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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.
The virtue of Android, from the carrier's perspective, is that it allows them to create terrible branded user experiences.
Don't blame me, I voted for Baltar.
or something...
Let's see, using dominance in one market to establish dominance in another market. Check!
It's certainly a hard deal to pass up for carriers. Is leveraging like this considered to be approaching an abuse of monopoly for Google?
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.
No. You get more, yes. But free doesn't describe what you get, it describes what you pay. And you are paying a negative amount. Therefore it is less than free.
As in beer. The cost is less than free because you get paid to drink the beer.
I have something in common with Stephen Hawking...
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?
Slashdot needs Geekcode | Can anyone recommend any good SCIFI? My tastes: Foundation, Startide Rising, CITY, Ringworld,
Navteq was aquired by Nokia.
Food: It's whats for dinner
What am I missing?
You're likely missing the bigger picture.
Eventually google's turn-by-turn will have integrated street view imagery, and probably virtual advertisements on the buildings paid for by those businesses (or their competitors)...
Furthermore, as you pass areas of interest, you'll likely see wikipedia articles and user-generated-content (read: pictures/reviews) pop into view (like Google Earth), and eventually google will own your entire travelling experience.
Traffic. Online maps in many of the urban centers also report congestion and estimated delays.
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.
It's only a matter of time before Android takes over top market share for smartphones, the only real question is how long it takes. Now before you start screaming fan boy, bear with me here.
- Android is free
- Android can run on almost any piece of modern hardware, on any carrier (you listening Apple? probably not.)
- Every major carrier and every major smartphone maker either already has an Android phone, or has one in the works
- Being open source, carriers and smartphone makers can customize it as little or as much as they want
- Once smart phone makers are hooked on free, the only reason to dump Android is if there's a better mobile phone operating system out there that's worth the cost. Tough to do considering Android will be constantly approved upon given it's open source. Seriously, why dump Android to pay a per unit license fee when Android can do everything most smartphone users want their phone to do (and more in some cases)?
Some disclaimers apply here:
- No I don't have an Android phone, but yes I've used it enough to be familiar with it (including 2.0).
- I don't think its 100% there yet, but it's not far.
- Apples UI design is definitely better.
I'm sure some will disagree with me, and that's fine. Obviously this is my opinion and a guess. If you're looking for some ammo though, I use a Pre, switched from an iPhone and am pretty darn happy with it.
No it's not. Having dominance in one market is a monopoly. Using dominance in one market to establish dominance in another market is an illegal monopolistic activity, in some countries anyway. Using a strategy that gave you a monopoly in one market, in another market is perfectly acceptable though which I think is what Google is really doing here.
ayottesoftware.com
...It's bad enough that they crawl though emails to find advertising targets, but the OS is one of their biggest plays yet to analyse every piece of seemingly benign and anonymous user data and assemble a specific user profile. Think about that: one company; the single biggest commercial data-miner knowing many of your details and habits and inferring others. Would they try to extract every possible profit out of that? Personally the last data-mining straw from google was them wanting my mobile number to create an email account. For verification? Yeah right... Wouldn't they just love to add that to the profile.
you are very happy to point out that MS is convicted for abuse of a monopoly position, which is true, but please try not to make it complete fud-style.
First of all, having a monopoly is legal. Nothing wrong with that.
Secondly, MS got only convicted way after becoming a monopoly, AND abusing that position to work themselves into other market. Your comment makes it sound like it's the other way around.
Google can be argued to have a dominant position in search and online advertising, whether it qualifies as a monopoly you will have to ask a judge.
This subsidising of an ad-supported operating system imho does reek of abuse of position in one market (on-line advertising) to push out competitors in another market (mobile phone advertising).
You're not thinking BIG enough. Their stated goal is to monopolise any and all information available and put it in easily indexed electronic form. This includes, obviously, YOUR data, i.e. where you live/work (through IP tracking, gEarth), what you're interested in (Search, Youtube), what you consume (Marketplace, affiliates), aka your net worth, and any means you use to communicate and access data, be it through your PC (gDesktop, Chrome OS), mobile (Android+apps) or any other conceivable device/network.
And when you gaze long enough into the code, the code will also gaze into you.
Less than free as in beer, less than free as in freedom?
I thought we were talking about Google here, not Apple.
Please note, kdawson,
The day Google announced the free turn by turn navigation coincided with the day both companies announced corporate losses.
Who's to say how much either news contributed to the stock drops. I can't, and ignoring said fact skews the story. Bad editor, bad, bad.
Mathematically you can - any time someone pays you you are effectively paying them a negative amount. Sure, physically you can't, but when has that ever stopped a slashdotter's argument? :)
That's also the only possible way 'less than free' would make any kind of sense at all. And 'more than free' can't possibly be what's being referred to in this article - I mean, if the price is more than free then the price has some positive value, so you are paying for it.
I fail to see the harm. In order for this sort of thing to be illegal, some user somewhere has to come to actual harm somewhere. Instead of paying through the nose for navigation information (much of which is already public knowledge), people get it provided by advertising sponsors like they get their free TV. There's room for free TV and cable also. As long as the other providers provide a premium experience and content, they'll be fine.
Should they fail to provide a premium experience and content, they'll lose customers. Isn't that what's supposed to happen?
In the article he points out that Google wanted to do some things with the data that they didn't want to let Google do. They told Google no. In the old world, where the buyer of that data had no choice that would have been the end of the story. But now, apparently Google has the resources to build their own data and publish it however they like - they're not held hostage by the vendor of their information.
It seems fair to me that if Google takes the trouble to drive a car through and photograph every major intersection in the country, index it against their map, address and aerial photographs, they ought to be able to publish that data any way they like.
In a world where we have monopoly after monopoly leveraging their power to prevent progress, here we have a powerful company leveraging its tremendous market power to cause progress to occur. I think that's fabulous.
Help stamp out iliturcy.
Embrace. Extend. Beta.
C'mon, it's not just that. Yes, you get paid to use something, which makes it "less than free" in the sense that you are paying a negative sum-- you are receiving money. Since you have to use the closed-source version, and because carriers want access to this to take control over the handset's UI, it also means "less than free" in the sense of being less free, and allowing for less freedom.
Ahh, another demand-created "monopoly". I find that concept just fascinating. Apparently in this day and age you can have a monopoly in something even when there are 50 alternatives just because the consumers overwhelmingly choose your product.
Then how do you, as a matter of law, divide between "good" monopolies that just provide the best service for customers and "bad" monopolies that use armtwisting to get ahead?
What about companies that do both to get ahead in a single market?
What happens when a company gets its lead position in one market the "good" way and then uses its power in that market to leverage its way into another market that it normally wouldn't be able to compete well in?
Because that's what our laws against tying are about. I'm not sure that Google counts as a monopoly, but what they're doing is clearly tying. They are using their ad services to squeeze competitors out of the mapping market in the same way that MS used its OS dominance to kill the original Netscape. Mind you, I'm not saying that Google is violating antitrust law (since I know enough about antitrust law to know how little I know), but we're not talking about Google winning the mapping market through just being awesome. We're talking about an unfair pricing advantage.
If it's for-profit but free, you're not the customer -- you're the product (e.g., the Slashdot Beta's "audience").
Japanese are comfortable being bombarded.
Too soon?!?
Science advances one funeral at a time- Max Planck
The billing system for a contract I was recently on tried to bill a customer for negative 33 pence. That is, it didn't try to credit him with 33p, and it didn't send him a notice saying "you owe us -£0.33" - it put through a request to his bank to deduct negative 33p from his bank account.
Needless to say, when I discovered this, I immediately rang the customer and advised them to check if their bank was still there or not. Then I took two aspirin and lay down for a while.
With all of their phones.
http://europe.nokia.com/explore-services/maps
http://betalabs.nokia.com/ovi-maps
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Unfortunately, a lot of this comes down to hardware support from cellphone manufacturers. Maemo 5 is open-source, and looks very very cool... However, the only phone that runs it is the N900, which is more of an old-fashion brick than a real cell phone.
I prefer Maemo, because I like to program in Qt4, rather than Java, and there are real advantages to a cell phone that runs Xorg, However, Android has momentum that I think is now unstoppable. If you want to hack for fun, go with the N900. If you want a customer base for your apps, go with iPhone first, and Android second. Long term, I suspect Android will even surpass the iPhone in user base. If you want to own an application niche, now is a good time to hop onto Android.
Celebrate failure, and then learn from it - Nolan Bushnell
Just tried it. Sending a encrypted 7zip archive containing an exe worked without a problem.