The Times continues it’s fascination with all things Google in this Richard Siklos piece entitled “A Struggle Over Dominance and Definition.” (image cropped from full image at Times site)
It features this broadside from Microsoft’s CEO Steve “I did not throw a chair at f*ing Google” Ballmer: “The truth is, what Google is doing now is transferring the wealth out of the hands of rights holders into Google. So media companies around the world are all threatened by Google.”
What’s the nub of the story? Well, it’s this: Is Google a media company? Er….YES. YES! YEEEEESSSSSSS!!
But what this also shows me is that Microsoft is taking a new tack in the ongoing battle with Google – Hey media companies, Google is not your friend. Now Microsoft, on the other hand….
I disaree that Google is primarily a “media company.” Search is a means to advertising revenue. Search is market research. By aggregating millions, if not billions of search strings, and personalizing the results with targeted ads, Google is offering advertisers the holy grail of their function which is to not waste the client’s dollars on eyeballs that don’t care about the product.
Google is simply the most efficient targeted marketing engine on the planet. Now Google may have stumbled into this relationship between search and advertising, at least according to your book, but now that it is there, the firm has acquired a momentum that becomes its own justification.
Google is a publically traded company so like it or not return on investment to stockholders is reason enough to continue to enhance search technology that drives algorithmic targeting of each user with specific ads. The click through rate is a very measurable feedback loop for brilliant computer code. It is coupon clipping based on artificial intelligence. It is not a media company,
A media company would deliver outbound content like movies or text or perhaps some interactive content (games?), but search is neither.
John,
What’s the difference? Microsoft made large profits from users and now Google is taking it from advertisers as a Media Company. The difference, Google gives the control to the user, Microsoft was the only real option. I think that Steve Ballmer is just envious that they didn’t get there first.
On the subject of whether Google is “Eeeeviiilllll” (please note a remark from Dana Carvey’s “Church Lady”), they appear to be in it for the user. Why would they want to tamper with what works? They have control, corruption may come, but for now, (like Microsoft in the early ’90s) they are the only real option.
Thank you for the post.
IMHO, Google is NOT a media company. Do you know of any media company that does NOT produce original content? AFAIK, Google does not product original content.
To be defined a media company, you actually have to produce content. The justification of Google being a media company is because its strength in advertising.
The biz model of media companies is generally tied to advertising and perhaps as such, people make the case that since Goog makes most of its money via ads, that it can be classified as a media company. BS!
If you can classify Goog as a distributed online platform, does that qualify remotely as media?
“We don’t do our own content. We get you to someone else’s content faster.”
This is an old Eric Schmidt quote. After the YouTube acquisition this certainly rings hollow.
Look, as long as the smart people on this site debate the meaning of a media company, the longer Google quietly kills their opponents. It doesn’t matter whether you produce original content (or not). If your business model consists of matching ADS to Content, then you’re a media company. Yahoo aggregates content, but they also won the portal wars and are most definately a media company.
Most TV networks these days broadcast a steady and growing diet of REALITY TV. What’s the difference between REALITY TV and REALITY YOUTUBE content? Answer 1: Nothing! Answer 2: Doesn’t matter!
All new areas of growth: diffusing into Old Media World with New Technology will mean that growth will not be as explosive as with “clicks” due to:
1. Competition of Old Media.
2. Failure to really innovate outside of search.
3. Copyright nightmare.
4. Becoming Media Company…with much lower multiples.
5. And last but not the least – big Budgets in Old Media World are won not with “clicks” but rather with “ticks”.
http://sufiy.blogspot.com/2006/11/google-unrealistic-expectations-of.html
Remember back in the 90’s — the term “disintermediation?” That’s what the threat of the Internet has always been to middlemen like the “Media” — especially the bulk of the media that just package other people’s content.
Most content development is a negative economies of scale game simply because it is a creative activity. On the other hand, aggregating and making content available to people is a positive economies of scale game. Problem for the past winners of the positive economies of scale game, the “Media”, is that Google has more scale and scope (and a more efficient revenue model). And of course, they are only one of the models killing “Media” — Craigslist, Apple, etc., will all take their chunks out of them. Take a look at the newspaper business . . . and the music labels, which are in the midst of a dead cat bounce . . .
YouTube is an economies of scale aggregation play — fits right into a Google model. What you won’t see them do is making films.
What could Microsoft and/or Yahoo do to knock media darling Google back on its heels?
Target people. Not words.
Pending patent #11/250,908 shows how.
“Target people. Not words.”
Am I missing something? Isn’t it the same thing? I mean, words don’t type themselves into the search field…
I think that John’s right – Google is a media company. At least, from a media buyer’s perspective (which I am). Google has the audience, they have the inventory, they have the network and they offer various different ad formats. If I’m planning media for a client, Google will always be a factor in that plan as long as the audience is there -regardless of whether the “content” they offer consists of relevant search results, full-text articles, image thumbnails, movie clips, product lists, blogs or whatever else Google can dream up to keep people coming back for more.
Businesswise, Google is the PERFECT media company.
Why? Old school media needed content to gather eye balls, or create sales revenues. Unfortunately, this either meant spending lots of time with creative divas wearing funny hats (and paying them small fortunes). Or spending equally ridiculous amounts of money to license content (thereby outsourcing the problem of dealing with the funny hats).
Google, on the other hand, found a way of monetizing royalty free abstracts.
So it’s going to be interesting to see, how YouTube will affect this eco system. It’s the second almost “regular” media property, owned by the largest media company in the world. Blogger came first, but has been a production/distribution tool. YT is pure distribution, with a grain of search. And there goes the abstracts business, as the licensing troubles already start.
The core strengths of Google are its resourceful employees and the research which is carried out under the leadership of it founder directors. It is a good strategy for any company to diversify in other fields, but it should do it at a slow pace reviewing the ROI from time to time. Otherwise the same strategy may backfire on Google.
Yes, Google was respected because of its reliable services which were not commercial. The same people who revered Google may bring it down. It is better to study what people want than going in unrelated fields just for satisfying its investors.
It’s really funny how companies could beat each other out to remain in the top position. For many years Microsoft has been sweeping the media-technology world. Now here comes Google, bringing in some trendy ideas of its own, which attracts a lot of users. Google is giving, what Microsoft wished it could provide.
If Google isn’t a media company, then why are they buying up radio stations?
The reason Google is so powerful is that they found ways of monetizing other people’s content and giving them a share of it in a way that is easy to administer. The search technology differences between them and Yahoo is negligible. The main difference is the success of Google’s distributed advertising such that every site on the web (including this one) has ads which point back to Google, which increase its page views and advertising revenues.
Frankly I find Google to be one big ego-glorification machine, but one which is not going away anytime soon.
google is maybe an angel now, but they have a strong possibility of becoming a devil.
http://www.ryanbyrd.net/rambleon/?p=466