Google App Engine (GAE) is a cloud platform for hosting web applications. It does not like traditional web hosting, your web applications will run on Google Web Servers and you don't have to take care about server maintainance, administration. Google guys do it for you. It is launched April 2008 as free service but there are many limits and bugs in their plarform and API. They just have enabled billing for that service and will support more features.
Google App Engine overview

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