Slashdot Mirror
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.
or something...
Let's see, using dominance in one market to establish dominance in another market. Check!
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.
Navteq was aquired by Nokia.
Food: It's whats for dinner
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.
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.
I find this concept baffling. There's a low barrier to entry, and if Google raised prices enough advertisers would go elsewhere. If customers didn't like the search engine, they'll go elsewhere.
This isn't what the antitrust laws were designed for, they were designed to prevent abuse of government granted monopolies or monopolies over physically limited (supply side) resources. There's no ethical or rational reason to define a monopoly as "being too successful in your field despite numerous competitors".
When one power company or phone company uses anti-competitive tactics to drive out their competition I'm all for going after their asses, but most applications of antitrust law nowadays are just bullshit crybabyism by competitors.
Less than free as in beer, less than free as in freedom?
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.
Searching the jobs site...
Your search - analrapist - did not match any data available in our jobs section.
Please edit your search terms and try again.
Damn it... I'm just assuming all the positions are currently occupied...
Japanese are comfortable being bombarded.
Too soon?!?
Science advances one funeral at a time- Max Planck