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back to article Baby Googles: The answer to the Chocolate Factory dominance?

Lawyer Jeremy Phillips of the useful and fun IPKat blog floats an interesting idea. Google won't reform or be chastened, he writes. We should consider breaking up Google into a number of "Baby Googles" – just as AT&T was once broken up into a number of "Baby Bells". He writes: "It is effectively impossible for any other …

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What?

Did he just compare Gmail to mouldy bread, and then go on to say that it would be somehow be a better product if we paid for it?

Someone will *always* copy anything anyone ever does on-line and "sell" it for free (see: film/music distribution) and that will never change.

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One of Google's less savoury revenue sources.

Piracy alone hasn't crippled the entertainment industry; to get an organised piracy system going, you also need something that makes the piracy profitable. Enter Google.

If AdWords accounts were properly policed to root out these providers, we would see a drop in availability of illegal downloads, but also a drop in Google's revenues.

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When are they going to let us submit titleless comments?

I think you're missing my point (or I expressed it poorly)

If Google, Yahoo!, Hotmail, AOL, and what-not all started charging 1p for each email your sent, then they would lose users faster than sinking ship. Ah, yes, but where would they all go I hear you cry? Well, I'm pretty sure that some enterprising person would happily welcome them with open arms, be that Facebook, their ISP, or some new kid on the block.

People love free, and the Internet is FULL of it. Most people don't even realise that Google scan their emails to target adverts at them, and if they did, they (like I) really couldn't give a toss, because it's a small "price" to pay.

Don't forget, a LOT of people get a kick out of providing a product or service for nothing (just look at Twitter, or heck, even Linux), it looks good on their CV, or perhaps they think it'll help them in the afterlife, who knows.

One thing's for sure though, Gmail isn't mouldy bread. It's not even bread

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It's so wrong to do this

What is the point in anyone being successful and having the drive to create a large company? It'll just be shut down/split up for being better than the competition...sorry I mean being anti competitive.

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Wrong

It will only be shutdown/broken up if it acts illegally or to restrict free enterprise*.

This is why MS go spanked and Apple has (so far) been left alone. One was a monopoly and acted illegally, the other wasn't.

You can argue that Google has a monopoly on "web search" and a few other techs. Whether or not it has acted illegally is up to the courts. Google has a choice:

--- Re-organise/re-structure to avoid the accusation; or

--- Fight it in court

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*There are exceptions; cartels such as BPI, RIAA and MPAA who actively engage in restrictions on trade with impunity. And no, I do not mean cracking down on pirates. I mean, restricting free trade.

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Happy

Crux of any business model likely to succeed against Google/Facebook

Privacy. Offer equivalent services at a low, low price and guarantee complete data privacy (within the law). No processing of user data, no selling on of anything. No advertising.

Just your data, just your eyes, and your choice what man and dog gets to see.

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Paying for internet services

This already exists to some point... There are paying services out there, that are used by companies who don't mind spending money and like to have technical support. I understand you can even get support from Google if you pay for it.

But unless you find a way to make them illegal, there will always be free email on the web, and it is very likely that the general population will flock to it. And THIS is what Google is good at, not making people pay for its services.

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You're ignoring stickiness issues

To the extent that how-to-reach-you is who-you-are on the internet, paying a few pennies for email is not going to change things, because the cost of changing is somewhat high and in-your-face, and the benefits are small and distributed over time.

You would need the internet equivalent of phone number portability. Even that isn't enough, because the Big Boys (no surprise) are working hard to keep your content (your interactions) stuck with them. In graph theory terms, even if the nodes are portable, Google and Facebook (and LinkedIn, etc) own the edges.

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Unhappy

It's not the free thing that matters: it's the (lack of) compitition.

I'd believe your argument if it wasn't for eBay: they take cash from both sides of any transaction, plus their PayPal dividends, and yet they still plaster ads all over the place: get every cent possible is the target, permitted by their effective monopoly in small p2p sales. From their T&Cs: "Our primary goal in collecting personal information is to provide you with a safe, efficient, and personalised experience" Ah yes, personalised ads. Just like google, just like facebaook, except this time with your money too.

So yes, free sites must have some revenue stream else they'll not be their for very long, but don't imagine non-free is a cure for the ills of google / facebook et al. Viable alternatives who are prepared not to play the same game are required for that.

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I'm not so naive as to assume that Facebook and GMail are truly free.

Somewhere, somebody is paying for it, obviously. Is it costing me money? No, so why would I care?

No one cares enough about these services to want to pay for them, so the chance of setting up a viable business model based on subscriptions is practically nil.

Then again, plenty of people fork over good money for something like SkyTV, so I may well be completely wrong.

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@Lamont

"Is it costing me money? No, so why would I care?"

Because it costs you? Even if you value your privacy at zero (and it seems you do), it still costs you.

Company pays for ad.

That cost is recouped through prices.

Customers pay those prices.

You are a customer.

You have paid (in part) for that ad monetarily and by giving you privacy away for free.

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@BigYin

Granted, companies will always have advertising budgets, and I will inevitably consume adverts at some point, be it actively or passively. But I can live with that (twas ever thus).

As for privacy, nothing particularly sensitive gets passed through either my facebook or gmail, so, yeah, I'm still happy (the ads I get served by facebook have so little relevance to me, I have to wonder if facebook system is really working!). The vast majority of people most likely couldn't care less, I expect.

I may well be ignorant, but I am content, and so very unlikely to abandon these services for a paid alternative - if paid were the only option, I'd just as likely abandon them, altogether.

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Anonymous Coward

and then companies hire people

to do the ads, and them in turn hire people who does IT and then you got your money back...

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Grenade

The author conveniently forgets to mention

that in order to be subjected to dismantlement by regulation, a real monopoly must :

1- have a dominant position in a market

2- show positive signs of clearly abusing that dominant position against competition that in the end will hurt the consumers.

Number 2, my friends, is where Microsoft and Intel are two notable examples while Google lags far behind. It only takes to read the internal emails at Microsoft as made public in the court battle famously known as Comes vs Microsoft in order to see Google has still a lot of way to go before becoming that evil.

This is nothing but a new strategy from Microsoft which can be translated as "yes we did some bad thing but we're sorry (honest) and more than that, look there are other doing it too".

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Anonymous Coward

How do you know this?

You have insider information into Google's business?

Comes vs Microsoft revolved a lot about how Office was using undocumented APIs in Windows for anticompetitive advantage.

In these days of the loosely coupled Web this almost seems as a joke because that's what almost everyone is doing. The open APIs are few a far between and almost the whole platform relies on undocumented calls to the backend.

To make matters worse Google even made it's browser secretly use it's own HTTP replacement protocol SPDY when contacting it's servers so it appears to be faster. SPDY so far as not been standardised and Google has only provided an incomplete draft specification.

And this is just on the technical side...

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FAIL

Oh hang on a minute

Outside of tech circles nobody cares. Some US grubbymint folks want to have a pop at Google because it's a bit too big and anti establishment for their liking, if they can't tame the horse they try to shoot it. Joe Sixpack on the streets of Buttsville, IL, will only care about it when some lamentable old crone on CNN tells him it's tantamount to terrorism.

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Advertisers care

Google's monopoly on search advertising is massive and damaging.

Just look at the impact of local media in the UK. Revenues now flow via tax havens to California with Ireland saying 'thank you very much' to the VAT. Google's corporation tax payments are negligible. Competitors cannot compete with Google's market and technical dominance - even Microsoft, with its billions, cannot compete - if you've ever compared both the capabilities or coverage of Bing/Adsense and Google/AdWords you'll know exactly what I mean.

What is the public benefit derived from Google does sucking advertising and tax revenues from the UK to California? Yes, Google executes its business model brilliantly, but so would five Googles, all competing, innovating and reducing prices. Maybe even a British or European Google?

Google is a tax on the web and industry (plumbers, nurseries, retailers, banks and many other businesses all fund google) and UK plc does not see any meaningful amount of that supernormal revenue stream. Those gargantuan profits are paid by all of us, the money doesn't come from nowhere.

Now, in the time until break-up, the French establishment have had an interesting idea the UK should consider. A specific tax on internet advertising. Watch Google's lobbyists go crazy. Google is a big, dangerous 21st century Yellow Pages, but Yellow Pages is all it is.

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Anonymous Coward

"what was the point"

How soon they forget?

Voicemail and fax technologies were suppressed by AT&T. Long distance dialling was expensive long after the technology got cheap.

AT&T had awesome R&D and yet constantly and consistently smashed any attempts to innovate it's product line (either internally or by third parties).

Without those few years of poor service and confusing options, there would almost certainly not be anything remotely resembling the internet we know and love today.

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Big Brother

Destroy all monopolies

Oh dear, where to start. Clearly we'll need to dismember Microsoft, Google and Facebook. And then we can get rid of copyrights and patents. Then there is the issue of land ownership, given that they've stopped making land. Then we have roads and other utitilies where natural monopolies exist because people won't pay to have half a dozen companies lay water/gas/electricity pipes to your front door. All examples of what economists call "rent seeking activity". And don't get me started on the requirement for legal tender taxation.

But it seems more self interested than principled, if not downright hypocritical, that Andrew keeps on about the Google monopoly which he sees as unfair while he's so clearly in favour of promoting the copyright monopoly which protects his journalism, regardless of the fact that this goes far beyond the terms needed to encourage creative output.

Big brother icon because that is how the Mandelson's Digital Economy Act is proposing to enforce copyright.

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YouYube!!!

Hee hee hee

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FAIL

Someone!

Someone buy this writer an Ergo (split) keyboard!

"YouYube" :P

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TV and Internet compared

US TV traditionally ran on the "free with adverts" business plan. OK, the result was rubbish but nobody seemed to care.

The Internet will be the same. Users will complain incessantly, but won't cough up their dosh.

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Marginal cost

As usual when you talk about there-is-no-reason-this-or-that-should-be-free, you are ignoring , you are knowingly ignoring basic economics.

Why don't we EVER see you acknowledge marginal cost issues?

The very simple fact is that if something COSTS zero (or very near zero) to provide to one more user, like for instance an article written by A.Orlowski, then the economic pressure and natural behaviour is to price it at (or very near) zero.

Any other price risks being undercut by someone else who reasons that by going 20% cheaper, (for equivalent quality, which, yes, is not always meaningful) they'll get all the market share and thus much more money than by keeping the price high.

Of course, it does lead to the problem that A.Orlowski needs to eat, and that the fact that one more reader doesn't cost anything beyond a few kilobytes of data transmitted doesn't mean there's not a real cost for the overall readership.

But that's precisely the problem.

And just saying that things shouldn't be free and let Google make us pay is just like saying that houses shouldn't burn and let the government forbid houses from burning.

There has to be a way, but it's not just "yeah, the management at Google is so lame, it's so easy to just decide to make us pay".

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And having us pay would probably REINFORCE the monopoly

Plus, actually Google making us pay would probably reinforce the monopoly rather than weaken it, if done right.

They'd probably make us pay for the overall Google experience if they're clever. That means we'd just HAVE to pay, more money to them to forge ahead of competition, but no competition could undercut them, because frankly, once you pay £20 a year to get full access to all the Google property, do you seriously think that it allows the Next Grat Thing from a start-up to emerge and make money out of?

Like, imagine, you're paying that £20 for google mail, maps, earth, search, photo storing, chat, voice, phone, blog, sites, browser and more.

Now, I come with that bright idea that makes mail better. Will you stop paying Google? And because you can't, you probably won't be willing to pay me, so you'll be ok to switch to that new mail service, IF it's free, since you already pay for your mail in a package anyway.

(yes, of course, that would lead to lots of antitrust issues, but that'd still be the rational thing to do for Google. Let's go on crushing the competition, we've got 10 yeas before the competition authorities catch up and the problem will have changed by then anyway)

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