With Google desktop, Google has the potential to create a new
platform and displace the incumbent's (MSFT) hold on the OS layer.
Although this is a play from the Netscape playbook, there are clear
differences. Netscape's ambition was to provide an application
toolkit that would encourage software vendors to write to their
browser platform and thereby render the underlying OS to a commodity
status. As is well documented, this strategy did not work when MSFT
"cut off their air supply."
Comments (5 )
What is different with Google's case is that it doesn't just provide
a toolkit. Google has content (8 billion indexed pages, data on
consumer behavior), and applications for search to go along with the
toolkit. The recent launch of the Desktop application allows Google
to integrate all their services. This application provides users with
access to information residing within and outside the PC. As a
result, consumers would get accustomed to seeing this application as
the start page on their computer. In addition to this, with
developers creating more "mash-up" applications that work with Google
applications, Google has a better chance to establish a layer between
the applications and OS platform. Once this layer is established,
they can choose to work on any OS platform.
As far as I can tell, Google uses information within a web page and the
links to the page containing the text to determine a page's relevance. I recently opened an account with del.icio.us mainly
to bookmark my Google links and access it from any computer (home,
work or elsewhere). For each link, del.icio.us asks for a description
and tags. Once we submit our tags, we can see who else has tagged
those very same pages. Users can then navigate to that persons page
and see other pages that they have tagged. Using this feature, I was
able to access many Goolge related sites. This experience reminded me
of Amazon.com recommendations. Amazon makes recommendations by
analyzing customer transaction records and deriving similarities.
Google should add this feature and recommend pages based on user
queries. The main question for Google is -- will imperfect social
tags do better than their page ranking algorithm? Should they use a
hybrid approach? Is social tagging next for Google?
Comments (3 )
A multi-sided platform must serve two or more groups of customers.
For example, credit card companies serve both shoppers and merchants
or shopping malls that bring together shoppers and merchants. Another
necessary condition is that these customer groups must benefit from
the mediating platform (create network effects). For example, if more
retailers decide to carry a particular credit card, the more benefits
to the customer carrying the credit card. By using the platform, all
parties must derive a clear and tangible benefit. For example, they
create value through efficiency gains and creation of options that
provide flexibility to deal with evolving uncertainty. A final
condition that we have identified is the creation of control points.
Control points are the set of components within the platform that are
vital to the creation and appropriation of value. They are also very
influential in the performance of application that run on top of the platform.
Comments (2 )
In Google's case, their customers use the search engine for many
reasons. One obvious reason is the simple and easy to use interface
with very little clutter. Another reason is Google's superior search
algorithms that find relevant results. The vast repository of indexed
pages is also very attractive to customers. Another group that Google
serves well is the set of firms providing complementary services.
Google provides them with easy access to their services and that they
can use to build applications that work on top of Google's platform.
These firms constitute the developer community that is vital to
Google's success. As more developers use Google's facilities to
launch applications, consumers find more value in using Google's
search engine. Google's services are also used by firms to build
their brand and advertise on the Internet. These firms use products
that are provided by Google or by a third party developer to sell
their wares to customers who use Google as their search engine. All
of them derive tangible benefits. Customers find relevant search
results and ads. Developers launching applications productively by
reusing and extending Google's services. Firms using AdSense for
serving up ads can also use its reporting facilities to track
effectiveness of campaigns. Since all applications have to call
Google's search engine, using public APIs that have to be invoked
every time, to get relevant results, Google controls how much and how
many times any given user can call its APIs. This gives it
architectural control over its ecosystem partners.
In their classic work on the role of modularity in the design of
complex systems, Baldwin and Clark identify three benefits derived
from modularization. First of all, modularity makes complexity manageable.
They allow designers to work in parallel on different parts of the
system. Finally, modularity accommodates uncertainty. Computer
industry has shown modular development over the years. This has
allowed firms to specialize in particular areas or stacks, while
depending on other firms to supply other parts of the total system.
The reward awaiting participants in the modular design is
compatibility and interoperability. This reward is ensured by the
presence of design rules that govern the architecture, interfaces and
tests of the system.
This brings us to Google. First of all, Google has created a separate
identity for search. Given that there is lot of uncertainty around
what comprises search and how it should be delivered, Google, the
design architect, has created a separate industry module. Within
search, Google has defined the components, the interfaces and the
test to determine conformity. By becoming the de facto platform,
Google has creates the design rules for the search platform. As a
result, Google has created a lot of value within the industry.
However, all the design rules and interfaces are open for all to
view. Given this, how does Google appropriate value?
Comments (1 )
With its current set of applications, Google has provided a platform for
a network of players to develop and launch search related services. This
is made possible as a result of Google’s applications being developed as
modules with public APIs that can be called by third party service
providers. A major benefit in developing such modular components with
standard interfaces is what is known as combinatorial innovation. The
idea is that every now and then a set of standardized parts or components
comes along, triggering a wave of experimentation by innovators who
tinker with the many combinations of these components. The result:
a wealth of new products built on the newly available components. Some of
these products are novel even to the designer of the component!
This is the same idea on which webservices arrived. However, due to a
lack of standardization, it has not really taken off. Google is
establishing these standards through natural experiments that are taking
place right now. Through these experiments, Google may have invented the
process and protocol to be followed for creating and listing web
services. Although, in its current state, Google is experimenting
exclusively with search related services, there is nothing to prevent it
from providing a forum to launch other types of applications.
Comments (3 )
In an era driven by the logic of serving the common demand across the
market, the long tail idea is very appealing. At Google's first
shareholder's meeting in May 2005, Eric Schmidt, Google’s CEO, describes
Google's mission as "serving the long tail."
The Long Tail
as described by Chris Anderson, editor-in-chief at Wired, is a classic
byproduct of Internet based business. In that article, he provides
examples of how information technology turns mass markets into a million
niches. One interesting example is video rental. The average Netflix
customer rents seven DVDs a month, three times the rate at
brick-and-mortar stores. This he says is due to two reasons. First, when
the incremental costs of making everything available to anyone are low
enough, companies can offer massive variety instead of just pushing the
latest blockbuster. Second, using the improved signal-to-noise ratio that
comes from following a good recommendation encourages exploration and can
reawaken a passion for music and film, potentially creating a far larger
entertainment market overall.
Google, too, is a good example of a company catering to the long tail. At
one end, they have large firms such as Wal-Mart. At the other end, they
have individual users. In the middle are the mid-sized businesses that
Google prides itself in serving well. To serve large businesses, Google
brought out a whole suite of tools (AdSense and AdWords) for very large
advertisers who can use their services in all of their divisions to
generate lots of revenues. For the individual users, it is almost a daily
release cycle with new products (albeit beta versions) cropping up one
every other day. The insight from the long tail concept is that there are
enough customers with niche needs that can be profitably served by a
company using its leverage with the large customers.
Comments (6 )
Google plays in what is called multi-sided markets. They have to
provide search services that are appreciated by end customers searching
for information. At the same time, they should provide advertisers with
the ability to present relevant information to the searching consumers.
Advertisers should be supported as they provide information for
customers coming to Google's website or even to other website
properties (Google does this using the AdWords and AdSense platform).
Another constituent they should consider is the developers who provides
services that work on top of Google's services. For example, Prudential
has a service
to show listed properties in the Chicago area and they present property
information using Google Earth. Currently, Google provides API-based
access to all these constituents.
Google also benefits
from what are called network effects. As a result, as more people use
Google for searches, more advertisers come to it. More advertisers
create more relevant sponsored links and this results in greater
revenues for Google and this revenue gets invested in better search
engine technology and better search engine results in more advertisers
and so on. Here is the puzzle: should Google charge every one (other
than end-users) per API call or should they simply charge the
advertisers a transaction fee for any ad served to the end-user?
Comments (1 )
What is the right balance between exploiting what you know and exploring
new areas? Either extreme could turn out to be bad for companies. On
one hand, companies should be able to get the best out of their current
business line, while ensuring that they are not blindsided by the next
big thing in their industry. Google's CEO has instituted the 70/20/10
rule within his company. This means that seventy percent of the
company's money is invested in areas relating to its core business of
advertising and search, 20 percent in related but secondary businesses
(news, desktop search, Gmail), and 10 percent for comparatively wild,
new ideas (Orkut, Keyhole, Picasa). Google employees have 20% time –
almost one day a week – in which they are free to pursue projects that
are passionate about and think will benefit Google. This policy has
resulted in Google News, Google Suggest, and Orkut. Should this
strategy be in every company's playbook? .
Comments (6 )
Given that competition is about delivering the right information using contextual information, the next interesting question is about the device on which it is delivered. Is PC the right platform? Google already has an alliance with T-Mobile that provides consumers with the Google search engine on the homepage of the new "web 'n' walk" Internet service for cell phones. What about handheld devices like PDAs? Will they become extinct? If competitors are staking out territory in the smart phone market, who will emerge as the platform providers? Large amounts are at stake for players in the ecosystem such as device makers, operating system vendors, application provider and operators (Verizon, Cingular, Vodafone, etc.). .
Comments (1 )
What products should Google introduce into the enterprise
market? Should they focus on any vertical markets?
What are some potential applications of software as a
service that can run on top of Google’s desktop search platform?
all their products create a great deal of value, how
does Google appropriate value? Should Google open its proprietary
APIs to establish a
standard? Should they charge for API use and for how long? Who should
Google partner with? What metrics should Google track closely?
Comments (1 )
Why is a search engine company creating so much commotion in the
marketplace? Is Google doing something that important? Google's mission
statement reveals why it is perceived to be a big threat to Microsoft.
Its mission statement reads "to organize the world's information and make it universally accessible and useful
." It doesn't get more elementary than that. This could be the stated
goal for any packaged software company. Google is beginning to roll out
applications as services. Currently, it has exposed APIs to Google
Earth and AdWords. Soon they could begin to provide enterprise
applications to manage information within healthcare, financial
services or legal sectors. By creating development toolkits and
standards, Google has begun to attract developers to write to the
Google platform. On top of this, they have established themselves on
the privacy and personalization front. This makes them a very credible
Comments (1 )
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