Is Google Going Better Than Free On Navigation? Will That Set Off Antitrust Alarms?

from the should-it? dept

A few friends have passed along Bill Gurley's excellent (as usual) analysis of how Google is disrupting the navigation market by ditching the two big players in the space (Tele Atlas and Navteq), going it alone and also (the big news) offering its navigation info for free. Gurley points out that the truly disruptive part is that Google is actually offering mobile operators a deal that is better than free, in that they get to share in some of the ad revenue associated with anyone using the services. The point is pretty clear: those who are relying on the old business model of getting paid for navigation info are likely in serious trouble.

Of course, there are some perception issues. Plenty of companies who have tried a "we'll pay you" approach to marketing often find that it actually breeds some level of mistrust, as partners/users start wondering why, and if there's some sort of nasty catch. Google, of course, has a pretty good reputation, and ought to be able to overcome that issue. However, it does make me wonder if this will set off the Justice Department (and Google's enemies) on some silly witchhunt, claiming that this is somehow "predatory pricing." That, of course, is ridiculous if you actually think it through. The only real problem with predatory pricing is if it's used purposely to drive others out of business to then jack up prices. But Google's idea is to just give it more opportunity to make ad revenue. It's not predatory, it's just smart from a business sense. However, with so much scrutiny on Google these days, you could certainly see this backfiring.

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Why Do Some Politicians Want To Ban You From Putting New Software On A Prepaid Mobile Phone?

from the protecting-business-models? dept

The EFF points out that some prepaid mobile providers have apparently convinced some politicians to introduce a bill, The Wireless Prepaid Access Device Enforcement Act of 2009, that would ban buyers of prepaid mobile phones from installing their own software for the purpose of working on another network. Basically, this is a bill specifically to protect the business model of Tracfone, which sells subsidized phones assuming that the buyers will keep buying prepaid minutes from them. The problem is that this might just be a bad business model -- and once someone has bought a device, it should be theirs, and they should be free to do with it what they want. Congress shouldn't be protecting anyone's business model.

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Steve Ballmer Declares 'Free Is Not A Business Model' -- Apparently Unfamiliar With Microsoft's Free Products

from the check-'em-out,-steve dept

Josh W points us to an article about Microsoft new mobile phone software that contains an odd quote from Steve Ballmer, responding to a question concerning Microsoft's plans to compete with Google's free Android mobile operating system:

"Free is not a business model," he said. "We are a commercial company, we will look to gain revenue and profit from our activities. You'll have to ask our competitors if they'll make money on free things."

Internet explorer. Bing. Microsoft's new security software. All free. All offered by Microsoft. Is Steve Ballmer admitting that he doesn't know about any of these things... or is he just expecting that the reporter and the readers of the article are flat-out stupid? Clearly, Microsoft seems to recognize that free is a part of lots of smart business models, so why is its CEO apparently acting clueless on this front? As clearly anyone who thought this through knows, free by itself is not a business model, but free, in combination with a larger business model often makes a lot of sense. That's what Google is doing, and it's what Microsoft is doing as well. So why is Steve Ballmer pretending otherwise?

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Mobile TV Backers Figuring Out That People Don't Want To Pay For It

from the maybe-next-year dept

For several years, companies pushing mobile TV services have been saying an explosion in their popularity is just around the corner. But consumer uptake has been tepid, as their business model of charging a monthly fee for linear broadcast video that can't be time-shifted or recorded -- you know, the same kind of TV people are shifting away from in their living rooms -- hasn't struck a chord. Even in markets like Korea and Japan, often talked about as some of the most advanced mobile markets in the world, people have shied away from paid mobile TV services. So after a few years of not really going anywhere, mobile TV companies are starting to think that maybe they should start thinking about changing their business model (via Engadget) from a subscription-based service to an ad-supported one. Perhaps that's a start, but just as important as the charge to end users is the service offering: trying to force users back to a schedule-based broadcast system is always going to be an uphill battle in an on-demand world.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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A Tale Of Two iPhone Apps... And An Irrational Fear Of Piracy

from the compare-and-contrast dept

Reader Terry writes in to point out a rather amusing contrast between two separate stories on a site about iPhone apps. First, there's a story about the massive success of the iPhone game iShoot (which was just profiled in Wired as well). That game, which is basically a copy of the old Scorched Earth (a personal favorite), used a free "lite" version to convince people to buy a more complete $3 version to the tune of over $600,000 in a single month. It is an example of using "free" to sell something else.

But, as Terry points out, it's rather maddening that the very next post on that same site, repeats without any hint of skepticism, the complaint of another iPhone game developer that thousands of dollars were being lost to "piracy." Of course, the article seems to have no problem assuming every single unauthorized download is a lost sale, never once questioning whether those folks would have bought the game in the first place. It also fails to mention that the only way to get the unauthorized free version is to have a jailbroken iPhone -- which is a very small percentage of iPhones out there. More importantly, though, the first story makes it quite clear that if you build a good game, give people an easy way to try it out for free, they seem more than willing to pay for the app in large quantities. The problem (once again) is not the "piracy." It's not a "loss." The problem is simply the use of a bad business model by the second developer -- and, perhaps, making the game not worth purchasing.

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We're Still Debating Whether Or Not Free WiFi Is Good For Business?

from the wasn't-this-settled-already? dept

We thought that the whole debate over whether or not free WiFi helped businesses like restaurants had been settled years ago when restaurants like Panera shared some data on how much more business it drove. However, it seems some are still resisting this, so we get yet another series of articles asking whether or not free WiFi is good for business. There are definitely more businesses offering it these days, so that should be something of an answer itself. But it's surprising to see someone in the article include that old line about how restaurants are worried about people clogging up its tables. We've seen reports in the past showing that free WiFi actually tends to bring in people during off-peak times. As for the peak times? While there may be some freeloaders, it's not all that pleasant for them to hang out in a crowded restaurant or cafe either.

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Advertising Isn't A Mobile Strategy

from the content-comes-first dept

ReadWriteWeb has an article claiming that the way to beat Google is by having a better ad platform (via Matt Asay). It says that "the company that can corner the mobile web ad market is going to be able to go toe-to-toe with Google." This is getting things completely backwards. Google doesn't dominate the search engine market because it has the best advertising platform. It dominates the advertising market because it has the best search platform. Other companies, such as AOL, that have seen themselves as an advertising company first and a content/applications company second have gone nowhere. This is especially true because the best advertising platforms are tightly integrated with their associated applications. One of the reasons Google's search advertising is so lucrative is that Google figured out how to make its ads highly relevant to users' search terms. This had two benefits. It increased click-through rates, obviously, but more importantly, it made the ads more useful -- and therefore less annoying -- to users. The same principle applies to the mobile space. Mobile advertising will only work if companies figure out how to make the overall user experience positive so that the ads don't scare users away. The way to do that is not to focus on building the best possible mobile ad platform, but rather to build the best possible mobile services, and worry about monetizing them after they've built up a significant user base.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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