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Google Winning By Losing? 226

Posted by kdawson
from the brilliant-if-deliberate dept.
eldavojohn writes "The CEO of a small search company wrote an interesting piece for Search Insider about Google's unique strategy. It notes that Google has yet to become a leader in any technology other than search — but that its mostly unsuccessful attempts to branch out all end up bolstering its brand, and thus its search ad revenue. Is the new recipe for success to do one thing unbelievably well and several other things indifferently? Does this remind you of strategies from any other companies?" From the article, "Some of Google's non-search projects are really extensions of its search monetization, and are likely to succeed. But others projects mean entering areas where Google doesn't have much experience, and is taking a risk. With regard to those riskier areas, the key question for Google's future is whether it can realize that losing is really one of the best assets the company has."
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Google Winning By Losing?

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  • Ok and .... (Score:3, Insightful)

    by gomaze (105798) on Wednesday November 01, 2006 @02:57AM (#16669863) Homepage
    This goes right along with the saying that "Any news is good news". As long has the Google name keeps getting spread around and people keep talking about the new things they are doing, this will drive viewers it its different pages and products.
    • Microsoft is proof that you don't have to be the best to win, you just have to be ubiquitous.
  • by linuxguy (98493) on Wednesday November 01, 2006 @02:57AM (#16669867) Homepage

    Search, Gmail, Google Earth, Google Maps, Picasa ...

    Google has several interesting and best of breed web based applications. Not all of their products are going to be the best at what they do. This should hardly be news to anybody.
    • by Momoru (837801)
      Yahoo Maps beta [yahoo.com] is a lot better then Google maps. Traffic info, updated satellite imagery, and directions that actually are accurate!
      • First of all, Yahoo! Maps is flash based and doesn't even work properly across all platforms. Only recently has it started working in Linux. 64 bit? Forget it.

        Secondly, even on the platforms where it does work, it is HORRENDOUSLY SLOW compared to Google Maps. This is easy to see if you use it in an application that has lots of way points on it, like Frappr. As an example take the Kopete People [google.ca] page. After it *eventually* loads - when I try to zoom in on an area, Frappr pretty much barfs all over itself, l

      • Yahoo has a lot of good things going for it, but unfortunately they don't focus enough on one particular one to make it great. I for one enjoy their Photos, which is unlimited space and you can store the photos at original size. All for free. I've yet to see anyone else do this. Good place to back up photos for free.
      • by revlayle (964221)
        I really like Yahoo! Maps interface - it is really really nice. However, last I checked, their geocoder was still less than mature. I sometimes use obscure addresses that, these days, Google CAN find, and Yahoo! thinks are on the other side of the city.
    • It's debatable whether any or all of those are "best of breed", but I think the article was talking about userbase rather than quality. Google has not been able to break out of the Geek userbase in any of its efforts except search, generally speaking. Gmail, GoogleTalk, etc have miniscule share compared to the competition.
    • by rossifer (581396)
      MapQuest still has the lion's share of online map users. Accuracy is notably better, directions have always been the best, and after the recent update, Google Maps has nothing on MapQuest for usability.

      Actually, I have no idea why more people didn't move from MapQuest to Google Maps (or Yahoo Maps once they jumped on the usability bandwagon), but now that MapQuest is back in the game on all fronts, there's no reason for any departures at all...

      Poor Google Maps. Since MapQuest's update, I just use it all t
  • Indifferently? (Score:5, Insightful)

    by RedWizzard (192002) on Wednesday November 01, 2006 @03:00AM (#16669893)
    Is the new recipe for success to do one thing unbelievably well and several other things indifferently?
    Indifferently? I hardly call Google Maps, GMail, Sketch-Up, or Google Earth doing things indifferently. They're all better than average applications, IMO, and certainly Maps and GMail have sparked major changes in competitor's products. Just because they're not dominating market share doesn't mean they're not doing well.
    • I'd imagine Google Maps at least is a dominating market share.
    • by famebait (450028)
      AOL. And if someone sees a more usable online calendar than Google's, let me know. Sure, they have a few duds too (Google talk isn't going to take over the world anytime soon), but generalizing like that is really unwarranted. I'm as worried about Google's extensive knowledge of its users as the next guy, but they really do have a knack for buying out the best-of-class web apps in the ease-of-use for common tasks end of the market (rather than complex, professional functionality), and even developing a c
    • by suv4x4 (956391)
      They're all better than average applications, IMO, and certainly Maps and GMail have sparked major changes in competitor's products.

      Do you know GMail is still "beta"....!?
    • by dangitman (862676)
      Sketch-Up is made by a different company, not Google.
    • GMail was a brilliant play by Google. They restricted it so that they had relatively few users, but gave them all 2 GB which made headlines. Microsoft et al rushed to react, but of course Hotmail has hundreds of millions of users and giving them all 2 GB must have scared the hell out of Microsoft. In the end Microsoft still seems to be scrambling to update Hotmail accounts.

      Rich.

    • Re: (Score:3, Insightful)

      by Anonymous Coward
      Exactly -- what does it matter if GMail is the fourth most commonly used online mail service, instead of the first? As long as it's taking more in from ad revenue than it costs to run, it's a net win for Google.

      This baffling sort of analysis ("if you're not in first place, you're failing") also gets applied to Apple, where you see nonsense like the Gartner Group announcing, after Apple has just posted its most profitable quarter in history, that they should fundamentally change their business plan because
      • by miyako (632510)
        A general trend that I've noticed among a lot of people is that it seems like a business is always failing. Like, if every single person in the world bought a companies product, they would be failing because everyone isn't buying two.
        Business should be "...about building quality products and not taking a loss while doing it." but in reality it's just about making money and every single dime that is not going into the companies bank is an affront to their god-given rights to a profit. The other thing that
    • by johansalk (818687)
      I'd never heard of this sketchup app before. I just looked it up, it looks that one of those little toy shareware apps on nonags that I'd never cared for. Can someone enlighten as to what the point of a 3D sketching app is for Google?
      • by _Ludwig (86077)
        It allows users to populate Google Earth with 3D models. I've been using it since long before Google bought it, and while it's not AutoCAD, it's not trying to be. It's an excellent 3D visualization tool.
  • Of course! (Score:2, Funny)

    by aerthling (796790)
    I'm working off the same principle by intentionally failing my degree.
  • by QuantumG (50515) <qg@biodome.org> on Wednesday November 01, 2006 @03:03AM (#16669905) Homepage Journal
    Most companies have some MBA types sitting at the top working out how "the street" is going to respond to their every action and pushing that advice down the tree to tell developers what to do. As such, analysts (like this guy) are always trying to figure out what these MBA types are thinking, and why they are doing certain actions. This isn't how Google works. The developers are basically set free to do whatever the hell they want and they get rewarded when the company does well from it. Is it any surprise to find that the analysts are confused by Google?
    • by EmbeddedJanitor (597831) on Wednesday November 01, 2006 @03:18AM (#16670009)
      Yah goota be number one or you're nothing? This leads to competition focus rather than customer focus which is ultimately a short-term strategy.

      Sure, being number one goes back to primeval days. However, various research has shown that while the alpha male chimpanzees slug it out, the next guy down is getting more sex.....

      Perhaps Google are just not stupid enough to be pouring their energy into alpha-male business tactics.

      • Re: (Score:3, Insightful)

        by kjart (941720)

        Yah goota be number one or you're nothing?

        I don't know what you're smoking but that's even more true in Google's business than in many others. If they lose the edge in search and someone does it better people will start migrating. Brand loyalty is one thing, but who would continue to use Google if there were (significantly) better competitors? Being number 1 is the only option Google really has.

      • by QuantumG (50515) <qg@biodome.org> on Wednesday November 01, 2006 @05:00AM (#16670359) Homepage Journal
        Nah. You don't get it. The people buying shares in companies are looking for growth. If there's no growth, they make no profit. So how do you maintain consistent growth? It's not enough to keep your current customers happy, you have to get more customers, and to do that you have to play silly games like aquiring other companies and running advertising compaigns and blah blah blah. If you don't do all that crap people will sell their shares.. they can't afford to hold onto shares that are not increasing in value as fast as other shares, and without their money, you don't have a company.
        • by dangitman (862676) on Wednesday November 01, 2006 @07:05AM (#16670861)
          Nah. You don't get it. The people buying shares in companies are looking for growth. If there's no growth, they make no profit

          No, you don't seem to understand. A company does not have to grow to be profitable on the stock market. They just have to make a profit. And, the people buying shares look for many different qualities, it's called diversification. Along with a potential growth stock, many willalso buy a mature company that isn't growing but pays dividends, to balance out the portfolio.

        • by Qzukk (229616)
          and without their money

          When was Google's last public offering of new shares? How many GOOG stockholders actually paid google for their stock?
      • by Tom (822)
        Excellent point, and so true. My company will soon be #2 in our local market, and for all I care, #2 is way more comfortable than #1. Among other things, #1 has to deal with a lot of regulation and anti-trust issues.
      • Kill or be killed is the law of capitalism. If you're #1 you make more money (and probably have more sex too) and making money is the ultimate end goal here. It's not a penis size contest, it's survival of the fittest.
        • by dangitman (862676)
          If you're #1 you make more money

          The number 1 company in market-share is not always the most profitable.

      • by feepness (543479)
        Sure, being number one goes back to primeval days. However, various research has shown that while the alpha male chimpanzees slug it out, the next guy down is getting more sex.....

        It seems that if this were true then the alpha-male behavior would have been selected out a long time ago.
    • Re: (Score:2, Insightful)

      by Anonymous Coward
      There's a name for this, at least in games like chess: an inexperienced or an intentionally wild (or just very _different_ in some way) player can sometimes do very well against a very, very good player because the better player is trained to make his choices based on the other player making the most intelligent choices possible.
      • by Moraelin (679338) on Wednesday November 01, 2006 @04:24AM (#16670225) Journal
        Except it rarely works that way. I have some experience with both chess and Go, and have been the inexperienced player in that scenario more than once. I've yet to see even one single instance where it works like that from beginning to end.

        The inexperienced player may pull one or two surprisingly good maneuvers out of sheer dumb luck, maybe even gain a temporary advantage out of those. But in the long run he'll fail to use and consolidate that advantage and the more experienced player will _bury_ him.

        The chance to win a match by sheer dumb clueless doing something random that the other isn't expected is negligible because it just needs too many moves in a row where that happens. If the chance to make a surprisingly good and unexpected move is, say, 1 in 1000 (remember, it has to be not just good, but also some radical new strategy that noone tried before and the good player isn't expecting), then the chance to make two in a row is 1 in 1,000,000. And the chance to make 4 in a row is 1 in 1,000,000,000,000. Keeping up like that for a whole game is just not going to happen.

        Plus, good players are good because they can adapt and use logic to different situations. He's not going to just give up and run in circles for the next half an hour just because you did one different move. He'll keep reacting and probing and you only need to get out of that lucky streak once or twice for him to fully use it against you.

        Basically "beginner's luck" is a myth. It's a crap excuse by people who aren't as good as they think, to not admit that they played badly. Or that maybe they let you win. But if they didn't, then that supposed beginner actually played pretty damn well.

        And if Google's secret sauce is "beginner's luck", then maybe all it says is that the big "experienced" players are the ones playing badly in that space. Maybe it's not Google who's clueless there.
        • Re: (Score:3, Funny)

          by mgblst (80109)
          Yes, that is the problem with games like Chess and Go, they tend to even out over time. That is why the best way to test this theory is with a game like Scissors-Rock-Paper, since it is all over in one turn. A newbie can really surprise you there!
        • by iabervon (1971)
          It doesn't happen in chess or go, because these have simple rules and two players. But in games with more than two players and complicated rules (as opposed to complexity arising from the non-confluence of the game tree), it's reasonably likely for a novice playing with experts to pick a strategy which is less effective in general, but which avoids direct conflict with the strategies the other players are using.

          I once played a game of Rail Baron against a bunch of people who'd been playing it for years. The
        • by treeves (963993)
          I think beginner's luck has some meaning in activities like golf and bowling where the first time (or first few times) you play, you don't even know what to concentrate on, so you're just relaxed, and that in itself enables you do to reasonably well.

          Then when you learn a technique or two (or *think* you've learned), you focus on those so much (and they may not be the right technique or what's important), you're no longer relaxed. You now feel some pressure to perform since you're no longer a beginner, an

    • by nmk (781777)
      So I suppose its the programmers that are censoring sentitive content in China then.
    • And that's not a bad strategy, especially since they've figured out how to make money just from making cool stuff. Doesn't even seem like they have to sell it. They just make it and the cash rolls in.

      People seem to want to buy cool stuff when you make it. The majority of the stuff Sun used to make was cool back before they started buying a bunch of other companies and trying to sell their not-as-cool products. Apple makes cool stuff now and look how well they're doing. Making cool stuff seems to be a winn

    • by rossy (536408)
      Hey, this is an interesting angle on the perspective of an MBA analyst.
      When I think of possible MBA type vocabulary phrases, I think:
      "Merger, Outsource, Offshore" (aka Moo )
      Which involves:
      "Redeployment, Adjustments, Layoffs, Headcount Reductions" (aka Ralph )

      So with all the mooing and ralphing going on, actually focusing on building a tangible product seems to get lost in the shuffle.

      I'm sure there are exceptions to this... but it's hard to see when the majority of the US is busy outsourcing
  • Give them time (Score:5, Insightful)

    by caitsith01 (606117) on Wednesday November 01, 2006 @03:04AM (#16669907) Journal
    My experience of Google's non-search applications so far suggests that they are far from mediocre. It's inevitable that it will take them longer to really come to the fore in fields which are more mature that the search engine market was when they first rose to prominence.

    In addition, they have an excellent ability to fill niches in the market that are not being filled adequately (e.g. Picasa, Maps, News), and their products are differentiated by being ad-supported but otherwise free, which is a devastating approach for any competitor relying on a micropayment or subscription model. They seem to have the leverage to do things no other company could do at the moment, such as the book search system they are building and the Scholar academic journal search engine. This means that even if the implementation is 'indifferent' the sheer usefulness of the actual data being delivered still sets them apart.

    In other news, why do we really need more Google news? Wake me up when something new actually happens. Some guy writing some vague opinions about some company is not 'news' in any sense.
    • by aussie_a (778472)
      In addition, they have an excellent ability to fill niches in the market that are not being filled adequately (e.g. Picasa, Maps, News)


      Just to nitpick. Google bought Picasa so they didn't fill that niche, they just bought their way into it. Much like many other successful software companies do.
      • If they find a small company that does something well but is not well known, then they are helping that niche to be filled by giving it notoriety. This can be just as good as creating the software itself. Why reinvent the wheel? Buy it...maybe make a tweak or two...but no reason to start from scratch.
    • How was the search engine arena less mature than other areas they got into? Internet search has been around a lot longer than: mapping sites, webmail, etc. The difference is that they came in with a significant advantage in searching. I think there other apps have definitely been improvements over existing options, but not by as big a margin as their search was.
  • Slashdot (Score:3, Funny)

    by killa62 (828317) on Wednesday November 01, 2006 @03:04AM (#16669909)
    Does this remind you of strategies from any other companies?

    I was kinda thinking you were talking about Microsoft, but they don't do anything well.
    Apple cannot be it because they do everything well.

    However, this does remind me of Slashdot
    Does one thing well (dupes)
    and is bad at everything else (stories, having links work, not /.ing the links, etcetc)

    (this post would have been SOO much better if this story was indeed a dupe)
    • by HaeMaker (221642)
      Just wait a day...
    • I was kinda thinking you were talking about Microsoft, but they don't do anything well.

      If they sucked so hard, they wouldn't exist.

      There are a few Microsoft products that really are best-in-class. Excel comes to mind...it's the lifeblood app of the business world. The majority of hardware with a Microsoft label is pretty damn solid.

      Apple cannot be it because they do everything well.

      If they did everything well, they'd have a double-digit piece of the pie. Apple has certainly taken their share of boneheade
    • Apple cannot be it because they do everything well.
      I would say that Apple is a perfect fit since the ONLY thing they do well (perfect, I must admit) is nice shiny buttons. The rest is worthless.
  • But others projects mean entering areas where Google doesn't have much experience, and is taking a risk.

    you mean like they did with search?

    • by rf0 (159958)
      You can only get expierence by either buying it in or expermimenting. If it goes wrong then just dust yourself off, get up and try again.
  • by Salvance (1014001) * on Wednesday November 01, 2006 @03:11AM (#16669953) Homepage Journal
    Google is trying to maintain the appearance of being innovative, and doing a good job of it. Every time they release a new product, even if they downgrade its importance or ditch it later, it gets tremendous buzz. Buzz is where it's at, and everytime they generate more buzz they drive more advertisers, searchers, and AdSense publishers to their site.

    Another advantage to developing TONS of new products is that it keeps their folks busy on cool/fun new products. Most software engineers want to be able to go home to their families and have something fun to show them as an example of what they do. Showing your kid GoogleMaps or GoogleEarth will impress the heck out of them, and they'll think you're a genius.

    If Google didn't have the 70/20/10 development principal, these engineers would be going home and answering their friends' prompts with "Ummm...if you want to know what I do, check out the results of searching for Mexican Pizza now vs. 2 years ago, the results are so much more relevant". Fun.
  • I don't know... (Score:3, Insightful)

    by tnk1 (899206) on Wednesday November 01, 2006 @03:15AM (#16669987)
    Google has a lot of money to throw around at the moment, perhaps too much to not be trying something new.

    On the other hand, I really think it needs to actually make one of those "side projects" into a real win, because I think that as good as Google search is, I don't know that its worth that market cap by itself. I think people invested in Google precisely because they thought they could use their search advantage to create other products that would be successful. To that end, I think Google is doing what it should be doing, but they may want to find something that works really well and maybe not go too far overboard with accepting indifferent projects. Loss leaders are fine, but you can't have every product be one. Even Microsoft has a fair proportion of revenue generators in addition to the indifferent crap that they give away for free. Google has... search.

    The YouTube acquisition bothers me in that regard. People would like to think that YouTube could get common carrier protection, or that they can somehow reach a deal with the MPAA/RIAA sharks, but I'm not sure I'd bet the farm on that The acquisition was expensive and dangerous to begin with. Now, the Google ownership makes it worth the effort of having the sharks attack for a score. Google isn't an ISP and there's no reason that just because you have an unfiltered website for posting means that you are now in the same boat as telcos and ISPs in terms of not being liable for what goes over your lines. YouTube isn't infrastructure, its a leaf node.

    Google's got a lot of goodwill capital, but eventually, I think someone is going to start asking where the bacon is if the investment money is being used for indifferent projects around plain old search.
    • Re: (Score:3, Interesting)

      by Lehk228 (705449)
      Gootube's protection has nothing to do with Telcoms/common carrier and everything to do with the DMCA.

      before the DMCA you could in fact be sued for having infringing material posted to your service. now you cannot be if you comply with a porperly sent DMCA takedown letter, or never recieve a properly sent DMCA takedown letter
      • by dangitman (862676)
        before the DMCA you could in fact be sued for having infringing material posted to your service. now you cannot be if you comply with a porperly sent DMCA takedown letter

        That's downright unAmerican! I doubt it is true. You can basically sue anybody over anything. Whether you win or not, is another matter.

  • ...the question as posed suggests issues where none exist.

    Second-guessing success does nothing more than reflect the lack of understanding of the questioner. The 'failings' are subjective, reaching no further than the opinions of one person; the process put up for examination are at best simply not known, again, at least to the questioner.

    And last, but not least, the questioner hints that perhaps there is some sort of success formula to be captured and applied elsewhere, which is at best similar to pr
  • Just because they don't dominate every market doesn't they're "losing". As a business, if they're making money stably (and boy, are they), they're winning. Period. They're just doing it in different ways.

    I can tell you one way they're winning: when Google releases something new, I pay attention, because there's a good chance I'll like it more than what the competition offers. They've got my brand loyalty by not sucking.

    • Gmail: I don't know the numbers on whether it's beating Yahoo, Hotmail and AOL (doubt
    • by wan-fu (746576)
      You're right on the first two accounts. The last two I think you may not have tried Microsoft's offerings recently. Microsoft has had a long history of developing APIs for developers and if you look at their live.com projects, most of them come with APIs that are not hard to use at all. I haven't really developed against either Google or Live, but just looking at both, it doesn't seem to me that one is superior over the other. As for your last point on mapping, you need to try out Live Local. I was skeptica
  • Well that's funny (Score:5, Insightful)

    by The Bungi (221687) <thebungi@gmail.com> on Wednesday November 01, 2006 @03:17AM (#16670003) Homepage
    When Google does it it's an interesting and enigmatic experiment that everybody likes to watch, but when it's Microsoft (and we're talking about exactly the same thing here, except that they started 10 years ago) then they're "stumbling in the dark" and it's just "a matter of time before they fail". XBox, MSN, Encarta, most of their server products, etc. That's just too funny.
    • by ozbird (127571)
      Microsoft does something unbelievably well?
    • by aug24 (38229)
      Can't help but notice that XBox Live isn't aren't given away like Google Docs and Spreadsheets. Encarta isn't freely available like Google Earth. Somehow Google's offerings have a ring of philanthropy while MS's are, well, just business.

      Justin.
    • Google's out there experimenting and trying things because they might be great.

      Microsoft's trying to extend a monopoly with little concern for actual innovation. And they're arrogant bullies as well.

      THAT influences how we view them: fun, whacky inventors versus mean, leveraging bullies.

      That plus, what GREAT software has MS made?
    • Re: (Score:3, Insightful)

      by evilviper (135110)

      but when it's Microsoft (and we're talking about exactly the same thing here, except that they started 10 years ago)

      Not at all. When Microsoft does something similar, it's to make it more closed, not open. It's to give it fewer features, not more. It's to close it off to competitors, not open it up. etc. When Microsoft buys a company, it's to suck all the marrow out of it.

      Remember when Hotmail had more space, less adds, free POP service, etc.? You know, back before Microsoft bought them and made Outl

    • by orasio (188021)
      Microsoft sells software. When they fail at software, they fail.
      Google sells ads. When they fail at software, they keep on selling ads.
  • Obligatory (Score:2, Funny)

    by Tablizer (95088)
    1. Do one thing well
    2. Suck at everything else tried
    3. ?
    4. PROFIT!

       
  • the key question for Google's future is whether it can realize that losing is really one of the best assets the company has

    No.

    Does Google shoot itself in the foot every time it scores a win with a new product? Of course not. It is not the losing that is important. That's simply a by-product of taking a lot of shots on goal; most of them miss. But Google doesn't celebrate the failures. It celebrates willingness to take chances and try new things, because it knows that such an attitude will lead to more

  • by Fuzuli (135489) on Wednesday November 01, 2006 @03:51AM (#16670119)
    This is what Oracle does. To me, they are a database vendor. Yes they have development tools in java, application servers, soa solutions etc. I have been working with their technology for over two years now, and the products other than the database really sucks. The database sucks too, but it sucks in a stable manner.
    Especially the application server is a pain in the a.s, and their development tools make you question your life as a developer. At the moment they have a product portfolio hidden behind their brand constructed by the database. This seems to work though, they somehow reflect the image of a large vendor with many solutions. (not to me, but to managers, market etc.)
  • Moats (Score:4, Interesting)

    by tpengster (566422) <slash@NoSPAM.tpengster.com> on Wednesday November 01, 2006 @04:04AM (#16670167)
    What will determine Google's business success in the long run is a) the moats it can build around its businesses, and b) whether they can overcome their competitors' moats. (A moat is some advantage that protects the company from competition. In the tech industry this is usually called "stickiness")

    In some of the businesses mentioned in the article, such as IM and email, moats exist, but unfortunately Google is on the wrong side of those moats. AIM and Y! Mail are on the inside, and Google is on the outside trying to get in. These moats are not that strong (very few are in technology), but it doesn't look like Google is making too much headway. If anyone should be scaring Yahoo Mail and AIM, it's Facebook and Myspace. Those guys already have a list of your friends, which eliminates a major switching cost, and they have already shown that contextualized communication wins. (Most college kids don't use email anymore -- they use fb.) I'm convinced that only business-related email is saving email as a paradigm in the next 10 years, but who knows what can happen in that time?

    I have been trying to identify Google's moats and I can think of a few. The first is the brand name. Google is cool because they release a bunch of cool technology and they win the evangelizers, who are really important when it's only a matter of picking among similar-quality search engines. The second is that they have supposedly assembled a really amazing team. This is not so easy to do, even with a large amount of money, as MSN Search has shown. Finally, the infrastructure has to be given some credit. Not just the hardware farms, but the gigantic databases that have been assembled over time which might make Google a better-informed and therefore better-results-producing search.

    The above moats -- both google's and competitors' -- are only fair, not permanant. The upside is that Y! and AIM's moats can be destroyed. So it is conceivable that in the long run, Google chips away and evenutally wins those markets through tough-nosed competition. They'll have to make much better sites before we get to that point.

    The downside is that these moats are not as strong as platform lock-ins. Technologies are so interdependent that platforms (something other companies are truly dependent on) naturally form monopolies, and those monopolies naturally give birth to other monopolies. Microsoft is a perfect example. And it is not hard to imagine them using their browser platform to become the winner in search. Unfortunately, google has not yet been able to form a platform (gmaps mashups don't count). I think they are really trying to do this by becoming what we used to call a portal (before 2.0 was cool). The problem is that nobody is dependent on any of their pieces. Web search isn't a dependency or a launching point, except to the extent that people used to use the search engine as their homepage (who needs that when we have search boxes in the browser?).

    MS doesn't even need to make MSN as good as Google.. they just have to get it "good enough" such that it isn't worth people's time to switch away from the default search in IE. The whole idea espoused by the article of "winning by losing" is ridiculous. The fact is that Google is winning bigtime in search -- so big that they can afford to lose elsewhere. But they certainly aren't losing on purpose, or solely to promote the google brand. And they have little room for error in search.

  • Jesus titty-fucking H Christ on a bike fucking me sideways with a chainsaw THAT WAS A DUMB ARTICLE.

    I am stupider for having read it.

    As will you be. Don't do it.
  • by Tom (822)
    Maybe it's just that Google has enough money to throw it around, knowing well that most of its projects will never get a positive cash flow, but taking risks is the only way to stumble upon the next big thing.
  • A lot of people here seem to be missing the point about losing...

    What Google is doing is VERY different in today's market - they are building things that they know might suck, and they don't care about taking a few hits.

    Too many companies respond to failure by never trying anything outside of their core competencies again, and this limits the potential of these companies. The fact that Google are prepared to fail, prepared to lose at some things is definitely a major asset for a company today, and I think t
  • by Colin Smith (2679) on Wednesday November 01, 2006 @05:26AM (#16670429)
    They're what bring you to Google's product.

    Google's product is adsense and adwords.

     
    • Their product isn't what they make, their product is what they sell. What they sell is impressions. So it's not the adword itself that they're selling. It's the number of times a listing is "viewed".

      Sure, this is a somewhat pedantic distinction. But it's useful to always remember that an ad-supported company is not successful when produces something good, it is successful when it produces something popular. Yes, this also explains TV.
  • Goggle is the undisputed leader in contextual advertising. They have at least a two year lead over their competitors. That's their cash cow. That's how they generate their huge profits. How can anyone who wants to be CEO ignore that? I didn't read all the posts, but I think this hasn't been mentioned in any of the replies. People are discussing Google Maps, GMail and what not. That's only the vehicles for contextual advertising.
  • This is really old strategy.
    One very valid marketing strategy states that you company should have 3 products:
    1 product to announce
    1 product to sell
    1 product to make money

    And they give some examples. Like McDonald's. Announce the BigMac, sell fries, and make money by selling soda (which is in fact their product with the highest profit margin).

    That is pretty much what google is doing. They announce these "new products", sell "seaching", and make money with advertising.

    I really don't see what is new on this.
    • This is very true- look at the dollar menu that McDonald's has. The profits they make off most of the items on the dollar menu are minimal- I've even heard that they lose money on every Big N'Tasty made. However, the soda is something like 90 cents profit out of a dollar. So as long as they sell a $1 soda for every couple Big N'Tasties, they make a decent profit.
  • "Would you like me to give you a formula for...success? It's quite simple, really. Double your rate of failure... You're thinking of failure as the enemy of success. But it isn't at all...You can be discouraged by failure - or you can learn from it. So go ahead and make mistakes. Make all you can. Because, remember that's where you'll find success. On the far side of failure."

    -- Thomas J. Watson, Sr.

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