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March 16, 2006
When Google Calls.....
A little late blogging, but today Google made some last minute calls and pulled together a group of reporters to meet with CEO Eric Schmidt. Not the kind of offer you turn down. So, I hustled down Broadway through Time Square to their offices. (They're inn the hip digs that were once occupied by About.com, which are complete with a balcony and an open air, three floor stairway.)
Turns out, Schmidt explained that the company wanted to do more of these kinds of meetings, saying it's probably better for Google to be more transparent. And after being knocked about by how it handled the announcement of its $90 million click fraud settlement and during the storm over censorship in China, you can see the logic.
A few things stuck out for me. First off, I thought that the rash of startups looking to get sold should be encouraged by the fact that Schmidt says Google buys 1 company every week.
Since I'm interested in the video market, I keyed into his comments on this subject. Schmidt talked about how, after advertising, selling content would be the next big biz opportunity for Google.
He wasn't sure when it came to video whether the ad or purchase model would be bigger over time. (Some people, including Fred Wilson, are in the camp of those who think the ad market will win out in the end.) And since he was in town to move $1 billion investment in AOL along, he talked about how getting access to the content that Time Warner was part of the logic behind their partnership.
He was careful to say that they didn't have a deal with Time Warner for content. But he said that he believed that simply being able to meet more of the Time Warner folks because of the AOL deal would help them get more access to content to sell or offer for free (with ads) on Google.
It said a lot to me about the stakes for online video, when just getting close to Time Warner is seen as a good thing.
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Tracked on March 17, 2006 04:52 AM
Interesting take on Google
Posted by: ARRIE at March 17, 2006 09:33 AM
Googles is responding with clear hints of insouciance to citations of going against traditional business practices. They clearly have that power to do so now as the world’s leading brand managing the world’s information bank. And so, they are saying, why the hell not … at least until we get some serious major competiton (Peter Sealy puts it nicely, equating Googles monopoly as a for-now scenario that will eventually be “neutralized” in the vein of “a Pepsi-Coke-market”-type scenario.)
Everyone knows going against the grain – strategically and with plotted concessions – is, (or more precisely could be) good for business. Goggles know this. It’s so obvious, I think, all the players on the field know this as well.
It’s to everybody advantage to ride it all out, especially since this subject is getting such shine. Looking at the click-fraud scam Goggles finds itself mired in, the $90 million they paid is insignificant, relative to their worth. FACT.
But more importantly the reality is that Googles is being more honest than most – however indirectly: Here’s what they are telling everybody, regarding click fraud: the money lost through all this is insignificant compared to what is being made and the much more to be made once this experimental phase is complete. And if we are taking a loss now, believe, that will more than be made up for later on. To investors: Just shut up and get/stay on board; we made a lot of you rich or richer, bail now or play conservatively and lose out on financial gains greater than any you’ve ever experienced … All this even with the very real possibility of some real competition from a single competing brand (again, reference Peter Sealy’s “Pepsi-Coke-market scenario).
Googles knows exactly what they are doing. And so do other players in all this.
Posted by: Donny H at March 17, 2006 12:29 PM