tell me again, how revenues models don’t matter in the Web 2.0 economy. Go on, please, it just gets funnier every time I hear it.