2 March 2008
I have been posting regularly about the weakness of Google's advertising-based business model against the backdrop of a looming consumer-led recession.
I do have a modest proposal for what Google could do instead.
Interestingly, Microsoft clearly views Google as a competitor, as evidenced by its recent (to me almost incomprehensible) bid for Yahoo! - which is another great company with a weak business model - and that offers an interesting clue.
Microsoft (I think accurately) perceives the prospect that Google could some day horn in on its milk-and-honey business of what I call digital manufacturing. That is, Microsoft is a hugely profitable behemoth because it is able to sell its digital products at a huge premium because every computer user (both individual and corporate) requires both operating systems and software programs to run on those systems.
There can be no secret that there is one defining difference between Google's so-far free software products, and Microsoft's premium-priced software products. Microsoft has from the beginning been unable to create either an operating system or software running on its operating system that works.
By way of contrast, everything that Google produces works smoothly, reliably, intuitively and gratifyingly.
What a contrast between these two companies.
My modest proposal for Google, therefore, is that it take seriously the prospect of competing head-to-head with Microsoft in the lucrative business of digital manufacturing.
Here is the strategy.
Though Google could easily make a better operating system than Microsoft, I think taking Microsoft on at this level to start would be expensive and risky. After all, there is also Linux to compete with, as well as the Apple operating system.
Instead, let Google start with an office suite to take on Microsoft Office - a product which has devoured countless competitors, but which to this day remains quirky, unreliable, crash-prone, and infinitely irritating to use.
Our experience to date with Google software has already taught us that anything which Google produces is simple, effective, powerful, reliable and pleasant to use. Google, if you will, is the un-Microsoft.
I have no doubt that once Google has produced an office suite (or, perhaps more simply still, a word processor which works reliably and satisfyingly), the market for Microsoft Office will literally evaporate.
Once Google has established dominance over Microsoft in the area of office suite software, let Google then move in to replace Microsoft's fluky and infinitely hateful Windows operating system.
Face it, Microsoft is not even competing in the critical business of customer satisfaction. Have you ever tried to get technical assistance with a Microsoft product? It is massively expensive and frustratingly difficult to do so!
Technical assistance with Google products is much less an issue, plainly because they work. Google software simply does what you want it to do, every time. No technical assistance really needed!
Microsoft is outperforming Google today not because it makes better products. With respect to quality and user experience, the two companies do not even play in the same league.
Rather, Microsoft is outperforming Google because it has a better business model.
Microsoft sells digitally-manufactured products to a captive audience. Google gives away beautiful, enjoyable software to an audience that need only permit Google's advertisers to occupy a small amount of peripheral screen space.
Believe me, once Google redefines itself as a digital manufacturer, producing first of all desktop, laptop and server software, and then its own operating system, Microsoft will (thankfully) be relegated to the scrapheap of history - and I will then be writing about how BHP Billiton will in one decade achieve a market capitalization equivalent to 100 times that of Microsoft (the so-called "evil empire" of the software world).
And Google?
With this business model, it could potentially match BHP Billiton dollar for dollar on its way to a $2 trillion market capitalization!Source URL: http://idontwanttobeanythingotherthanme.blogspot.com/2008/03/what-google-could-do-instead.html
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I have been posting regularly about the weakness of Google's advertising-based business model against the backdrop of a looming consumer-led recession.I do have a modest proposal for what Google could do instead.
Interestingly, Microsoft clearly views Google as a competitor, as evidenced by its recent (to me almost incomprehensible) bid for Yahoo! - which is another great company with a weak business model - and that offers an interesting clue.Microsoft (I think accurately) perceives the prospect that Google could some day horn in on its milk-and-honey business of what I call digital manufacturing. That is, Microsoft is a hugely profitable behemoth because it is able to sell its digital products at a huge premium because every computer user (both individual and corporate) requires both operating systems and software programs to run on those systems.
There can be no secret that there is one defining difference between Google's so-far free software products, and Microsoft's premium-priced software products. Microsoft has from the beginning been unable to create either an operating system or software running on its operating system that works.By way of contrast, everything that Google produces works smoothly, reliably, intuitively and gratifyingly.
What a contrast between these two companies.
My modest proposal for Google, therefore, is that it take seriously the prospect of competing head-to-head with Microsoft in the lucrative business of digital manufacturing.
Here is the strategy.
Though Google could easily make a better operating system than Microsoft, I think taking Microsoft on at this level to start would be expensive and risky. After all, there is also Linux to compete with, as well as the Apple operating system.Instead, let Google start with an office suite to take on Microsoft Office - a product which has devoured countless competitors, but which to this day remains quirky, unreliable, crash-prone, and infinitely irritating to use.
Our experience to date with Google software has already taught us that anything which Google produces is simple, effective, powerful, reliable and pleasant to use. Google, if you will, is the un-Microsoft.
I have no doubt that once Google has produced an office suite (or, perhaps more simply still, a word processor which works reliably and satisfyingly), the market for Microsoft Office will literally evaporate.Once Google has established dominance over Microsoft in the area of office suite software, let Google then move in to replace Microsoft's fluky and infinitely hateful Windows operating system.
Face it, Microsoft is not even competing in the critical business of customer satisfaction. Have you ever tried to get technical assistance with a Microsoft product? It is massively expensive and frustratingly difficult to do so!
Technical assistance with Google products is much less an issue, plainly because they work. Google software simply does what you want it to do, every time. No technical assistance really needed!
Microsoft is outperforming Google today not because it makes better products. With respect to quality and user experience, the two companies do not even play in the same league.
Rather, Microsoft is outperforming Google because it has a better business model.
Microsoft sells digitally-manufactured products to a captive audience. Google gives away beautiful, enjoyable software to an audience that need only permit Google's advertisers to occupy a small amount of peripheral screen space.
Believe me, once Google redefines itself as a digital manufacturer, producing first of all desktop, laptop and server software, and then its own operating system, Microsoft will (thankfully) be relegated to the scrapheap of history - and I will then be writing about how BHP Billiton will in one decade achieve a market capitalization equivalent to 100 times that of Microsoft (the so-called "evil empire" of the software world).
And Google?
With this business model, it could potentially match BHP Billiton dollar for dollar on its way to a $2 trillion market capitalization!Source URL: http://idontwanttobeanythingotherthanme.blogspot.com/2008/03/what-google-could-do-instead.html
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