OK Kids, lets leave our desk(tops) and go out into the real world.
From Tech Review magazine What's next for Google.
For Eric Schmidt, Google’s CEO, 2004 was a very good year. His firm led the search industry, the fastest-growing major sector in technology; it went public, raising $1.67 billion; its stock price soared; and its revenues more than doubled, to $3 billion. But as the search market ripens into something worthy of Microsoft’s attention, those familiar with the software business have been wondering whether Google, apparently triumphant, is in fact headed off the cliff or the proverbial runway .
Google’s site is still the best Web search service, and Gmail, its new Web-based e-mail service, Google Desktop, its desktop search tool, and Google Deskbar, its toolbar, are very cool. But that’s all they are. As yet, nothing prevents the world from switching (painlessly, instantly) to Microsoft search services and software, particularly if they are integrated with the Microsoft products that people already use.
Is Google going to turn the PC into a Times Square with all of the advertising it intends to do?
Google’s founders understand the scale of the opportunity. Larry Page recently said, “Only a fraction of the world’s information is indexed on our computers. We are continually working on new ways to index more.... Thirty percent [of our engineers] are devoted to emerging businesses.
Until now, competition in the search industry has been limited to the Web and has been conducted algorithm by algorithm, feature by feature, and site by site. This competition has resulted in a Google and Yahoo duopoly. If nothing were to change, the growth of Microsoft’s search business would only create a broader oligopoly, similar, perhaps, to those in other media markets. But the search industry will soon serve more than just a Web-based consumer market. It will also include an industrial market for enterprise software products and services, a mass market for personal productivity and communications software, and software and services for a sea of new consumer devices...howabout the physical world too?
But what specifically should Google do? How is Microsoft likely to attack, what will the contest look like, and what will decide its outcome? Let’s begin with the current state of search.
Google derives nearly all of its revenues from advertising, of two distinct kinds.
First, it places advertisements on pages of search results returned by its own site. Those advertisements are selected according to the words used in the search. Advertisers bid in highly complex auctions for the right to place ads on results pages for searches that use specific terms like “used cars,” “SUVs,” and so forth. Second, Google manages advertising for a wide network of external websites for which it provides ad placement services. It has combined its search engine with sophisticated text-matching and auction systems to target, price, sell, and evaluate its advertisements, both those placed on its own site and those on its affiliates’.
It has taken the Ebay approach to keywords, valued them as mere commodities.
If it acts logically, Microsoft would also perform a “cashectomy” on Google—just as it did in the browser wars when it gave away Internet Explorer.
Cashectomy, that just sounds painful.
What is the one big thing Microsoft has that Google doesnt, they are used to run every microprocessor. They are a platform, a base under which Google resides. Google is a nice house, but Microsoft is the land. Houses will come and go over time on the land, but the land will always be there.
Even with nearly $2 billion in cash, Google is vulnerable to this tactic. For instance, Microsoft could offer free wholesale access to its search engine.
So what should Google do? Given Microsoft’s ferocity in the past, panic might be a productive first step. Google should understand that it faces an architecture war and act accordingly. Its most urgent task must be to turn its website into a major platform, as some other firms have already done.
Panic and Google in the same sentence? Wow. If I was Google, first thing I would do is go back to the site of my most talked about interviews , and realize the only way I stand to pose a real threat to Microsoft is to get on a platform.
Find some land where the settlers will be coming , and establish foothold there.
It has been said that the 2"x2" screen will be the most coveted real estate for advertising ever...that might be a good place to start.
There are more Web enabled devices now than PC's and its just a matter of time till the traffic metrics shift. I would find a real estate agent and start making offers.