Guest blog: Understanding Google
Examining Google’s products in a systematic way can give some clear indications as to their strategic objectives for the future.
Google took $28bn in revenue during 2010 from selling keyword ads. AdWords is the revenue centre of Google’s entire global operation and it’s the part they seek to protect most keenly.
They do this by either owning a space, or making it so open that nobody can own it and get closer to the top of the ‘stack’ – which would allow them to get ‘eyeballs’ on a new, rival keyword ad network…
This diagram attempts to show the main layers between a user and the internet:
Fig 1. Google have a key product at (nearly) every layer between a user and the web.
Google’s search is free to users, and free to content owners who want to be indexed. It’s also the main platform where AdWords are shown – making search the source of the ‘eyeballs’ for their key product.
Add into this YouTube – which, if it were a search engine, would be the second-busiest search engine after Google. YouTube is a key display location for AdWords and is starting to look like a smarter buy for Google than it was at the time when many thought it over-priced.
Because search is the key location for AdWords, it’s also Google’s top priority to protect. Although Microsoft’s Bing has gained ground over recent months, it’s been at the expense of Yahoo – rather than Google, who are holding steady.
The WWW and Google Plus
Google’s index contains trillions of pages (they don’t release the total number anymore) but it’s still based firmly around keywords.
Simple text keywords may or may not be the best way to find information on the web – but it works with AdWords and that’s the key reason to maintain the status quo.
It’s likely we won’t see significant innovation from Google that improves search beyond keywords in the near future.
Google Plus could be seen as a layer between the web and browser – providing a social-sharing mechanism on top of content, but keeping that traffic within Google’s Ad network and statistical insights.
The browser that Chrome is derived from (Chromium) is open source – and therefore can be examined and pored over by security geeks. The Google-sponsored derivative Chrome is not, and there’s no way to know exactly what data it’s sending back to the Google mothership.
This doesn’t concern most people, but it’s yet another way Google can gain a deep understanding about your online behaviours to, yep: sell more AdWords.
Android and Chrome OS, and Android devices
The advanced, impressive Android OS is free and commoditises the mobile space – ensuring that neither Apple nor RIM (nor Nokia, Samsung, etc) have a monopoly on mobile device usage from which to build an advertising layer.
The ChromeBook, Google’s web-only computer, is another strategic move to control the device on which people use the web. The ChromeBook is the web, and, as the trailer says – you can do pretty much everything on the web now with Google’s services.
The apparent failure of Apple’s iAd network seems to attest that this plan has succeeded for Google so far.
The one part of the stack that Google haven’t yet managed to ‘own’ or ‘open up’ – but their $12.5bn acquisition of Motorola shows that they’re serious about working at the device and network level.
Telecoms firms dominate, charging for data by the Gb (or roaming at £6 per Mb, shame on you O2) and confusing customers with restrictive tariffs and packages.
For Google, this tighter integration between your home network, mobile devices, Google’s services and the advertising they display can only be a profitable move.
I for one would love to see some real innovation and improvement in the mobile and telecoms space – the market is ripe for disruption and consumers deserve a much better deal.
Could Google be the company to do it?