Two of the best writers on information technology, Robert X. Cringely and Joel Spolsky, have just delivered thought-provoking new articles. Cringely speculates on how Google plans to deploy scores of portable data centers throughout the land, which combined with its reputed ownership of large amounts of installed fiber-optic cable will enable it to turn “the entire Internet into a giant processing and storage grid” under its control. “There will be the Internet, and then there will be the Google Internet, superimposed on top. We’ll use it without even knowing. The Google Internet will be faster, safer, and cheaper … And the final result is that Web 2.0 IS Google.”
Spolsky offers an alternative, and persuasive, take on why record companies are trying to get Apple to charge different prices for songs at its iTunes Music Store. “What they really want,” he argues, “is a system they can manipulate to send signals about what songs are worth, and thus what songs you should buy. I assure you that when really bad songs come out, as long as they’re new and the recording industry wants to promote those songs, they’ll charge the full $2.49 or whatever it is to send a fake signal that the songs are better than they really are.” We usually assume that you increase sales by reducing prices, but as Spolsky shows it’s not so simple. Consumers are anything but rational.
Unfortunately, Cringely doesn’t blog (won’t eat his own dog food?) so we can’t converse with him on his interesting thesis, but this guy has taken up the baton:
http://mp.blogs.com/mp/2005/11/ss_3.html
There’s a lot to think about and it gets at the central question I’ve had for awhile: how can Google, dependent upon a competitor (MS) for access to their customers, survive in an environment where others will canibalize their ad revenue going forward?
Interesting stuff.
I think song lyrics are appropriate here. I think the “put a high price on it and people will know to buy it” idea is one that at least 2 songs mention:
Bob Seger (Shakedown): “Everybody wants into the crowded line”
Soul Asylum (Black Gold): “Nothing attracts a crowd like a crowd”
I subscribe to Yahoo! Music Unlimited (and was a Real Rhapsody subscriber for a couple years before I switched), and I can definitely see how the music industry would get frustrated at the ease of which I can listen to the bands they aren’t counting on to make millions. And that loss of control must drive them crazy.