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If Search Is Google's Castle, Android Is the Moat
Hugh Pickens writes "Warren Buffet once said that the best businesses were economic castles protected by unbreachable moats. Now, Erick Schonfeld writes that if search is Google's economic castle, Android is a moat, Chrome browser is a moat, and Google Apps is a moat — all free products, subsidized by search profits, intended to protect the economic castle that is search. 'Android, as well as Chrome and Chrome OS for that matter, are not "products" in the classic business sense. They have no plan to become their own "economic castles,"' says Benchmark Capital VC Bill Gurley. 'They are not trying to make a profit on Android or Chrome. They want to take any layer that lives between themselves and the consumer and make it free (or even less than free).' So don't measure the success of Google's new businesses by how much revenue or profit they generate directly but measure it by how much they shore up Google's core search business. 'Google is ... scorching the earth for 250 miles around the outside of the castle to ensure no one can approach it. And best I can tell, they are doing a damn good job of it.'"
Where's badanalogyguy when you need him? Or pizzaanalogyguy?
How many of their moats can fit in the Library of Congress?
Everyone remember: Google promises that they will do no evil, so you know it's true. After all... they say so.
I have the search results! G-Man and the Searchers of the Internet.
...and the only reason why they're not called to account like Microsoft is that they're not considered a monopoly yet? IIRC "Windows" has never been synonymous with operating system, but "to google" is not just synonymous with but also the preferred way of saying "to search the web".
How can something be less than free? In my experience, even the free stuff isn't really free, since you have to invest time (like TV with the ~20 mins/hour of ads). The only truly free stuff is ad free as well (such as the various FM-HD2 stations)*
So less than free means what? *They* pay *me*? I remember the paid-to-surf companies, but I never got a dime out of them, since they went bankrupt.
*
* example: http://provisioning.streamtheworld.com/pls/WWMXHD2DIALUP.pls
http://1681.live.streamtheworld.com/WWMXHD2DIALUP_SC
My AC stalker: " I personally agree with your posts most of the time, but that won't keep me from modding you troll"
is almost swamplike, filled with disease, crocodiles, and other hazards?
If it's been said once, it's been said a million times. Search isn't the product. Viewers are the product and they're being sold to advertisers. The moats are there to keep you in, not to keep other people out.
I have said it before and I stand by it. Google is Skynet to Windoze and the rotten Apple. Balmer and Jobs should be afraid. Very afraid.
This is /., can you put that in terms of a car analogy?
Now, I've only read the summary, but it strikes me that Search is *not* Google's castle. Ad sales is the castle, search is the ... the... quarry from which the rocks that build the castle are derived. Handily enough, the quarry is circular and moat-shaped.
A lot of people talk about "job destruction" -- Google is a relatively young company and is really taking the worst that the archaic and corrupt US systems of lobbying, political corruption, and the flawed patent office can dish out, and they are still surviving.
It's really david vs. goliath, and you can't help but wonder if they are going to become the next netscape -- young, innovative, minimally evil, hugely popular, yet destined to fail solely due to their misfortune of being born into a fetid, diseased intellectual property environment, one loaded with soft money, player hierarchies, endless litigation scabs, and news organizations that are more focused on clicks than reality or facts.
Hey look at the news for the last couple of days -- Android 3.0 is going to be closed source, and google is therefore evil, Steve Jobs was right after all. The newsies spread their proganda well, don't they?
there you go? the system is working as designed. there's quite a crowd forming in the moat, which makes the castle owners bristle with excitement. that's what we're here for.
Wow, I didn't suspect we're at least 26,938 accounts past the 2 million mark. ;)
On a related note... Enjoy your brand new username!
Analogies are useful for explaining complex concepts to people using concepts that they're already familiar with.
What's complex about Google's business?
YOU are the product. Google sells YOUR eyeballs to advertisers.
Google attracts YOUR eyeballs by offering YOU "free" services. "Free" in that you do not pay for them.
Just look at /. !!! You can use it for free. The owners sell ads. You can also pay for the service.
Fuck castles and moats and all the other analogies. The analogies are more complex than the concept they're supposed to be explaining.
"That's NOT why we...".
For most given Google employees, Android, Chrome, Google Apps... These are beasts they have poured themselves into to make the computing world a better world...
Kinda like a whole lot of other minions based out of Seattle ;)
-- A change is as good as a reboot.
how much does that cost? still outside the castle? starting to feel a little eunuchy. how much to be an inside rock? doorknob?
Following that analogy to the extreme, Google should give us "free" hardware and "free" connection access to use their "free" software, then the Google Castle would be complete.
GooglePad, GooglePhone anybody? ...though I am sure Richard Stallman would not take up the offer.
If they were giving away "free" hardware to run their "free" software would the general public say no?
Based on the way they are sucking up "free" social media services I would say the entire planet would blindly jump on it.
my 2c.
This is not what Buffett meant, and anyone who follows Buffett knows that "moats" are the IP, patents, and low-cost advantages (among other things) that protect a company's business assets. Chrome OS, Android, etc. do nothing to "widen the moat" (other than maybe some name recognition). Slashdot editors: Please do your jobs and edit. This is a bad article that deserves to be ignored as worthless drivel by a Google shill.
What impresses me the most about Google is that they, as a company, have consistently taken actions that demonstrate long-term thinking. They will try things that have no short-term profit, just because in the long run they might either make a profit or defend the company's interests.
From the beginning, Google has helped Firefox out financially; more recently, Google made its own web browser. Why? Because it wasn't in Google's best interest for Microsoft to have any kind of leverage over the Internet, or in particular over which search engine is the default on computers. Remember how much market share Internet Explorer used to have? Displacing it once seemed hopeless, but Google went for it.
Google has poured resources into Android and continues to give it away. Why? Because it wasn't in Google's best interest for Apple to have leverage over the cell phone market, or in particular over which search engine is the default on cell phones.
Google spent about $100 million to buy On2, and then gave away the intellectual property they had bought. Why? Because the FSF wrote an open letter... nah, just messing with you to see if you are paying attention. Because, in the long run, Google's YouTube needs a suitable video format. If YouTube's business utterly depends on patented technology such as H.264, Google will have no choice but to comply with any and all demands from the licensing authority. Google is willing to not only spend the $100 million, but to pay more people to keep working on WebM (doing things like free reference designs for hardware decoders). Google doesn't ever expect to make money on WebM; it's purely a defensive move, to control long-term costs in the future. (Well, also, Google has lots of geeks like us who want to help keep web standards open.)
Heck, go all the way back to the early days of Google. They took the time to write a complete vertically integrated software stack, one which allowed them to get reliable performance out of dirt-cheap off-the-shelf hardware. The reason Sun was printing money during the Internet boom was that everybody who wanted a web server would buy an expensive, reliable Sun box to run it on; not Google, they used the High Availability stuff on Linux, and the elegant Google MapReduce, to weld together masses of cheap motherboards into a powerful and reliable server operation.
Remember the news stories about Google buying up the "dark fiber"? Google bought a bunch of optical fiber with no immediate use. Long-term thinking: "the stuff is cheap now; we have the money now; someday we'll have a use for this."
Google has a lot of other products and features, but for the most part those are just fun sidelines. When you are as big as Google, you can afford to do some side projects just for the heck of it, and all the better if they actually turn a profit.
steveha
lf(1): it's like ls(1) but sorts filenames by extension, tersely
Then why would google publish an API that allows you to access their search back-end directly then? Why would Google offer an underground tunnel to their impenetrable "castle" for free?
Google's business is selling you, the product, to their customers, the advertisers.
Surely the OP means advertising revenue. Search is the tool that focuses that advertising.
Posting anonymously because he reads /. (and has a /. tatt)
agreed. search manipulation is their 'business' (there can be only one #1?) how much is that? so, having a good product has nothing to do with google's impression of you, which is from none, all the way to delisting, so a search for your (very possible superior) product cannot render accurate results by keyword, unless you pay goo-goo a usury/hostage fee. couldn't agree more.
The marginal cost of software, and even software services, approaches zero. The marginal value of a consumer's attention does not approach zero.
Give away software and software services, sell the attention of your users.
Profit.
Or just another stupid Bowser?
Can I ask a question? But then how do you explain why Google wants to develope Google-car which drives to the destination for men?
I agree with most of your points. Maybe Google is doing all "not-evil" things for her search business, but she may be the most successful one in hiding her intension. Many people admire this company, including me, in offering alternatives against Apple and other autarchical institutions.
Maybe the leaders in Google are freemasonry?
if google search is a dune buggy in a mad max movie, chrome is the leather clad hockey mask wearing psychopath in the gun turret, and android is that weird dude with the japanese mask suspended above his head snarling and leaping from one vehicle to the next. microsoft is tina turner. apple is mel gibson. do you understand yet?
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
Google's brand used to be gold, now it is shit. They were seen as doing no wrong, but now it is the opposite. They used to be lauded for simplifying search and making it accessible, now they are known for complicated products. Their search engine is a spam engine.
I use Blekko for search, because it is the best, yet costs the same as Google. It is so much better than Google! I use Apple devices because they are the best, yet cost the same (or less) as their competitors. Even a free Android phone has a larger monthly bill than an iPhone and ends up more expensive. A XOOM is more expensive than an iPad in both retail and monthly, and does much less. A high-end generic PC has viruses and no UNIX and yet is the same price or more than a MacBook Air or MacBook Pro. I use MobileMe email, it is better than Gmail and they don't read my email or share my contacts, that means it's cheaper overall even though they charge a few bucks for it. Further, Google has no idea about design or art, because they have no artists and no designers. They have no idea about consumers, they continue to search for nerds to build for, but nerds are a small minority of the tech world now, and lots of nerds are tired of configuring things every time they want to watch a movie or play a game or do some computing. Nerds are tired of getting spammed also. So even nerds are using Apple devices and Blekko and so on.
And why do Google's ads look so shitty? Facebook apps and iAds are only about 10,000 times more engaging.
So Google is beat on price, value, privacy, design, consumer-readiness, and engagement. How exactly is that a great big castle?
And they have a CEO with no experience, are bleeding talent to Facebook. They are in court with all kinds of things.
And how is Android impenetrable? It's basically owned by Oracle and Microsoft. It isn't even good open source. Compare it to WebKit, which is used by Apple's competitors, not just their partners.
I think we are just at the end of the Google era of the Web and it is hard for a lot of people to admit that party is over, even though they see the evidence of their own eyes.
Google is a honey pot for what was previously inaccessible to advertisers: Every detail and statistic about your personal online life. If your a gmail user, the content of your personal emails, if your a latitude user, exactly where you go and if you are a Google Voice user, all your private phone calls. All an awesome mine of data, thats now extending into the real world. So viewers aren't the product, it's the detail of your life that is highly desirable and invaluable to anyone who wants to get at your money and your attention.
While they can't exactly hand over the exact details of your life to whoever pays for it, they can pass on what they learn from it.
In this regard Facebook, Twitter, and Apple are castles also.
Prison is more apt than castle I would have thought. Then I corrected myself, Panopticon is more apt.
After logging in slashdot still does not take you back to the page you were on. It's been that way for 20 years.
whereas he gets billions, much of it from 'investments' in weapons peddlers, eugenatics' schemes, insurance (the most ungodly of fear based usury scams) etc... so his moat looks like it's absolutely full of eunuchs, who will never see the castle, as it's absolutely full of wonderful glorious surprise, but only if one is chosen. does he not know there's 1000's of innocent folks getting killed every day now to make the bottom line 'look' just ok? probably not?
Customers are the people who pay you money, and products are the things that your customers is paying for. People who *don't* pay you are not your customers, and things that you give away for free is not your products.
Web technology companies have more complicated business models because it is usually not just about building something that you call "product" and sell it to your customers. Instead, most web sites use their core technology to build something that is free and give it away to people, who we call the users. When there are enough users, the websites turn the users into products and sell it to their customers.
Google is a typical example of such business model. Almost all of the Google "products" that we know today, including the search engine, Gmail, Google Maps, YouTube, Android, Chrome, etc are NOT Google's products - because Google is giving them away freely. Free services are NOT products because there is no way to get money from it. To understand what is Google's products, we have to see where it's revenues come from - Adsense, that's right, is Google's real product.
But if Google Search et al. are not Google's products, does this mean that they are not important? No, because those are what allows Google to make great products - it's users. Google will continue to provide more free services to it's users as long as the added cost is believed to directly bring more revenue to Google.
Ok but everyone understands that, but what's the point of identifying what is product and what is not? Well, the notion of products and non-products is very important when it comes to competition. When a non-product enters an existing market to compete with other products, it becomes disruptive and can potentially make many competitors out of business. This is because non-product can be given away free but products can't.
This is why Gmail was disruptive to the email market because it was the first email service that do not rely on pro accounts as their product. Google identified that Gmail is not their product and therefore willing to provide so much storage space and features because they believed that doing so allows them to build better products (more users) and get more revenue from their customers (advertisers). When Gmail competed as a non-product, it became almost impossible for competitors to compete unless they changed their business model to something else other than pro accounts.
The same could be say for Microsoft IE vs Netscape. While Microsoft could be partly blamed for their anti-competitive practices, it is also clear that Netscape had a fatal business model of identifying the wrong thing as their product, making it failed to compete with IE when it became a non-product.
I had a hard time to understand how YouTube really works as a business, because it's so hard to understand how to pay for so much bandwidth just for users to watch free videos. But the answer is actually quite simple - YouTube is free because it is NOT Google's product.
If something is not your product, do NOT ever think of getting your money back from your users. Just give up your damn mind and give it away free generously, as long as you can make a product out of it.
You should have also realized that Android is not Google's product. But there is an important distinction on the business model between Android and iPhone - Google do realize that Android users are the product to sell to the App developers, who are the customers; but for Apple it's products are the iPhone and it's apps, and it's customers are the consumers who buy iPhones. The difference in business model makes it obvious how Android is different from iPhone - that Android developers are Google's top priority while Apple treats it's iPhone developers badly; Apple's iPhone is designe
is the MCP.
I know from inside sources that Steve Jobs is right now working on a fucking enormous iBuchet.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
The sigh of summer upon my return
Fifteen alike since I was here
Bathed in deep fog, blurring my trail
Snuffing the first morning rays
Weary from what might have been ages
Still calm with my mind at peace
Would I prosper or fall, drain the past
The lapse of the moment took it's turn
I was foul and tainted, devoid of faith
Wearing my death-mask at birth
The hands of God, decrepit and thin
Cold caress and then nothing
I was taken away from my plight
A treason bestowed to the crowd
Branded a jonah with fevered blood
Ungodly freak, defiler
Pale touch, writhing in the embers
Damp mud burning in my eyes
All the faces turned away
And all would sneer at my demise
Outcast with dogmas forged below
Seared and beaten, banished from where I was born
No mercy would help me on my way
In the pouring rain nothing is the same
Vows in ashes
I pledge myself to no-one
Seethed and spiteful
All shudder at the call of my name
If you'll bear with me
You'll fear of me
There is no forgiveness in these eyes
For any of you but one
Dispel the mist for now
Melinda is the reason why I've come
She is waterdrops over the pyre
A thistle in my hands
Stained and torn, aged and brown
Virtous shell with kindred innocense
I awoke from the miasma
Passing swiftly through the moor
This is here, waters stir
And in the distance all that was lost
If you'll bear with me
You'll fear of me
You'd never leave me to
A fate with you
We'll see. So far, this is Google's standard operating procedure for any major release, and even some minor ones.
In the past, as now, they partnered with exactly one OEM, on one hardware platform, for the new release. For Honeycomb, this was Motorola and the Xoom tablet, and sure, Motorola most likely paid for the special treatment. But this is smart on Google's part -- they have exactly one platform to worry about, and they have direct involvement from that hardware's developer.
On the day the Xoom shipped, the other major OEMs got access to the Honeycomb source code. This is the same thing Google did before... OEMs had the source weeks or even months before it went hot on source.android.com.
Presumably, after some time between Google and the OEMs, they'll put the Honeycomb source out for everyone else. This is the same progression that happened in the past, though definitely looks like it's going to take longer. Could be that they're waiting for more tablet ports to be done (with bug feedback), could be they're foot-dragging until "Ice-Cream" is completed, which is widely rumored to be the unified phone/tablet version of Honeycomb.
Of course, if Google drags this out, it's going to look back for their open source commitment. Thing is, they really don't have a choice, and there's no real indication they have any problem continuing with that. I think they're looking to use the Google + OEM development process for early development, rather than deal with outside input, at least unit they have 3.0.0 out on multiple devices.
-Dave Haynie
Three Words: Unfair Business Practice
Except the ones that do, by default, on the largest carrier in the USA.
Carriers don't default to Google's search on Android because it's Android. They do it because they think it's what their customers want, and/or Google pays them the most money. That can change overnight, and Android and Chrome (being open source) could not even lean against that wind, let alone stop it entirely.
Google is ... scorching the earth for 250 miles around the outside of the castle to ensure no one can approach it. And best I can tell, they are doing a damn good job of it.
Perhaps my perception is skewed because I rarely use Google for searches any subject beyond technical research, but they have been going downhill lately. A couple of years ago I could input just about any error message or problem description and get relevant results. These days I'll be lucky to get two pages worth of one question that is kind of relevant to mine, repeated in eighteen different formats. The recent trend seems to be to leverage Usenet, or social.microsoft... and whatever "relevant" subject matter is there. Their search results have been gamed for the worse and they do not seem to have a solution to it. I have gone back to doing what I did before Google came around, going to the vendor's websites and support forums in search of answers. It is not completely Google's fault. It was only a matter of time before people figured out how to game the algorithm for profit.
I suppose that is the inevitable conclusion of trying to monetize something. It creates the incentive to game the system. My most recent non technical search was for bellini (the champagne cocktail). The first result was a children's furniture store. The second was a Wikipedia page. It wouldn't surprise me if the first result was paid for.
I love my android. But i guess moats used to be filled with crap and there is plenty of crap available app wise.
--- Always remember. 99.36% of all statistics are inaccurate.
What happened to slashdots fun tags, its all business now with the summary tags :(
...phrase it in the form of a car analogy?
Can Captain Obvious be far behind?
I might agree with the ... strong language. We might be in an age seeing the rise of tech oligarchies. Now that Microsoft has absolutely dropped from the Borg colossus to "just a big rich business", Google (as well as Apple, and yes, Linux itself!) have emerged to push away the era when "any of a thousand choices will do". (It used to be Any PC box + MS, then Any hardware phone + a carrier).
So now we have a complex interplay where Google is developing best-in-breed services *beyond* just raw search. Consumers win when new businesses force MS to quit being sloppy. Android pulled the same trick of "free stuff replicates" that MS did with DOS in the early days, except in the hyper world of InterTubes, the effect took off like a rocket in some three years instead of ten. Faced with the future of phones being the sum of Android and iPhone, MS became stuck with yet another ten year track of derailed vision in WinMobile.
Theory time! What if there is room for precisely one-two Walled Gardens and one-two "Lateral Spreads"? (iPod + 10 variants of music players, iPhone + 10 variants of Android, iPad + 10 variants of TabletAndroid)?
Looping back to the question, for people who don't like Walled Gardens, Google (using MS as a spoiler) is sewing up the other half by ensuring that no one can easily do a *third* network because of failed-synergy issues. The only way that would happen is if Google's offerings fell from grace and were *replaced* by a new competitor, which leaves my theory intact.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
An analogy without a car?!
It's like a car without wheels!
Part of the moat must be their Google docs and google apps script. I can imagine scripting done in the cloud one day without the need for database engines, IDE etc etc
"Everyone remember: Google promises that they will do no evil, so you know it's true. After all... they say so."
Actually No - they don't. If you cared (and read this) you would then bow your head in shame and go look up what was actually really said.
If Google really cared they would fix Android Chrome to reflow text, instead of discriminating
It's a trap!
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Every major politic and philosophy falls to corruption at some point. Google search is no different, results have been getting worse with domain parking search engines filling results and result depth reduced. Many searches have only 6 or 7 results and some searches that should produce results not doing so.
Also Google ad-words, a traditionally good way of finding new innovative businesses has been largely bought out by the giant corporations. It was inevitable that it would fail eventually. It's failure has been different from Yahoo's in that it happened slowly. Low quality search results becoming the norm over the last few years. Google is smart enough to improve their results but it would offend their advertisers, I'm not sure Google can get out of this.
On the other hand I don't have a better option to switch to.their "moats" are brilliant, Android in particular seems to be shaping up as the premier computing platform of the coming decade (beating out the iPhone with the inclusion of keyboards for email and search).
We're seeing some of the major services on the internet, Google, Facebook, Slashdot, e-mail, IM etc. degrading. I feel this is largely because they are overly concerned with competition instead of providing users with new features and automating out existing headaches.
I think Google is trying to drive business its way like all businesses are want to do. The only difference is that Google is using open source to bring in more business. It's similar to the "freemium" model and it relies on making a quality product that consumers find compelling.
Google isn't as good as it used to be.
Spam,
no search within results,
no booleen search.
It can sometimes be very hard to find what you are looking for.
I'd prefer to pay for a premium service that works and I doubt the moat called Chrome would dare stop me doing so.
A blog I run for the wealth
"250 miles of scorched earth" "doing a good job of it"?
No, I would say that Google is failing with both Chrome and Android. Neither are desirable experiences for the consumer. Sarfari/Mac/iOS is far better. Google really needs to focus on building its castle rather than scorching the earth. Too bad they lost sight of their motto to do no evil.