Tag Archives: google

The train wreck that is Google Android

Google Android makes great inroads as the alternative smartphone OS next to IOS from Apple and Blackberry from RIM. Companies like Samsung and HTC are putting their weight behind Google’s mobile operating system.

Bill Gurley of Benchmark wrote an excellent analysis of Google’s strategy behind Android called “The Freight Train That Is Android
In short Google wants to direct customers as fast as possible to their web services platform and uses Android to build a huge bridgehead. They give it for free because the money for them is in selling advertising. And they make enough money that they can afford giving Android away for free. This is of course great for handheld makers since they do no longer have to invest in their own software development. His conclusion is that Android benefits the customer since they get great software for the cheapest price possible. And this is a sad conclusion.

The reason that I do not support his conclusion is that because of Android a lot of handheld manufacturers loose the capability to create operating systems on their own. It brings back the market of mobile operating systems down to 3 or 4 major players. With the success of Android you can bet on it that RIM will go under or reposition themselves with an Android offering themselves. The first signs are already there since their tablet is compatible with Android applications.

Google using their enormous weight behind putting Android on the map and this will eventually lead to loss of innovation in mobile operating systems. Handheld makers will loose their capability to create operating systems and are at the mercy of Google for innovating on the software platform. In the end consumers will loose because of this. Of course Android has made it possible to make a major leap in smartphone capabilities but this is one-time leap. In 4-5 years we are stuck with a very boring mobile phone market.

Moreover free does not exist. The development of Android has to be paid somehow. In Google’s case it means the advertisers are paying for it. In the end the consumer will be pay for that. The revenue model is just different. The only argument you could make is that Google is doing the development for multiple handheld manufacturers at the same time which lowers the cost. But this is the price of innovation. Innovation does not come cheap. It needs competition to thrive and competition costs money. What Google does is the leveling the competition for a short term gain. Status quo is often cheaper.

Android seems to be getting a lot of support from the business crowd here in the US. And to me this looks like the US is trying to create another Microsoft out of Google. A monopolist who tries to its best to vertically integrate the business while moving possible competitors to the side.

I think this is sad.

Internet wants to be free

StarBucks announced this week they will start offering free internet in their coffeeplaces later this year. McDonalds already offers free internet in their restaurants. Several hotel chains offer free in-room internet. Internet access is used as an incentive to bring in customers.

Internet access at home is very affordable nowadays. This is also part of the reason why those $10/hour WIFI networks simply do not work anymore. People are not prepared to pay for internet access. It is as cheap as electricity. Know a hotel where you have to pay for your electricity usage?

The major challenge is how the economics around internet access will work out. I see 3 relevant parties on the internet:

  1. content provider
  2. network provider
  3. site provider (physical location of internet access)

The telco’s should better be prepared to become the electricity companies of the 21st century. Their role will be relegated to building and maintaining the network. Content will move more and more outside the reach of the network providers. As long as net neutrality is kept intact there is nothing they can do about it.
The site provider owns the physical location of the internet access point. They pay for making the access point to the internet available.

Value is only created on either end of the internet connection — either by the content provider and the site provider. For most site providers the internet access is a service they provide to their customers. But like StarBucks there is much more opportunity to make money from internet access. StarBucks offers a physical location enabling to mix online and offline marketing. Via affiliate marketing StarBucks can get extra revenue from their internet access point.

Internet wants to be free. In the near future the internet will be available everywhere without or for very low costs. Google gladly wants to pay to get people on the internet. They have to because that is how they make their money. More people on the internet are more people which use their service and see the ads. Google is a content provider and they are not the only one. Amazon, Facebook and all the other major destinations are content providers too and without internet users they cannot make money

The next 5 years will be very interesting. Question is will it be a rocky road — like with the music / movie companies — or will the companies part of the internet ecosystem adapt?

Native applications are the new future?

Internet services are more and more complimenting their service with native applications. The rise of the Iphone — including derivatives like the Ipod Touch and Ipad — and Apple’s appstore have boosted the availability of internet connected native applications. Applications to read news stories on newyorktimes.com or Twitter clients to keep everyone updated on your life.

A bit of history
Computing more or less started with the mainframe era. Mainframes were the primary computing unit and users accessed the mainframe using dumb terminals.
In the 80s and rise of Microsoft Windows and personal computers the paradigm changed to standalone usage. Individual computers were islands only connected through floppy disks. Next came the rise of computer networks. Companies connected computers together. These computers used servers to store and retrieve information. The era of client – server computing was born.
When the internet gained popularity and became mainstream with the invention of the worldwide web another paradigm shift took place. Computing moved to the web and using sophisticated — but standard — web browser software personal computers could access information on the internet. The new trend was to move all applications to the web. The web would offer a standard and uniform way to interact with applications.

Ipod, Iphone, Kindle, Evernote
And then another thing happened. A myriad of special purpose devices were created. Devices like the Ipod to listen to music, smartphones to connect to both the online and offline world and ebook readers to read your books. And all of these devices have one thing in common. That is that they use the internet as part of their content delivery network. Ipod are loaded with music through iTunes and iTunes loads its music from the internet. Smartphones access emails and twitters from the internet and ebooks get their books using online bookstores.
But these devices also have in common that they do not use a web browser. Some, if not most, of them are capable of running it but they use native applications for their primary use cases.

During this time I also see this trend translate to internet services who use personal computers as their primary platform. Services like Evernote and Kindle offer native applications for the personal computer. These services think they can offer a better service to their users this way. The reasons vary from a more powerful user experience to offline usage of the service.

Google Gears and Adobe Air
Companies like Adobe and Google have recognized this need and developed their own solutions. Adobe developed Adobe Air. Software to develop and run flash applications as a standalone application on the desktop. And Google created Gears to use web applications without an internet connection. Gears has not been a great success. The adoption rate beyond a few Google applications is zero. The result off Adobe Air is still in the air so to speak. There are 900 applications available through Adobe Air’s website. The availability on Android will boost its adoption. But there are two reasons why I do not think it will happen. First is the user interface which looks alien on any platform and the second is that it is a standard controlled by a company. Eventually this always leads to failure.

Trend to offer a more powerful user experience using native applications
I see a definite trend to offer next to an internet service a native application experience on individual platforms including personal computers. Even HTML5 cannot change that. There are so many advantages for native applications in specific use cases and companies start to recognize that web is not the end of all others. The web is great for general purpose applications and will never go away. But for specific use cases native applications are back. And the internet plays the role of content store and content delivery network.

Power of the long tail in advertising

A perfect example of the power of the long tail is the change Google brought in advertising. Their AdWords system brings advertising power to everybody. Advertising was only reserved for big coorporations and huge ad budgets. Google’s system enables anybody to advertise and small coorporations or even individuals are able to advertise on big brand new media sites like Amazon or Google.com itself.

For this reason I created a shameless self promotion ad. Not because I want to advertise myself but just because I can. With a budget of only $5 / month I could advertise myself using my name as keywords. Of course the ad is not shown very often (who searches on Robert Schouwenburg at Google.com or Amazon.com?) but still it works brilliantly.

It feels like advertising on a major TV channel or major subscription magazine. I think it is a great example of the Long Tail. Internet enables niche advertising because you can target very precise target groups with tiny budget.