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Google's revenue is very closely tied to the amount that people use the web in general. So much so, that they will make more money simply by encouraging people
by chaz 14y ago
Google's revenue is very closely tied to the amount that people use the web in general. So much so, that they will make more money simply by encouraging people to use the web more. As a result, their strategy is largely to reduce the barriers to the next click and the next session, and thereby moving closer to the next Google search. Faster connections, faster browsers, cheaper devices, more ubiquitous access, etc.
It's almost like oil companies subsidizing the cost of cars to make more money. Reminds me of the start of the Michelin guide book, which was created to encourage people to drive to interesting places in France.
- redthrowaway 14y agoThe same can be said of Amazon and their willingness to take losses on hardware just for the chance to get people into their content ecosystem. I've certainly found that, since getting my Kindle, I purchase all of my eBooks (used to pirate), and also use the Amazon store for goods quite frequently, whereas I previously had never used it.
- kwekly 14y agoAnd at this risk of stating the obvious: the Michelin guide then went on to evolve a culture and impact well beyond it's intended use...
- justincormack 14y agoI don't think it ended up selling that many tyres but a cost benefit analysis would be interesting. It was a good branding exercise.
- snogglethorpe 14y ago... and this means Google has a strong incentive to prevent the public from getting trapped in walled gardens (facebook, iOS, etc). This a good thing, as it means they're powerful advocates for a more open internet.
- catwrangler 14y agoNot necessarily, since it seems Google's new strategy is to create its own walled garden and keep you inside of it as much as possible.
- pyoung 14y agoI would say they are more like a funnel. And they are trying to make their funnel even bigger. They make their money by sending you to other websites and services, which is why most people don't consider them a walled garden.
- bzbarsky 14y agoTheir search engine makes money that way. Their mail and calendaring apps sure don't, for example. At this point Google is big enough that generalizing about how they make money is a bit pointless, because they have a bunch of different revenue streams. The only commonality is advertising.
- nmridul 14y agoThey have the open data policy allowing you to take your data with you. And this is what makes people less suspicious of them.
- bzbarsky 14y agoSure. They're way better than many about vendor lock-in, because they do realize that it's somewhat evil. Not to mention often counterproductive. But that's not stopping them from signing deals to get Chrome drive-by installed on users' computers, say. Again, it's a big place. Some of it is still all about "do no evil", while other parts seem to be run by scumbags. Pretty good for a large corporation, all things considered, but not exactly all wonderful.
- andybak 14y agoHow so? (genuine question - you don't make it clear what you're referring to)
- ekianjo 14y agoThis business model is not new at all. That's what video games console manufacturers (except Nintendo) have been doing for dozens of years. Selling the hardware very cheap, at no margin or even "dumping it", to make money on the software licenses. Really, Google has not invented anything.
- binxbolling 14y agoWho's claiming it's new?
- Evbn 14y agoWhat do you mean "except Nintendo"? They nearly invented the practice.
- rdl 14y agoAll consoles use the "cheaper razors, more expensive blades" model, but there is a big difference in exactly how. Nintendo actually prices their gaming consoles above production cost (and probably above all-in cost) AND charges huge license fees to developers (and also has a huge first party developer userbase, unlike the other companies). Nintendo is the company who maximizes profits, Sony and Microsoft at best maximized top-line and in reality just tried to maximize market share.