How Google Is Quietly Taking Over - Services Collecting Data on Almost Every Human Activity...
How Google Is Quietly Taking Over
TECH | 7/30/2013 @ 7:52AM
Earlier this month, Google announced disappointing
earnings, and its stock immediately dropped 5% (Disclosure: I own Google stock
through a fund). Most disturbingly, the
company’s core revenue driver, the revenue it gets for each click on an ad,
decreased 6% while traffic acquisition costs increased.
Ordinarily, rising costs amid lower revenues is no recipe
for success, but Google keeps plowing forward and last week launched
Chromecast, a $35 device that does essentially the same job as the $99 Apple TV
and allows you to control your TV screen from a smartphone or tablet (including
iPhones and iPads).
It sold out almost immediately.
The company also recently announced that it has activated
900 million Android devices and has 750 million users on its Chrome
browser. Taken altogether, the message
should be clear. While earnings might
zig and zag, Google is taking over the digital experience. Here’s a quick overview:
Mobile phones:
I’ve written before about how my iPhone is slowly becoming a Google
phone. While the hardware comes from
Cupertino, most of the core functionality comes from Mountain View.
I use Chrome rather than Safari, Google Maps rather than
Apple Maps, Google Now and voice search rather than Siri. If I watch a video, it’s most likely on
YouTube.
While others’ behavior may differ than my own, it’s clear
that Google owns at least some part of the experience of the vast majority of
smartphone users.
TV: Although
Google’s earlier efforts in TV weren’t particularly impressive, Chromecast
looks like a winner. For only $35 (and
with the promotional offer of 3 months of Netflix for free, the actual cost is
$11), I can make my TV do what I want it to, stream video from online services
made for the small screen and transfer it to a big screen.
Again, while my mobile devices are made by Apple and my
TV by Samsung, Google has somehow managed to insert itself and early reviews
are very positive. Forbes’ Jeff
Bercovici called it a Trojan horse for television.
Productivity:
Despite what critics say, Microsoft maintains its stranglehold on
productivity. For any business executive, Microsoft’s Office suite is a
must. Operating without PowerPoint and
Excel would be a serious professional liability.
However, I still find myself using Google Docs a lot and
my younger friends tell me they use Google for simple spreadsheets too. The reason:
Sometimes, portability and the ability to collaborate on the cloud
trumps functionality. Microsoft’s Office
365, despite improvements, still feels clunky.
Google X: Google’s
super secret innovation lab is helping the company insert itself even more
thoroughly into our lives. From
autonomous cars to Google Glasses to who knows what else they’re cooking up,
it’s getting hard to think of any facet of our lives which the guys at Mountain
View don’t plan to insert themselves in.
Put it all together and it becomes clear that there is
now a Google layer lying just beneath the Internet. But what’s most exciting (or creepy,
depending on your perspective), is what the company is using that layer to do.
A New Strategic Paradigm
The common explanation for the extraordinary breadth of
Google services is that it helps the company target ads and that’s certainly
part of the equation, advertising provides the revenue engine that drives the
business. However, even more important
are the thousands of experiments Google runs.
The massive breadth of Google services allows it to
collect information on just about every human activity you can think of, from
how we surf the Web to how we travel through a city and now, how we watch
TV. It can then use the data to build
simulations that help it determine how consumers are likely to act in the
future, which allows Google to create better and better products.
Google has shown that it is not afraid to fail. However, in the new world of big data,
failing fast and cheap is becoming too slow and expensive. Running thousands of simulations means that
it can fail in the virtual world before if fails in the real one. With no marketing, inventory, or retooling costs, bits are vastly cheaper than
atoms.
While Google is not the only one exploiting big data in
this way (Facebook and Amazon have impressive efforts as well), no one can
match its vast reach into our digital lives and that’s gives them a serious
advantage. Chances are, next time you go
online, you’ll be helping to test Google’s next breakthrough product without
even knowing it.
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