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The "Worm Turning" Moment
In this post John Battelle, one of the most astute Google watchers, talks with his friend John Heilemann (who has also written about Google recently) about Google and whether they are facing a moment, much like Microsoft faced in the early 90s, when the world turned against them.
I have been wondering this out loud for a while, starting with my "Starbucks of the Internet" post and continuing to this day. I've even called Google lame which I think they have been in their implementation of many of their new services.
It's a natural reaction for a VC, who funds early stage companies that find themselves facing down Google, to both worry about and think hard about Google. And I don't like what I see all that much.
John says the "worm turning" moment is "when the world realizes that the company is *too powerful* and its ambitions are *too great.*"
If that is the definition, then we've clearly reached that moment, maybe as long ago as last year.
Mark Pincus says it best in his post about Google Base:
my take is google has chosen between two paths. one which i thought they were on was to be a platform to enable great things on the web. google could have powered everything with its search engine, ad infrastructure, massive crawling and computing power. it could have been a democratizing force, enabling small services to flourish in being found and in serving them a platform on which to innovate.
instead google has chosen to be merely another big corporate titan. like microsoft, it's choosing to go for the gold, enriching their shareholders rather than enabling industries. msft started with the promise of an open platform that would unite and enable an industry. small companies could just build software and stop worrying about platforms. this platform turned out to be a trojan horse as msft usurped its power. initially the company enjoyed great profit growth just selling the platform but soon had to look at the apps on top to keep growing and then further to the utilities around it and any other good idea it could eat up.
like msft, google is now going after every other oppty around it, taking advantage of its trojan horse position. suddenly every company is at risk. companies as far away as walmart have to have a 'google strategy'. today, vc's ask every new startup how they will compete with google. (at least we dont have to answer the msft question any more.)
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Posted November 30, 2005 in Venture Capital and TechnologyComments
We used Google Maps in GiftWorks (fundraising software for nonprofits) and were planning on launching a service around it. We wanted to do a press release with them, and they were happy to get back to us. Except it wasn't what we expected.
We missed the line about "no commercial purposes", so we were surprised when they asked us to stop using Maps. It took us 15 minutes to switch over to Microsoft Maps and push it out to our customers through our own platform.
MSFT Maps will ultimately come with some sort of ISV fee, but the point is that they get ISVs, they get that providing their platform for ISVs means more business for them. Google doesn't seem to want to share.
Lesson learned. When we roll our platform, I'm hoping we remember it.
Posted by: charlie crystle | Nov 30, 2005 12:34:12 PM
Interesting post,
I think google is sticking to their knitting of "owning the internet's rawest material" but they're applying what worked for Web1.0 to the read/write web, and if they do, they will become the tirants that Mark describes.
Google own Web1.0 because they own its rawest commodity, the URL. The URL, is the "crude oil" of Web1.0 and indexing it is the refinery process that provides the gas for our internet experience, namely search. Google has the biggest, most efficient URL refinery on earth, so they take home the spoils (of web 1).
The raw material of Web2.0 is you and me, the user. Web 2's commodity is our time, expertise, attention, productivity, assets and our wallets. I'm increasingly feeling that Google wants to "own" me, and that's partly what I take from your Google posts, Fred. Problem is, this strategy of owning the web's raw material isn't going to work when applied to humans ... we aren't URL's and we wont stand for it :-)
I think Google's going this route because;
a) They realize that the URL refinery will loose internet market share and,
b) They think they can use URL ownership to lock in "people ownership" ... hence the google box and the "cube" (frightening) ...
c) ... but they're also in a corner over the fact that the new internet could increasingly choose to workaround the URL ... thanks to increasingly intelligent clients (VoIP etc.) and increasingly "dumb" central servers.
I'm personally torn over google; gmail rocks but they are lame in that they so poorly support Mac users and revenue model's a bit of a on-trick pony. When the whole world is your client, how do you dominat a new market without competing with them?
Posted by: David Gibbons | Nov 30, 2005 1:35:26 PM
"when the world realizes that the company is *too powerful* and its ambitions are *too great.*"
That's how the Senate felt about Caesar.
This could get interesting.....
Posted by: jackson | Nov 30, 2005 2:44:23 PM
Further evidence of Google's apparent corporate attitude can be found in the new terms of service currently circulating to use the Google AdWords API. Instead of an open "Google Economy" where a thousand flowers bloom, the API EXPRESSLY PROHIBITS API users from using 3rd party apps.
Apparently, there is a "commercial users" API that is destined for release early next year for those purposes, and presumably this API will come at a price.
Makes you wonder why Google wouldn't freely distribute any API that would presumably result in increased use of AdWords, the cash cow of all cash cows.
Posted by: Joe Agliozzo | Nov 30, 2005 7:10:49 PM
From the vantage point of an entrepreneur running sites, the Big-G is really starting to dissapoint. Read all about it here:
http://smartstartup.typepad.com/my_weblog/2005/12/are_adwords_ads_1.html
Posted by: Peter | Dec 2, 2005 6:38:42 PM
Why does typepad chop the tail off URLs?
Oh well, go to my blog and read "Are Adwords and Adsense Dying?"
Posted by: Peter | Dec 2, 2005 6:41:05 PM
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