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One golden rule of business is to commoditize your complements, to kill off any competition they might pose. CPM display ads are complementary to search ads, he
by majani 14y ago
One golden rule of business is to commoditize your complements, to kill off any competition they might pose. CPM display ads are complementary to search ads, hence Google commoditized them by making AdSense primarily CPC.
It will be extremely hard to reverse the effects of this action.
- mistercow 14y agoThat's an interesting argument, but I don't think it quite adds up. Complements don't compete, they complement. The reason you commoditize them (like releasing them as an open source project) is not to kill them off as competition, but to let them thrive cheaply so that they build up the product you are selling. For example, Google's AdWord/AdSense product is complemented by monetized blogs, so Google commoditized monetized blogs with Blogger. Many other free Google services like Gmail can be seen in a similar light. In addition, CPM ads are a substitute for CPC ads, not a complement. So commoditizing CPM or CPC ads would be a very, very bad idea for Google. Furthermore I don't think that making AdSense CPC can be said to commoditize CPM ads. Nor did it really commoditize CPC ads; AdSense has been close to monopoly status for a very long time, whereas the goal of commoditizing is to increase competition with no regard for controlling the market.