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Is There Any Industry That Doesn't Fear Google?
from the killing-inefficiency-everywhere dept
For a company that "does no evil," there sure are an awful lot of companies that seem pretty scared about what Google might do next. There are the obvious ones, of course, such as ad network firms and software companies (especially web-based ones). Telecoms keep looking over their shoulder on rumors of Google's impending efforts to offer wireless networks. Newspaper firms are still a little questionable on the concept of Google News. Then there's a company like Wal-Mart. Apparently Wal-Mart is scared that Google will help shops discover that someone else has a lower price today than Wal-Mart's everyday low price. Basically, the way to summarize this article is that Google is all about making things a lot more efficient -- and there are plenty of industries that have thrived for years on their ability to exploit information inefficiencies. Google's ability to wipe out information inefficiency can basically kill a lot of business models. Welcome to the age of information.
Reader Comments
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Excite@Home Part 2
I seem to recall a company that tried to be everything at once, and they didn't do so well. Their blue glass buildings are still standing empty in Redwood City, last I heard.
I can see the Google PhD's getting drunk on their own success and praise -- sounds like that company is rather lacking in the more practical down-to-earth, community college types.
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Re: Excite@Home Part 2
Google is not trying to be everything at once. Everything that Google is doing is tied to one primary commercial concern: selling ads. They are not becoming a wireless ISP just to be a wireless ISP. They are becoming a wireless ISP because they view it as an additional audience to view and click on their ads. Google is cataloging information not to provide global access to the information (though that is a side benefit), but deliver targeted ads based on search terms. It all comes done to the ads.
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Re: Excite@Home Part 2
I must be behind the curve on this one. Who are you talking about w/ their Redwood city glass building?
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Re: Excite@Home Part 2
Excite@Home
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Summary
Google's business model is information Arbitrage, indirectly funded by advertising. This is a clear danger to business models based on charging for "expert knowledge".
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Re: economics
I was a math major - not an econ major - but I did take a couple of classes. If I remember correctly, one of the assumptions for the whole supply and demand curve derivation (that doesn't hold in the real world) is perfect information.
Being a fairly hard-core capitalist, I think that the advent of more equitably accessible information for all can only be a good thing.
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Re: economics
Information has always be the key in supply and demand. Some companies view an educated customer as their worst nightmare and that explains why some companies go to great lengths to provide as little information as possible to customers. Most, if not all, consumer lawsuits that are settled out-of-court contain a non-disclosure clause. Wal-mart want's everyone to believe that they have the "lowest prices, always", but the truth is that the majority of prices at Wal-mart are no different from it's competitors. Information is the key.
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underwhelmed
with each successive "product" launch, google's offerings are further diluted, their mix more unimpressive. and their company policies are among the most restrictive and secretive in the industrive, making apple and microsoft look like bastions of free speech.
it's all about the hype. and you believe it.
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Actually Freakonomics...
If you take a look at the book Freakonomics the authors actually point out how the efficiency of retrieving/comparing information has caused a decrease in margins for certain markets.
Take insurance for instance, it used to be a lot more difficult to compare and contrast various plans between companies (and it still is difficult) but with companies like Progressive and Geico who pride themselves on being able to show you the price difference given the same amount of insurance factors (deductibles, limits of coverage, etc.).
Another example is the field of real estate, information on the web allows a potential buyer (or seller) collect information and facilitate a buy (or sell) of a house/duplex/apartment without the need of an agent (of course, there are inherent problems with this plan). Thus margins for real estate have gone down as well. However, agents still do much better than average Joe, but that gap is becoming smaller.
Just my two cents.
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