3.25.2005

The end of Google is Nigh!

Nobody would argue that the Internet and its side effects (blogging, low transaction costs, transparency, accountability) are gimmicky fads destined to mimic pets.com and other dotcom disasters. I've been thinking about what these new realities mean for business and specifically one facet of business: Size.

If you look the music industry it's pretty clear that much of their power is the result of ownership of distribution channels which they've monopolized. The Internet has removed those distribution inefficiencies and lowered the barriers to entry. The eyeballs of a million web empowered musicians are staring, bemused at the guards to a castle with no walls*.

Large corporations are simply too big to keep pace with innovation so they become venture capital firms, acquiring small innovative startups like Flickr. Their only hope in the land of one man, open source innovation machines (BitTorrent) is that users of their new free services click on ads. Hard problems like poverty in Africa can't be solved by America because we can't just throw money at the problem. These impovershed nations are poor because of their corrupt leaders. Those so called leaders take our foreign aid and buy nice cars and boats. Real innovation is also a hard problem. Throwing a billion dollars at it doesn't work like it used to.

Google will soon die in my opinion because Meta-tagging is no longer just a buzzword. A formula dictates what you see in a Google search result page. Google has recently taken heat for including a neo-nazi "news" site in their GoogleNews search results. Pure technology has limitations. Free technology that turns our brains into the search algorithm is incompatible with the search business. Google figured out the longtail theory early and profited. Early mover advantage is however a relative flash in the pan unless you see a decade as a really long time. I'd even argue that early mover advantage is a sign of applied awareness not innovation. Google is using an old business model even though they're in the tech industry. Learning how to survive as a business when faced with an army of caffeine addicted, crustless sandwich fed, mom's basement jockeys who code for the love of it and don't charge a dime for their efforts, that's the trick.

At the emerging technology conference people were talking about the imporatnce of the "edge". The edge refers to anybody not between the producer and consumer, middlemen. Money could buy monopoly status in the past, Microsoft is a prime example. Monopolies were able to exist between "the edges" because insufficient technology and closed, defacto standards allowed them to. Times have changed. The people in the future with money will likely have actually earned it, that can't be a bad thing. If I'm not full of crap then bonds may be a damn good investment.

Next time: Desktop applications vs. Web apps.
The "server" is the distribution monopoly propping up sites like Google.

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