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From my point of view, Gmail is still in beta because its contact list functionality is still broken. I have to switch to "older version" to add new names to a contact list successfully, using Firefox, and bizarrely when I use Chrome, I can't display my contact lists at all in "new version" mode. There are still some JavaScript mysteries to the implementation of Gmail that no one at Google fully understands.
its in beta because there is absolutely nothing for Google to gain by taking it out of beta
Customers just do not care about the things that keep developers up at night. See also: version numbers, license text, whether it is compatible with <insert any technology this question is ever asked about>, etc.
Customers care of stuff doesn't work. And if Beta Gmail stopped working they'd certainly care enough to call/email me all day crying bloody murder. What option am I left then considering it's only beta software, and free at that?

The beta tag has become like those "void where prohibited", "some restrictions apply", "limited warrenty" statements and the like. It's a cover your ass tactic that has almost no real world meaning anymore.

The only thing for them to gain now by leaving beta is the huge tech press/blog coverage the status change will get. Which they don't really need anyway.
Its more then anything a term of endearment. Gmail was the first app and the first beta app. And overall it still represents the hotbed of new features and design.
Exactly, just look at how the GMail mobile has changed over time. I wonder if that's one of the items on their secret checklist.

That said, GMail is also by far the slowest app of them all, it can take seconds to load. I hope they'll implement some kind of background loading sometime.

Some Joe Users now associate beta with a sort of brand. I once worked with a guy (who had no clue technically what he was doing) if I could take advantage of the "beta technology". When I asked him what that meant, he said, "you know, all the cool sites nowadays are using the beta!" When I pressed him further and had him sit in front of a browser and point to this beta technology, he finally just pointed out all the beta badges that the Web 2.0 sites were sporting.

So... maybe Gmail keeps the beta because now it's a brand association with being cutting edge and cool or something.

It's true that much of the population has no idea what "beta" used to mean. I had to explain it to someone the other day.

Perhaps we've passed the point where "beta" changes meanings in mainstream usage. Oh, well, at least it didn't go the way of the word "hacker".

It actually kinda went the opposite way...
Because they dont have 100 million registered users testing the Gmail app for them everyday YET!
I don't understand people's obsessions with version numbers.

When I release a project, I start at 0.01, then release 0.02, and so on. The version numbers mean nothing to me, other than that they are increasing.

I still have people email me, though, and say things like, "I saw your project Foo::Bar, when do you think it will be 1.0?" I don't really know what to say...

Not so much obsession as convention. Generally versions 0.x - 1.0 are the alpha and beta releases, with 1.0 being the first "stable" release. Obviously there are hundreds of projects that follow a different schema, but it's used enough that it has stuck. One solution if you want to keep your versioning style would be to annotate them as stable or development, possibly with a short paragraph explaining that version 0.0.3 is in fact bugfree/feature-complete/ready for use in production/etc.
Because version numbers are an implicit signal of maturity. The convention is that a 1.0 software release is complete. It's understood that it's not the final release, and it may still contain bugs, but it's a common signal to indicate "This is the first version of my software I feel is complete enough that I'm comfortable releasing in the wild."

Some applications have their own numbering conventions to indicate what kind of an update a new version is. If you're familiar with the software, it's useful to know at a glance what to expect. (The Linux kernel and gcc do this.)

You can ignore this convention, but you're going to encounter confusion from potential users.

Yet there's crazyness like Sun renaming Java 1.5 to Java 5, or Python 3 to Python 3000, or Netscape 4.7 to Netscape 6.0. Many of these are explicitly for marketing purposes, because a competitor had a higher version number.

It's moronic to compare version numbers across products precisely because standards vary so widely. I'd say that Django 0.97 was more stable than Rails 2.0, yet it's not even a 1.0!

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If you care so little about version numbers, why do you start at 0.01? Why not just start at 1 and save yourself the three characters?
Convention.
However you don't like convention when it comes to what 1.0 means?
I don't like the convention where I have to decide whether or not something I write is suitable for other people. They should read the code and decide for themselves.
Or start at 0 --- for geek cred.
What do you mean take it out of beta? The name of product is "GMail beta" ;-)
Must be a slow news day..
I think they keep it in beta because it hasn't become the app they want it to be yet. Google wants the end all email client not just a better alternative to hotmail/yahoo/msn et cetera.
In that regard, Google Search should be beta too.
it's in beta because they are still working out how to charge for it. When they do, it will be 'released'. My guess is they will charge for POP3 access and other little luxuries.