There has been a lot of speculation about why Google might have killed Wave, Dick Wall from the Java Posse threw out the idea that it could have been too much bandwidth compared to any return they were getting.  Maybe it just go too expensive for them.

I find that hard to believe.  I think Google would have done their homework on the costs of servers and made that decision a long time ago.  They gave Google Wave the show at Google I/O 2009 and it just seems weird that they didn't expect a flood of people to use it.  Which brings up the next scenario, maybe they really got it wrong.

Sometimes, even the experts make mistakes and maybe there really wasn't a clear path to market for Google Wave and given all of the pressure from Microsoft, Facebook etc they decided to start focusing on things with a clear revenue path, so Google Wave got the axe.  However, this doesn't seem right either.  Why would they spend so much of their time working on side projects and then kill off one of the coolest ones.  They had clear marketing problems and most people had no idea what to do at the beginning, however, if you used it for more than 5 minutes and invited some of your friends in, you realized pretty quick it was a game changer.  Take it up a notch and invite your co-workers and your boss and you have yourself a fantastic team collaboration app.

I have an idea.  Google is preparing for a Tsunami.

The more time I spent with Google Wave the more I realized it had the chance to become the killer application for small-medium business who already use Google Apps.  For example, being able to collaboratively write emails, documents, spreadsheets etc, are all things that companies do now only the process is inefficient and clumsy.  If this was tied more cohesively into one product that allowed authoring, collaboration, chatting, real time editing, emailing etc, it would become the dashboard for thousands if not millions of people around the world. 

However, Wave is open source.  A lot of what Google does is open source, but nothing really close to the chest is, or at least not all of the pieces.  Since they created wave to be so open, it would be hard for them to develop this kind of product and change Wave at the same time. 

Maybe they killed Wave so that they could focus on creating Tsunami. 

This is pure speculation.  Clearly there are so many factors that go into these kinds apps and decisions, many are over my head but selfishly, I really hope I am right.  In my consulting practice Google Apps is a godsend to clients, but they all keep asking for similar things.  They keep asking for a unified view that marries, Wave, Docs and Email. 

I think Google knows this and if they don't... consider them told.