Tuesday, November 27, 2007

What is Google's core business?

Over the last few months, I've found myself in repeated conversations about Google (I guess living a few miles from their headquarters effects the gravitational pull) and they usually boil down to one core question: What is Google's core business?

"Search!" is the answer commonly spit out, it's the obvious one and the one that the standard narrative wants you to believe: Google is the leader in internet search, so that's gotta be it, right? But that's not it, hence the second question that comes up in conversation: How does Google make money?

The answer to that one is the answer to the first one as well: Google is an advertising company. Yes, it started in search, but search, maps, blogs, and everything else it does (and it does a lot) is secondary to ads, which bring in over $10 billion a year. For most of the Internet, Google is advertising.

So then comes the third question: Then why do they do so many other things? Rough Type's Nicholas Carr posits a very good answer:
Google’s protean appearance is not a reflection of its core business. Rather, it stems from the vast number of complements to its core business. Complements are, to put it simply, any products or services that tend be consumed together. Think hot dogs and mustard, or houses and mortgages. For Google, literally everything that happens on the Internet is a complement to its main business. The more things that people and companies do online, the more ads they see and the more money Google makes.

3 comments:

Steve Ballmer said...

I was just in Tokyo to launch the new Windows Live services, when this coke-bottle-glasses reporter for the Tokyo Kamikazi Daily interrupted my usual world changing musings,
"rista Ballma-san, rista Ballma-san!"
I was a little annoyed that he interupted, but I decided to be respectful and bowed to him, "yes-san, do you have a question for me?"
He said, "rista Ballma-san, rut do you think of Rhuggle's expanding leed over Rikrosoft on the Rinternet?"
I said nothing at first, I motioned for one of my Blackwater people, he came running over. I whispered to him, "Get rid of this guy!" But he said, "sorry sir, MS international protocol MSJp44 dictates that once you have acknowledged him you must answer the question sir, roughing him up now would be considered 'impolite'."
I sighed, turned, bowed again:

"Rhuggle is a non-factor for us, they are at best an annoyance, a rash in an inconvenient place!"

They all looked at me with that fake confused look, so I went on to explain:

"Google is not ahead of us, In the area of search specifically, Google would lead."

At that point, a dozen hands went up, "rista Ballma-san, rista Ballma-san! rista Ballma-san, rista Ballma-san!"
I ignored them all!
I wasn't going to fall for that MSJp44 acknowledgement thing again, so I decided to have a little fun with them:

"Rhuggle is a bunch of boy scouts with no den-master! They are just a bunch of spoiled rich kids on a perpetual holiday, no order or discipline. They only exist in that I allow it, I find them amusing, it's like watching a house on fire or some other tragedy, you know it's repulsive but you just can't look away!"

The reporters were taking in my words like Saki, they just couldn't get enough! So I decided to throw them one more bone!

"I have to go now, but since I'm on Rhuggle, let me say this about this 'Android" thing they announced: It is just like the rest of Google ..ahem, I mean Rhuggle, IT ONLY EXIST ON PAPER! Don't fall for this vaporware, rumors, fake-half-baked hype that they peddle!"

Kira said...

I'm sure you've heard about this, no?

http://www.google.com/intl/en/press/pressrel/20071127_green.html

Google apparently is now a renewable energy research company?

Sinker said...

Actually, Kira, that makes a certain amount of sense. Google's looking to build (and is already building) MASSIVE server farms all around the globe. Those things will suck up a lot of energy (think of how hot your office can get with your computer running all day, then multiply it by thousands), so I can see how, if you essentially have an endless supply of money, you might throw some of it at solving a problem of how to not burn up so much energy keeping the damn things cool. I mean, Microsoft is actually building in Sibera in search of the same thing!