Whenever I read a story about Google losing it's competitive edge or spreading itself too thin I think that they author just does not get the network effects baked into web distribution when a company is the leader in search and advertising, and how solidly Google competes where it allegedly failed.
Sideline projects, like their book scanning project, turn into a treasure for librarians and researchers who guide others to trust Google. Syndicated products and services like their book API nearly create themselves as an off-shoot of creating indexable searchable content.
They monetize search much more efficiently than the competition. And that is only going to increase as time passes, especially since their leading competitor would rather outsource to Google than fix their monetization problems. Google can take any related market it touches and buy marketshare or introduce a new product to push free and openness. Everything should be open, except Google itself.
To sum up Google's lasting competitive advantage (including brand, marketshare, price control, distribution, undermining copyright, strategic partnerships, etc.) I turn to telecom lobbyist Scott Cleland's Googleopoly:
Google arguably enjoys more multi-dimensional dominating efficiencies and network effects of network effects of any company ever - obviously greater than Standard Oil, IBM, AT&T, or Microsoft ever were ever able to achieve in their day.
The five main anti-competitive strategies in Google's predatory playbook to foreclose competition are
- Cartelize most search competitors into financially-dependent 'partnerships;'
- Pay website traffic leaders predatory supra competitive fees to lock up traffic share;
- Buy/co-opt any potential first-mover product/service that could obsolete category's boundaries;
- Commoditize search complements to neutralize potential competiton; and
- Leverage information asymmetry to create entry barriers for competitive platforms.
If you have a spare hour to read, you may want to check out Mr. Cleland's Googleopoly 2 [PDF]. I don't agree with everything in it, but it sums up Google's competitive advantages and business strategies nicely. Anyone can learn a lot about marketing just by watching and analyzing what Google does.
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