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Less Than Free
VC Bill Gurley has up an insightful piece on the strategy behind Google's releasing turn-by-turn mapping for free. He calls it the "Less Than Free" business model, and it is beyond disruptive. On the day that Google announced its new service, the stock in the two companies that had controlled the market for map data, Garmin and TomTom, dropped by 16% and 21%, respectively. (Those companies had bought Google's erstwhile map-data suppliers, Tele Atlas and NavTeq, in 2007.) "When I asked a mobile industry veteran why carriers were so willing to dance with Google, a company they once feared, he suggested that Google was the 'lesser of two evils.' With Blackberry and iPhone grabbing more and more subs, the carriers were losing control of the customer UI... With Android, carriers could re-claim their customer 'deck.' Additionally, because Google has created an open source version of Android, carriers believe they have an 'out' if they part ways with Google in the future. I then asked my friend, 'So why would they ever use the Google (non open source) license version?' ... Here was the big punch line — because Google will give you ad splits on search if you use that version! That's right; Google will pay you to use their mobile OS. I like to call this the 'less than free' business model. This is a remarkable card to play. Because of its dominance in search, Google has ad rates that blow away the competition. To compete at an equally 'less than free' price point, Symbian or Windows Mobile would need to subsidize." Gurley speculates that the company may broaden "less than free" to include the Google Chrome OS.
When I first read this I thought about IBM back in the day. They could put a small company out of business simply by announcing, "Yeah, we're working on that too." And they had to fight off some well-founded lawsuits. Eventually, IBM became known for quiet and consistent R&D (Giant MR comes to mind) because they had to watch what they said.
Will that day come for Google? I think not (or it's a long way off). IBM's issues with the courts came around the same time Ma Bell was dismantled, which couldn't happen now.
I'd rather have someone respond than be modded up.
The operative word being "dominant". Google isn't the only big-time company that obviously throws money at people to use their shit (remember MLB and Obama's inaguration streaming with respect to Silverlight?), but they might be one of the few to actually succeed at it.
Bing is a joke, Yahoo is for 12 year-olds. If the other giants actually innovated instead of rehashing and hyping to death the same tired shit, maybe we'd have some real competition.
The one thing about Google you have to understand is that they employ lots of very smart people: they employ scientists, research graduates, economists, technicians and business people. They have calculated with sheer intelligence all business moves: they know what they need to do to get the best business and business position.
In short, they are the foundation. Eventually they will collect all human knowledge and make the encyclopedia that encompasses all human knowledge... this is just a rouse for the real purpose of Google...
I wonder if they employ psychologists?
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What am I missing?
Your paper maps only make a difference if you know where you're at when you use them. Aside from that your maps also don't have information about stores, street addresses and the routes that are easiest to use to get you there.
Internet based GPS information is great on a phone since it's taking up no memory/storage and can be updated by the moment for things like traffic flow and road construction.
There is more to GPS than just road maps.
Dedicated Cthulhu Cultist since 4523 BC.
The world "monopoly" here is being used to mean "market power". This is common usage.
A firm having market power means that the market is broken. Firms abusing market power in one market to create market power in another market is a serious problem.
Whether simply having market power due to lucking out with the network effect is something that anyone should be given shit over is arguable. On the other hand, market power gained through abuse of government regulation is a serious issue that needs to be fixed.
Google's power seems to come mostly from economies of scale, somewhat from network effects, and hardly at all from government regulation.
-- The act of censorship is always worse than whatever is being censored. Always.