It is what it is....

Wednesday, July 08, 2009

Web 3.0 Just Kicked Through the Door

In the playbook for Google's world dominance there is one play still in the developmental stage:

GoogleNet - the one missing link. No pun intended with the missing link part. get it?

The posting below is a repost from February of 2007. I'm reposting because I think it is just as applicable today as it was then.

Couple quick thoughts before my paste:

- the amount of data on every persons habits that google will be able to manipulate and exploit is scary. the Chrome OS and Android just gave google 5 times the access they had to me before. Why? Android was built to run on devices and I can't stand windows crashing every hour so i'll gladly switch to a more stable android. not to mention its free. Android will be the OS for my mobile phones, set top boxes, home entertainment systems, appliances (refrigerators, ovens, vehicle management and entertainment systems, home automation devices (remember google's forays into the home automation and electrical smart meter markets?) and probably, in the not too distant future, they'll manage our terlits too. Thats a shit load of visibility they'll have in to the patterns and habits of connected people. Again, no pun intended :)

- will the Feds just sit back and watch as Google take it deeper than Ma Bell ever dreamed possible?

They are giving away everything else, why not connectivity too? Its all about efficiency right? Operational efficiency, risk mitigation efficiency and customer efficiency. Efficiency is the driving force behind Googlenet(gnet). What is GNet? Google's foray into the ISP business. This 'business' for Google is the means to an end. At the end of the day Google sells advertising and they'll use whatever means necessary to do that, be it building an OS and giving it away for free or by providing free connectivity so that free OS stays online 24x7. The more interaction we have with devices the more impressions google has to sell to advertisers.

The gnet hypothesis: Bandwidth costs have fallen to a level that the advertising revenue more than subsidizes the cost of the network. We are in the very early stages of a true 'gloabl village' as Marshall McCluhan called it. The cost structure for a traditional ISP like PacBell DSL..errr AT&T, comcast, etc to supply services to the residence is around $40 per month and trends down as they grow because they get cost scale.... in the network world, the more you buy the less it costs.

goog will be placing a bet, and a very calculated one, that advertising $$ will not only subsidize operational costs of providing free services(isp, voip, office, etc), but will exceed them.

Owning the customer's network routes from end to end(being the ISP) provides Google with private infrastructure platform for delivering customized content and adverting to each and every one of the people using their service. this delivery platform is always on and knows where you go, what you type, where you live, who your friends are, what files you have downloaded, what you look like, and whatever else they add on to their services. So when Johnson & Johnson or GE or Proctor & Gamble or Coca Cola or Pepsi is planning their media buys for the next year do you think they'll purchase advertisements on radio, television, print or the 4th network(Google)? based on the ability to target a specific population that has certain attributes you desire, the choice is pick google. Why? because you know that your marketing msg is going to a qualified prospect as opposed to the traditional 'shotgun' approach. plus, you can get results in realtime and tweak your msg if its not working in real time. with the other three media you are somewhat ratholed into trusting some third party for ratings that may or may not even reach the people that you want it to. by the time you figure this out a slew of things can happen...some good some bad but why chance it when you don't need to.

At the end of the day, Google is building a traditional media killer and the funny thing is..actually not really funny but kinda, that the writing is on the wall but nobody seems to believe it. I do. @Home Network had this vision but couldn't pull it off because the cable co's couldn't get their heads out of their rear to see the opportunity that was sitting right in front of them.

goog already has deals in place and likely in the works with the producers of original content which will allow their users access to that content. if i'm a content producer where would i want my content to be seen? ex. let's say you are the producer of The Office and goog offers you the ability to place your content on their network so that it can be viewed by anyone, anywhere, anytime and offers a revenue share or some other creative structure around it such that you know your worst case scenario beforehand. simple choice right? sure abc or cbs might offer an upfront fee in the form of $$ per show but the audience is limited, the timeslot is finite and in order for someone to view it, they have to purchase cable tv or satellite or whatever whereas on the google network you content would be globally accessible and the broadband access which replaces the cable or satellite tv service, is free to the masses. additionally you can develop complimentary services that engauge your viewership such that you are able to really develop a community around you content as opposed to content around a community.

What does this have to do with being an ISP? Everything, why do you think there is such a brouhaha over net neutrality? Without connectivity none of this is possible and with the right connectivity, all of it is possible and defendable from the threat of new competition emerging to pose a challenge.

The internet hasn't changed anything when it comes to the bare bones media model. The driving force of media is and always will be advertising. Without it, there would be no televsion, radio, print or internet. It doesn't matter if its old world or new world, it's still dependent upon advertising and gnet is to google what airwaves were to ABC, NBC and CBS, something to exploit in order to sell advertising.

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