Google has a nasty habit of cannibalizing others' businesses based on its own seemingly unassailable lead in search and online advertising. The problem is that each time this involves giving away free software and services to undermine competitors at the expense of growing its own. Or can Google make a business from giving …
A modern day water dictatorship
If you're a ruler, the simplest way to keep the plebs under control is to give yourself (and enforce) the power to allot some vital resource. Someone does you a favour? Give them some more. Someone honks you off, cut off their supply.
We've recently seen Russia do this to some ex-USSR states and their supply of oil and natural gas.
In times gone by, the ruler used water as the subjugating force. Without it, crops died, farmers went broke, people starved.
The neat thing about this technique is that you don't need a large army or internal security force to keep yourself at the top of the pile. You only need enough power to control your resource and everything else follows from that. The bad thing is that because you don't have a strong army or defensive force, while you can control internal threats you are very vulnerable to external ones. An invading army will have little trouble taking over as what forces you do have are not used to conflict: they're used to people doing what they're told.
Historically, water dictatorships seem invulnerable when viewed from the inside but their fall is inevitable.
So it is with Google. They have a firm grip on the internet's jugular. They control who gets the eyeballs that makes the advertising pay the rent. They don't need to be competitive, or innovative. They just need to batter competitors to death with their giant wad - and if that doesn't work, turn off the eyeballs. However, as soon as someone comes along who is NOT dependent on advertisements or search hits they're screwed.
The question is who, what and when.
What Google is doing now is merely what others have done in the IT arena before it.
The difference is that we can get our water from different sources and the moment that Google does enough to make society turn its back on Google ... another company will be waiting in the wings. Another service, which has chugged along with no reputation to speak of, will get the traffic.
Such is the power of international communication ... changes like that could literally happen overnight if what Google did was bad enough.
At least in this game, they are not the only supplier of water and never will be. Personally, I use Yahoo for my primary searches and only turn to Google when I haven't found what I want in the first few pages. At least I can be a little more confident that, even though I'm still probably being spoon fed results ... I have the choice over which spoon :-)
Can you name some?
[Some people mention Israel's wars as "it was really about water" but that's just not true; though later conflict may come for that reason, it hasn't happened there yet.]
@Marvin the Martian
Try searching (or googling!) for "Hydraulic Empire" or "Hydraulic Despotism"
Who controls the spice, controls the universe. ;)
Couldnt agree more
Google do need to develop other revenue streams other than advertising. In the long run you can never be sure of what may happen and diversiification of revenue streams is always a good idea.
All monopolies come to an end all you have to do is look to some of the rumblings at the core of the Walmart business or to News International in the UK.
"Or can Google make a business from giving competitors fits?"
Blackmail would seem to be the obvious way forward?
Thease are monopolies?
Wow, I didn't know Wal-Mart or News Corp. were monopolies either globally, or in any particular market.
Perhaps it's because I actually know what a monopoly is?
noun, plural -lies.
1. exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices. Compare duopoly, oligopoly.
In these cases, the important part is:
"or a control that makes possible the manipulation of prices."
Another GCSE economics expert
Now, go see what the legal definition is.
They don't control exclusively ads or search, people seek their search out of their own volition because it is good for them and content producers put google ads in their pages because it is good for them.
Everybody wins and no one is locked into this system.
What price control?
Google has exhibited no ability to control prices, little ability to influence prices at all, and no ability to charge consumers for much of anything. Pretty much the opposite end of the spectrum from monopoly.
I've switched to G+ and so far have managed to tempt across about 25% of the people form my Facebook friends list - roughly 40% of the people who I had email addresses for to send the G+ invites to.
Of those who've switched, they all seem to be expressing a like for G+ and its friendlier feel and better control over who sees your posts and info. I'd even go so far as to say they're vastly preferring it over Facebook. I've noticed those people have started posting almost exclusively to Google now and their Facebook activity has died off.
Obviously this is just a small sample set of people I know, but this switch has taken place in less than a week. It took about 2 or 3 years of people telling them they needed to be on Facebook for many of these people to even get around to signing up in the first place, yet a single invite to an alternative service has made them jump ship almost immediately. Maybe this is more of an indictment of what Facebook has become than praise for G+, but there have been a number of comments about how much 'friendlier' G+ seems to the beginner. Also, the recent changes to Facebook's Chat function seems to be really annoying users who are seeing absolutely no benefit to it and can see Google's chat is much simpler to use.
As always, your mileage may vary :)
I've been trying...
...to get a look at that but it seems to be closed off. I take it they've also stopped new invites as well. Facebook has turned, for me, in to an ad-hock channel, more like a Twitter feed than a full on social experience. It would be good to see what Google are getting up to but I'm just going to have to wait.
Is it friendlier because....
...they've kept out the riff-raff.
When you read ranty blog and YouTube comments, you wonder how these people even know how turn their monitors on. They don't deserve the internet. Perhaps there should be an entrance exam to use G+.
Re: I've been trying...
I'm still managing to send out invites OK here. Everyone who took up my invite has immediately been sending their own invites out without a problem. If you know anybody who already has an account, ask them to send you an invite. :)
A garden of pure ideology, indeed.
Who need diversity, anyway? It's just a load of other people who are wrong.
"Facebook has turned, for me, in to an ad-hock channel, more like a Twitter feed than a full on social experience"
The Facebook you see is entirely based on your friends. It's not Mr Zs fault that your friends bore you, and they will be just as bad on Google+. Perhaps if you remove 75% of your "friends" from the list of hundreds you may get more useful stuff on your wall?
Just one thing to remember...
You are NOT their customer...
You are their PRODUCT.
No, you missed one. "Cannibalizing others' businesses" is Google's THIRD trick. Google's SECOND trick is "content theft and enabling and abetting content theft".
Any examples yet?
No? Didn't think so! (Mine's the one with an A to Z in the pocket. So, *obviously*, I'm forced to steal something in every street.)
"No? Didn't think so!"
Examples of stealing others' content? Google books? Youtube? I think two is enough.
Not good enough.
There is no special legal exemption for Google. They do remove videos, soundtracks etc. on YouTube just as anyone else would have to do. Google Books? Only public domain works are available in full. Snippets of copyrighted works are, arguably, fair use (unless you think quotation is some sort of infringement of an author's rights?)
Snippets from copyrighted works are still copyright. Especially if as google you are using then for commercial advantage.
Public domain works are in the public domain, 'tis true (unless you happen to be Japanese), but "orphan works" are not (or did we forget about those?).
So nobody can legally sell a book, newspaper or magazine that quotes anybody else's work? Utter cobblers!
"Snippets of copyrighted works are, arguably, fair use (unless you think quotation is some sort of infringement of an author's rights?)"
Just checked on Google books, and my book (released last month), vastly more than snippets as far as I can tell, is available on Google Books, without me, as joint copyright holder, being notified, never mind asked, as is legally required. That's copyright infringement.
Why should I have to inform Google that I don't want them copying my book?
"So nobody can legally sell a book, newspaper or magazine that quotes anybody else's work? Utter cobblers!"
Sure, they can But in order for Google to offer you the particular snippet you want they must have -- for commercial gain, presumably -- copies the entire work and stored it, which sounds like commercial copyright theft to me, unless they got the copyright holder's permission BEFORE doing this. Note that this includes orphan works in the rest of the world, and even in the US, regardless of what pretend agreement they made with publishers associations in the US. (I fail to see what right publishing associations in the US have over even US orphan works, never mind those of the rest of the world.)
Fair use doctrine.
No case there.
I don't know if you are replying to me...
"Fair use doctrine, no case there".
1) I don't live in the US. No fair use doctrine in UK law. US law =/= world law.
2) Fair use doctrine does not allow the uploading of complete chapters of my book to a server and then displaying ads next to them to make money off my content without paying me.
No question that the tech nexus of Google, Microsoft, Apple and Amazon are circling each other, thrusting and slashing trying to take off hunks of each others core businesses.
Bing goes after G search. + goes after FB. Amazon attacks iTunes, etc
It's a great show that has but one beneficiary. Us! Competition is good. I don't care who 'wins' All I know is these new products and services are overall, quite spectacular and together are moving tech forward at an amazing pace.
May the best one(s) win!
No, it doesn't benefit us.
Because if we win, they lose, and that ain't gonna happen.
Instead, the big beasts will eat each other, until there is only one - or at least, until whatever is left can act as one. Then the surviving entity no longer needs to court us, and can continue with the original game plan of exploiting us.
If we win, they lose?
Care to compare the smartphone offer from say, four years ago with now? I'd say we are getting more, and for less.
And Google might have a quasi monopoly on search; but that is because they are working hard to keep it. If the current Bing had existed 10 years ago, it would have kicked the ass of the then Google search engine. I don't mind having people working overclock to let me find stuff on the web more easily.
"And Google might have a quasi monopoly on search; but that is because they are working hard to keep it. If the current Bing had existed 10 years ago, it would have kicked the ass of the then Google search engine."
If Windows 7 had existed 10 years ago, Apple would be a footnote today. Hell, if the Nazis had smartphones and the Internet in WWII, D-Day would have been a total flop.
Is this where Godwin's law is invoked?
Only if Eisenhower was a teenaged girl with a Facebook account and Bradley Manning was assigned to SHAEF.
Also, if Biblical Galilee had smartphones and the Internet then Mary might have been better informed about her family planning options, and Joseph could have seen her "It's complicated" status and steered clear.
And maybe if 18th Century French dandies had smartphones and the Internet then the Marquis de Sade would have been a hopeless porn addict, compulsive masturbator and sufferer of terrible RSI pain.
Missed my point, I think. The point was, Google is getting better all the time because of the competition. So it is good that there is competition.
oh come on
Facebook did not invent the social network.
Apple did not invent the touchscreen smartphone.
Both companies improved on what came before. Are you saying that IOS/facebook are the height of perfection and that nobody else can even try to improve on them?
Re: oh come on
As was mentioned by a reg article last week, being a little better isn't necessarily enough.
Both iOS and Facebook were dramatically better than their predecessors (winmo, symbian) in every way that people cared about. Switching was a no brainer. What isn't going to take the world by storm is a 'me, too!' product that improves on the alternatives by a little bit in a few areas, especially when there's a large, entrenched and relatively happy userbase.
This particular failing is hardly unique to google though. Look at what Microsoft have been trying to do for the last few years. At least Bing has the advantage of being a painless alternative, unlike (say) google+ and silverlight, which require an investment of time and effort to take part in a much smaller ecosystem.
Re: Re: oh come on
I think what Google have done though is capitalise on the dissatisfaction of Facebook's userbase. Most FB users are only there because their friends are, and given a choice they'd prefer to use a different service. One where they can understand the privacy controls a little better, and can understand the chat features (which are much like the FB chat used to be).
It's not just about making a better service, it's as much about making a less bad service. :)
Re: Re: Re: oh come on
"One where they can understand the privacy controls a little better"
Oh I understood the G+ privacy alright. When I joined they said that I could either A) not join or B) allow all my friends on G+ share MY photos from Picassa without my permission.
A friend of mine signed up, realised it wasn't better than FB and closed his account. His account remains yet he was under the impression that it had closed.
"Oh I understood the G+ privacy alright. When I joined they said that I could either A) not join or B) allow all my friends on G+ share MY photos from Picassa without my permission."
I don't think Picasa renders the print screen key inoperable, so I don't understand exactly what protection you feel you're losing.
um, Microsoft pays vendors to use Windows too
you make it sound like Google sharing it's ad revenue with Android licensees is this evil thing and completely blow over how Microsoft has been paying vendors for years. they've paid vendors like HP to ship Windows CE on handhelds and they've paid vendors to put XP on netbooks all at the expense of any other OS. Sure, it's called something like The Microsoft Marketing Program but the effect is money gets paid back to the vendor for shipping Microsoft software.
But you hit a BIG point in the article. Google makes money from advertising and they can give some of the money generated by users of devices back to the makers of the devices. This is a game changer in the old school software world and no doubt it has Microsoft and other shaking in their boots.
As for why Google put Android on the market, Microsoft did a great job at crushing the handheld computer market and left it languishing and the Palm Treo OS wasn't up to the task. Apple finally shipped the iPhone and Android was sent back to the drawing board. What was shipped was not set out to be an "iPhone Killer" but to get more mobile users on the internet and using Google search. Apple was keeping distribution of the iPhone restricted to one vendor, AT&T, and pricing it to the high end. This is not new news and Google has even stated themselves that they want more people on the internet which will mean more eyes on their ads. That is unless you partner with Microsoft and therefore you're tied to a distant 2nd in search, ie BING, and are also enemies with Google by proxy.
re: "But the company needs to become as good at building new businesses (not just products) as it is at wrecking others' businesses."
Why in the world would they need to do that? Unless they plan to be broken up by the U.S. Justice Department, they don't need to bother with new businesses.
Also, is there some reason you used 'wrecking' instead of 'undermining'. Why should they care at all what happens to their competition?
You contradict yourself. If Google's competition shrivels into irrelevancy, the US DoJ will start treating Google like the monopolist that Microsoft had become when its competition was eradicated. So Google had better care damn well what happens to their competition.
Monopolies are not in themselves illegal, therefore they are not punishable by break-up.
The Sherman Antitrust Act (which I refer to only because MS and Google are US-based) draws a distinction between innocent monopolies (those that come about because of a superior product or better management) and coercive monopolies (those that come about because of unlawful practices).
Those that have been broken up (Standard Oil, Bell, etc) have either been due to criminal activities or for compelling economic reasons (that is, the monopoly stifled competition or the emergence of new competition). Google does neither of these things.
Regarding Microsoft, although they settled with the government in the end, the original suit was for tying, which is an illegal activity. To my knowledge, Google doesn't engage in tying. For instance, they don't compel you to have a Gmail account to use their search engine. Having a product which is very popular doesn't count.
makes Windows into a viable mobile competitor?
In the same way walking is better than flying if there is a madman with an ack-ack gun at the airport!
All I see here is MS getting a taste of its own medicine but the pharmacy its getting it from actually seems to know what its serving up.
Google is a one-trick pony but MS is the circus pickpocket.
There are a million ways to beat MS and Facebook - but to beat google you need to stop people using adverts. That's a much greater hill to climb than getting people to waste their time with silicons help.
Copying other peoples products is a proven business model...
... with Microsoft being the most successful example.
For those of us who were around to see the likes of WordPerfect and CPM eclipsed by inferior MS products, what Google is doing feels like poetic justice.
And the Google products are often damn good, which is a truly novel twist on the old copy and undercut business model.
was really pretty terrible. Back when I still wrote papers I always hated using it.
If I remember rightly WordPerfect lost because it was slow to bring out a windows version, preferring to stay in the DOS world. Word obviously had one, even if it was slow and inferior, but that was what the public wanted, thus it won.
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