Cattle Guards
Suppose you are a big—very big—company, and you want to enter a new market. But you don’t actually have direct interest in this market as a profit source; you want to enter it because you realize that to protect your existing business (one you’re overwhelmingly dominant in), you have to be a major player in this new space.
So you either buy a company in that space or you license technology that lets you get there and you sink resources into improving that technology, maybe pivoting once or twice with your positioning based on what competitors are doing.
And then you give it away.
Remember, you’re not interested in this new market as a profit center. You want to become a major player in it as fast as possible because that will protect—and ideally enhance—your existing revenue streams.
Okay, here’s the challenge: explain why the scenario I’ve just described is good when Google did it with Android, but bad when Microsoft did it with Microsoft Explorer. Because as near as I can tell, that’s the conventional wisdom, but it’s hard to see a substantive difference.
Granted, one difference makes Microsoft out to be a pretty intentional dick: they licensed the original IE core from Spyglass rather than buying them, and they licensed it for a percentage of revenue—which, of course, turned out to be exactly $0. And, of course, Android is being given to hardware partners who ask (or negotiate) for it, rather than shoved directly to consumers who didn’t. (Microsoft relied on consumers to not bother getting a competing browser if IE was sitting in front of them.)
But even so.
This rumination is brought on by Brian Hall’s (unfortunately titled) “Google are Pussies,” linked to by Daring Fireball earlier today (and as of this writing brought down by DF, but cached here). I wouldn’t go that far, but we tend to forget that Google plays serious hardball with both Android and their core search business.
Android comes for free, but not without strings—just ask Nokia. When the Finnish company made it clear that even if they switched to someone else’s core platform they wanted to bring their own mapping and imaging technology with them, they were told that Google Open wasn’t that open, thanks. From Google’s standpoint, the whole point of Android is to have a dominant mobile platform that isn’t controlled by someone who can strike a deal with a Google competitor to keep their services off that platform. Technically, Google can’t stop someone from taking Android and making a device that cuts them out of the loop—but they can sure stop them from using the Android brand (and the Android Market).
Google’s attitude here is best viewed through their search engine itself, though. What Google tells you is: you don’t need to go to a weather site—we’ll do it. You don’t need to go to a flight tracking site—we’ll scrape that. We’ll index Twitter so you don’t need to search that. We’ll add reviews, so you don’t need to click through to Yelp. We’ll do price comparisons, so don’t bother with PriceWatch. We’ll add coupons, so you don’t need to bother with those Groupon folks. And instead of Facebook, may we introduce you to Google+?
Google is very deliberately leveraging their dominant position in search to keep you on Google-controlled pages as much as possible. Always, always keep in mind that Google’s core business is advertising: either they want to show you ads, or they want to collect information about your browsing habits so they can make the ads they show you more targeted. Facebook is a walled garden, but Google is increasingly a pasture with cattle guards.
