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Google eyes
April 23, 2005
The eyeball strategy is back - with a vengeance. In the late nineties, doomed web entrepreneurs were throwing money around wildly in hopes of drawing as many visitors as possible to their sites. If you could just attract enough "eyeballs," the thinking went, you'd be able to figure out a way to "monetize" them later.
Well, "later" has finally arrived. The stunning growth reported by Google last week may or may not be sustainable - big profits attract lots of competitors - but it confirms beyond any doubt that the eyeball strategy works. Or at least it works as Google practices it. If you remember, Google operated for a long time without any apparent concern about making money off its site. It just stuck a breathtakingly simple home page up on the web, attached it to a bunch of homemade computers running a search engine far superior to anything else available at the time, and waited for the eyeballs to roll in. Which they did. It was only after Google had become the dominant search provider that it started putting ads up on its results pages. Then, to reach even more eyeballs, it bypassed its own site by delivering ads directly through other people's sites. (See box to right.)
And, by all accounts, it's just getting started.
"They are more like us than anyone else we have ever competed with." That's what Bill Gates says about Google. What he means is that Google is not at heart a search company but a software company. But Gates is only half right. Google isn't a search company. But it isn't a software company, either. The reason Google poses such a threat to Microsoft (and many other traditional software companies) is because it's a media company, and its medium just happens to be software. If it can make tons of money selling ads linked to the content of web pages and email messages, then it may well be able to do the same with, say, the text of word-processing documents or instant messages or the pixels in photographs. It's in Google's interest to process as much information for as many people as possible. It wants, in other words, to become the world's computer, and the best way to do that is to give away the software, the storage, the computing cycles, and the operating system. That's pretty scary - if you're in the business of selling that stuff.
But Google's different from software firms in another way, too: It can keep things simple. The traditional business model for the software industry hinges on getting customers to buy upgrades, which in turn requires the constant addition of new features. Each of those features may provide some value to someone, but in combination they tend to lead to ever more complex software - and ever more frustrated customers. Google sells ads, not upgrades. It can afford simplicity.
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Comments
I never set my eyes on the ads on Google.
It's not that big profits attract lots of competitors. It's the 'be bad' masqueraded as 'do o good'.
Posted by: 666 at December 21, 2005 01:42 PM
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The Atlantic article:
Is Google Making Us Stupid?"
Nick's new book:
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"Ominously prescient" -Kirkus Reviews
"Riveting stuff" -New York Post
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Avatars consume as much electricity as Brazilians
The love song of J. Alfred Prufrock's avatar
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The end of corporate computing
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