Nicholas Carr calls Google Pack “Google’s Trojan Horse.” I think he’s got it right:
There’s nothing particularly interesting or surprising about what’s in the Pack - it’s something of a dog’s breakfast, actually - but that, I’m pretty sure, is by design. Google wants the initial version of the Pack to be inoffensive because the overriding goal is to get as many Windows users as possible to download it. (If Google stuck Open Office in it, for instance, a lot of users would be nervous, both about the size of the download and about the possibility of screwing up their existing applications.) The Pack is a preemptive strike against Microsoft, which Google knows will use its upcoming updates to Windows, Internet Explorer, and Office to lead users as far away from Google as possible. The Pack will enable Google to get its two desktop search tools - Google Desktop and Google Toolbar - onto more PCs and, in the process, to install a little trojan horse named Google Updater. Updater, Google says, “helps you discover new programs and keep your current software up to date.” In other words, it gives the Googleplex a direct channel into your PC, bypassing Microsoft’s operating system and updater.
Why’s that important? Because, among other things, Google desperately wants to avoid ceding to Microsoft control over a PC’s default software settings, particularly those controlling the desktop-search and web-browser applications (Pack also includes the Firefox browser, with embedded Google search). It’s worth remembering that one of Google’s top advisers is Hal Varian, the Berkeley economist, who has studied what he calls “the power of the default”: the tendency of ordinary people to stick with what they’re given, rather than spend time actively seeking alternatives. Defaults have a big influence over how people operate their computers and thus over which browser and search engine they use - and defaults are often set when you install or update a program.
John Battelle’s conversation with Google’s Marissa Mayer is consistent with Nick’s perspective, suggesting Open Office will be added at some future date, perhaps when the Trojan Horse has penetrated more deeply into the universe of PCs and the “default” comfort zones of their users.
I noticed no version of Open Office in the Pack, and [Marissa] reminded me this is just the first version of the Pack, and since it updates itself automatically, why, there might be Open Office in an update shortly. They are in active discussions, I was told.Posted by Mitch Shapiro at 3:16 PM | Print | Comments (0)
In her latest post, Cynthia cites the following from a John Markoff NYT piece:
Microsoft executives defend the way in which the telephone companies are deploying the company’s IPTV technology, saying that if consumers are exposed to the chaos and uneven quality of the open Internet, it is likely to undermine the development of the new services.
Reading this reminded me of something posted yesterday by John Battelle, describing his recent conversation with Jennifer Feiken, who runs Google Video:
Another very important part of this announcement is ranking and relevance. I asked Feiken how Google plans to rank Google Video searches - clearly this ain’t no simple PageRank play. Will they rank by popularity? Profitability? Metadata? “We realize this is a difficult problem to solve and we are definitely innovating in this area,” Feiken told me.
This speaks to Cynthia’s point that we’ve begun a transition that will take some time to evolve. It also underscores another point—that “video search” remains a relatively undeveloped and strategically important piece of “infrastucture” in the new world of Internet TV.
Another aspect of the change relates to revenue sharing. The reporting I’ve seen suggests Google will get 30% of revenue from video sales. That is significant in several respects. One is that it represents a diversification of Google’s advertising-dependent revenue stream. Another is that this 30/70 revenue split establishes a new reference point in terms of video distribution deals. My understanding is that cable’s gross margins tend to be highest on basic programming, but that even its gross margins for distributing movies via premium channels, pay-per-view and video-on-demand are significantly higher than the 30% share Google is expected to receive.
Then there’s the advertising component of Internet-delivered video. Already the cable industry is working on targeted advertising strategies with companies like Rentrak, which compiles voluminous VOD-usage data, and Visible World, which has developed systems for developing and inserting targeted video ads. But, while the top cable operators (and presumably Verizon and AT&T/SBC) are pretty excited about its potential, highly targeted cable advertising remains a nascent phenomenon.
Now we’ve got the dominant force in search and advertising algorithms entering the fray. And, according to Robert X. Cringely, Google has a “Grand Plan to Take Over TV Advertising.”
How often do you see an ad on TV for something you’re currently in the market for? I’m guessing almost never. But imagine if everyone watching “American Idol” only saw ads for things they might really buy? Or, better yet, only saw ads for things they had already expressed an interest in? The value of those same 30-second commercial slots would increase by orders of magnitude.
Google imagines a world where only single people see match.com ads, and people who can’t drive see ads from taxi companies where others see Toyota campaigns. Where fraternities see ads for strip clubs, beer, Cancun weekends and LSAT prep courses, and only seniors (and their adult children) see ads for Alzheimer’s drugs. What would be the value of that increased efficiency, capitalized into present dollars? Ten billion? Fifty billion? I say the value is $100 billion — 25 percent of the total U.S. advertising market and 15 times Google’s current size.
Google is going to let the telco and cable companies burn their capital building out IP-TV, knowing that Google will still be the only game in town for the crux of the whole thing: the ability to show every viewer the specific ads that companies will pay the most to show him at that specific moment. What Google wants to do with these trailers is SERVE EVERY TV COMMERCIAL ON THE PLANET because only they will be able to do it efficiently. Only they will have the database that converts those IP addresses into sales leads, only they will have the servers and disk space close enough to the viewers to feed the ads. Only Google will have the chops to run a constant, real-time auction for the next ad every consumer is about to see, and then serve that ad at the moment the program goes to commercial.
But Google can’t insert ads into an “American Idol” stream. Fox would just sue, right? No, Google will cut a deal with every network to customize their ad spots for every viewer. For a small cut of their ad revenues, Google will handle all customization costs, hardware and software. The networks will all go along because the customized ads will be so much more profitable that it would make no sense for any network to refuse.Posted by Mitch Shapiro at 2:42 PM | Print | Comments (0)
John Markoff has an overview piece in the New York Times today that synthesizes the crush of video-over-the-Internet developments he saw at CES this year. And his conclusion, even if not exactly stated this way, is that sooner or later, the traditional TV distributors will likely get gored by the rapid onset of Internet-based video.
The rapid emergence of the consumer electronics and computer companies as Internet video providers is certain to challenge the control of the cable, telephone and satellite companies, which seek to dominate the distribution of digital content to the home. Competition has intensified as more consumers have upgraded to digital televisions. Indeed, the easy availability of on-demand content over the Internet is certain to accelerate consumer expectations that they will have more control over digital video content, both to watch programs when they want as well as to move video programs to different types of displays in different rooms of the home.
From Google to Yahoo to Intel’s mysterious Viiv technology, this year’s CES marks the official beginning of the end of the traditional one-way, one-to-many modes of distributing video news, entertainment and sports. For sure this tectonic shift in television has been coming for a long time — at least six years — and will still take a long time to solidify.
Meanwhile, try as they might, cable operators, and now phone companies, can only mitigate, but not stop, this development with “two-tiered” Internet proposals. But maybe some kind of brake on this mind-boggling new world is needed. Markoff points that this technology shift changes television from a world of 50 or even 500 channels to a world of five million channels.
They are companies like Apple, Google, Intel, Microsoft, Yahoo, and others, with all of them beginning to make available an ever-widening array of video content that looks more like a world of five million channels rather than 50 or even 500.
That’s too radical a shift in too short a period of time for a robust marketplace to take hold. In short, that’s kind of crazy and nothing in the history of the communications businesses — not even the Internet itself — prepares us for this kind of rapid sea-change. Summing up the view of Microsoft’s TV division, Markoff writes
Microsoft executives defend the way in which the telephone companies are deploying the company’s IPTV technology, saying that if consumers are exposed to the chaos and uneven quality of the open Internet, it is likely to undermine the development of the new services.
Still, traditional television is on the way out and this new world of unlimited choice, and unlimited content creation, is at hand. Television is dead; long live television.
Posted by Cynthia Brumfield at 10:01 AM | Print | Comments (0)
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