I don't know how can they compete with Google on this. They have to offer their product for free. They can't place ads on user's pages, because Google does not require this. Google makes money off the users that do put ads, but this is only because they are the ad network too. Weebly can't make money off them.
I just can't see how Weebly can win. In theory they could get so much better than Google that Google (or Yahoo or Microsoft) buys them because of their loyal user base and better product. This is pretty much the Youtube story, but Youtube at least had the potential to monetize without Google, which is not the case with Weebly.
I like the product and as long as they have funding and users I can see them going on to be a player in the market. I don't believe there is not room for a lot of players in the market. They make money from domain name sells as far as I can see.
Perhaps this is a case where Google uses its position in advertising to achieve domination in other markets. Domain sales just can't be enough, and funding is not a long-term way maintain business.
I do think they are a nice acquisition target for Yahoo or Microsoft, though - both having their own ad networks and no similar offering, it makes a lot of sense for them to buy Weebly and integrate it with their advertising platforms.
What's the competing Google product? Google pages just lets you make a page AFAIK. Weebly lets you make a whole website and manager the various pages and how they link to each other.
I'm actually quite impressed with Weebly's usability. My mom asked me to help her make a website, so I pointer her to Weebly and she was (almost) able to do it all herself.
I just can't see how Weebly can win. In theory they could get so much better than Google that Google (or Yahoo or Microsoft) buys them because of their loyal user base and better product. This is pretty much the Youtube story, but Youtube at least had the potential to monetize without Google, which is not the case with Weebly.