ìGoogleís not a real company. Itís a house of cards,î Microsoft CEO Steve Ballmer allegedly said recently. His jealous remark is at least half true. What is it about Google that so mystifies every group that tries to analyze it? The more I study them, the more convinced I am that Google has a truly revolutionary business model, and are the most visible pioneers of the emerging 21st century Gift Economy. Microsoft, and the irresponsible brokers who keep flogging overpriced stocks based on unsustainable growth promises, and everyone else who owes their living to the Ponzi scheme that is the modern growth/market economy, should be very afraid.
There is a giant gulf between Google and its investors. The investors, justifiably recognizing that Google is the most customer-obsessed (their #1 principle, even ahead of ‘doing no evil’) and innovative (a neat trick — the two rarely come together) company in the world, believe that that will necessarily translate into the greatest revenues and profits in the world. They’re mistaken.
Google, meanwhile, behaves as if it really doesn’t care much about revenues and profits. Until recently, its two principal sources of revenue were (and still are) marginal and fragile: Advertising online, Google’s #1 revenue source, is a virtual oxymoron. As the economy moves from a supplier-driven to a customer-driven one, a revolution Google is helping engineer, advertising as a whole will be history, and Google’s advertising is no exception, notwithstanding their attempt to ‘qualify’ ads as relevant to each viewer. Its #2 revenue source is selling search tools to corporate customers. But the type of search tool that is needed for an Intranet is very different from the ‘popularity-based’ Google search technology that works so well in the complex Internet world. You can get a sense of this from Google Desktop, whose refreshing speed and ease of use is just a delight to its users, but which often doesn’t locate the precise document you were looking for nearly as deftly as it finds the Internet page you were looking for in a vastly larger haystack.
But recently Google discovered there’s a third great source of revenue in today’s wildly inflated and delusional stock market: IPOs. I’m convinced that, more than anything else, Google went public because it gave them a ton of cash to do even more things for free for their customers — which is exactly what they’ve done since then, offering a never-ending stream of wonderful goodies. Far from a sellout to corporatist philosophy, with its IPO Google may have pulled off the biggest Robin Hood act in history.
There are some who believe Google will be successful, ultimately, by realizing the promise of Web 2.0 — moving the focus of the 21st century worker from the desktop (documents on the hard drive) to the network (where everything is kept online). Indeed, Google has been pivotal in the advance of AJAX, the fusion of technologies that allow users to assemble a page of information from multiple web-based applications, much as MS Office allowed users to assemble a page of information from multiple desktop-based applications. I have long espoused the development of two simple desktop meta-applications — a document annotator that would let you do, electronically and intuitively, everything your pencil can do with manual documents, and a workspace manipulator that would do, electronically and intuitively, everything your hand can do in a physical office, saving, storing, moving, aggregating, receiving and sending stuff (the illustration above shows how these applications drive all our essential information processing processes). If there is any hope of getting the 80% of the population that are not power users of computer and Internet technology on board, the use of these tools must be made this simple and intuitive, and I believe these two meta-applications are the best way to accomplish this.
But Google and Web 2.0 may offer another alternative — making the personal document, desktop and office disappear entirely. Instead of having a collection of documents on your desktop and in your ‘files’, Web 2.0 keeps all those documents out on the Web (subject to security and access permissioning rules that you set) as a designated, tagged subset of all the documents in the world on the Web. And instead of having an office that routes documents to files and mailboxes, you keep your ‘virtual’ office on Web 2.0, accessible anywhere anytime.
With Web 2.0 the two meta-applications are still the same (we all understand the functionality of the pencil and the hand) but they move from the hard drive to cyberspace. Or perhaps you have the choice of either or both — the applications work the same regardless of where you choose to keep your stuff. But strategically the development of these applications is different if the primary locus of data processing is physically local on a hard drive or virtual. Google may be waiting to see which primary locus emerges — which will depend on legal, cultural, security and technological advances and developments we cannot yet predict.
But Google surely understands that however this unfolds, Web 2.0 and future desktop applications are not going to be profit-making ventures. They will necessarily be Open Source. They will be gifts, from Google and others, to their beloved and grateful customers. Unfortunately, investors will eventually realize this, so it is unlikely that public offerings are going to provide Google with much more revenue. The money, as I’ve said before, is not in software and content, but in hardware and personalized applications (concerts and customizations).
So how will Google make money? It won’t. Perhaps it won’t have to. Perhaps in a Gift Economy customers will be so delighted by Google’s innovations that they will volunteer their time to identify and develop the next generation of applications. Open Source institutionalized.
Or perhaps we’ll find that, fundamentally, there are only so many applications for computer technology, and the Internet will become, like phone lines and pipelines, another utility, to be maintained more or less unchanged.
But back to the revolutionary Google business model. Traditionally customers have needs, wants, and nice-to-haves. Needs they will pay ‘market’ value for. Wants they will pay modestly for, especially if they’re bundled with needs. Nice-to-haves they will not pay for at all, but they’ll take them, and may make differential purchase decisions based on them (if the needs and wants of two vendors are indistinguishable). The market economy is focused on needs, since they are the corporation’s bread and butter, the only source of reliable revenue and growth, and hence profit.
Now enter Google. They fulfil needs, wants, and nice-to-haves, all free. So those of us on the leading side of the digital divide gratefully take all three, and we don’t even really differentiate between them (unless some of the nice-to-haves unduly complicate the application, in which case we don’t want them). Those on the other side of the digital divide get none of them, widening the divide to a chasm. The market understands none of this behaviour, since it doesn’t conform to any accepted business model. Google doesn’t really seem to care. They’re too busy doing what they do so well — delighting customers with valuable, intuitive, boldly innovative and expansive new products, on a scale that is the envy of every entrepreneur.
There is one last ‘search’ frontier that Google has not yet conquered, however, and it could be Google’s biggest hit yet, and possibly generate significant revenue as well. Google is well established as the company that best helps you find what. And recently with Google Maps/Earth they are becoming established as the company that best helps you find where. What if Google is now working on becoming the company that best helps you find who? The company that becomes the expertise finders, the shared-interest finders, the companion finders, the people who, at last, will help us find, effectively and intuitively, the people we’re looking for, not just their stuff. And not just find them, but make sure they’re available (and if applicable affordable) and seamlessly put us in touch with them.
If they could do that, even I might consider buying shares in the company.
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My Bio, Contact Info, Signature PostsAbout the Author (2016)
--- My Best 100 Posts --
Preparing for Civilization's End:
What Would Net-Zero Emissions Look Like?
Why Economic Collapse Will Precede Climate Collapse
Being Adaptable: A Reminder List
A Culture of Fear
What Will It Take?
A Future Without Us
Dean Walker Interview (video)
The Mushroom at the End of the World
What Would It Take To Live Sustainably?
The New Political Map (Poster)
Complexity and Collapse
Save the World Reading List
What a Desolated Earth Looks Like
Giving Up on Environmentalism
The Dark & Gathering Sameness of the World
The End of Philosophy
The Boiling Frog
What to Believe Now?
Conversation & Silence
The Language of Our Eyes
Cultural Acedia: When We Can No Longer Care
Several Short Sentences About Learning
Why I Don't Want to Hear Your Story
A Harvest of Myths
The Qualities of a Great Story
The Trouble With Stories
A Model of Identity & Community
Not Ready to Do What's Needed
A Culture of Dependence
So What's Next
Ten Things to Do When You're Feeling Hopeless
No Use to the World Broken
Living in Another World
Does Language Restrict What We Can Think?
The Value of Conversation Manifesto Nobody Knows Anything
If I Only Had 37 Days
The Only Life We Know
A Long Way Down
No Noble Savages
Figments of Reality
Too Far Ahead
The Rogue Animal
How the World Really Works:
If You Wanted to Sabotage the Elections
Collective Intelligence & Complexity
Ten Things I Wish I'd Learned Earlier
The Problem With Systems
Against Hope (Video)
The Admission of Necessary Ignorance
Several Short Sentences About Jellyfish
A Synopsis of 'Finding the Sweet Spot'
Learning from Indigenous Cultures
The Gift Economy
The Job of the Media
The Wal-Mart Dilemma
The Illusion of the Separate Self:
Did Early Humans Have Selves?
Nothing On Offer Here
Even Simpler and More Hopeless Than That
What Happens in Vagus
We Have No Choice
Never Comfortable in the Skin of Self
Letting Go of the Story of Me
All There Is, Is This
A Theory of No Mind
The Ever-Stranger (Poem)
The Fortune Teller (Short Story)
Non-Duality Dude (Play)
Your Self: An Owner's Manual (Satire)
All the Things I Thought I Knew (Short Story)
On the Shoulders of Giants (Short Story)
Calling the Cage Freedom (Short Story)
Only This (Poem)
The Other Extinction (Short Story)
Disruption (Short Story)
A Thought-Less Experiment (Poem)
Speaking Grosbeak (Short Story)
The Only Way There (Short Story)
The Wild Man (Short Story)
Flywheel (Short Story)
The Opposite of Presence (Satire)
How to Make Love Last (Poem)
The Horses' Bodies (Poem)
Distracted (Short Story)
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A Conversation (Short Story)
Farewell to Albion (Poem)
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