Google: The Whining Bully
I don’t remember the days before Google. Actually, I do. I remember Ask Jeeves (marketing used to the max), Dogpile, Yahoo (do people still use Yahoo?), AOL keywords, and so many other search engines and tools to navigate through the seemingly endless supply of websites online.
My children, though, will never know the days without Google.
We can argue left or right all day long about whether or not Google’s impact on society has been positive or negative, but we will all agree that Google is present, in a big way, in all of our lives. We might even say that without Google in our lives, our existences would become a little more inconvenient. Things that we take for granted now would be gone.
We all know this. Perhaps more importantly, Google knows this. And for the better half of the last ten years, Google has been used to getting their way. They’ve made it their goal to document all of the ongoings of every part of the world, and have been (since day one) relatively unapologetic about their approaches.
Perhaps the best part of Google’s plan? Everything is free. Everything Google offers (or seemingly everything) is free of charge to the end user. So with an almost endless supply of funding, a seemingly completely free product(s), and some of the smartest brains in the world on staff, Google has risen to the commercial power that they are today. Because Google sells ads on everything they produce, they make more and more money. Because they offer it for free, they gain more and more users. The only thing it costs the user: their information and privacy. Great deal, huh?
Whatever you think, their business model is very different than the ones of other companies.
A few months after the original iPhone released, Google made some of the work they had been doing on mobile devices known to the public. They had purchased a company writing mobile operating system software (Android Inc.) and decided (with a small alliance) to begin a movement toward popularizing open source software on mobile phones. Mobile phones had been plagued for years by the software that sat on them because the carriers locked down features, removed featured and mostly, crippled the phones. When Apple approached the first iPhone, they swore to take the control of the software themselves. When Android was announced, the pitch made was that NO ONE would have control over the device. It wouldn’t cost to develop for it, it wouldn’t cost to sell your app, it wouldn’t cost to put the operating system on a device, and ANYONE could change whatever they wanted. Google wasn’t releasing a phone, they were releasing an open source operating system.
Because for it to make any sense in Google’s portfolio, it had to be completely free.
I’ll, at this time, forego the argument that by giving up control over the operating system, Google gave control back to the cash-hungry-rotten-steal-all-your-money carriers.
Besides a few hurt feelings and harsh words between the two upcoming industry leaders, life went on as normal. The market, because it was free to put on any device, was flooded with Android handsets and devices and as time went on and the operating system became a little more refined, Google’s Android became the number one used mobile operating system on a smart phone.
And sales at Apple remained positive. And companies like HTC and Samsung were able to make a significant mark in sales, when their numbers had previously paled in comparison to RIM’s BlackBerry sales. And while it remained competitive, things were going along fine. More people were buying smart phones. A previously untapped market was beginning to be tapped.
Then crap went down.
A series of patents came up for sale from tech giant Nortel. Among the bidders for these patents: Apple, RIM, Google, and Microsoft. Google reportedly bid 3.14159 billion US dollars for these series of patents, while Microsoft and Apple (and others) bid together 4.5 billion US dollars for these patents. The highest bidder wins. And they did.
And that’s all great. But Google wasn’t happy.
Mostly because if these patents belong to Android’s competitors, it will cost royalty money to put Android on a device. Google says somewhere in the range of $15 per unit.
The bottom line: putting Android on a device will no longer be free.
David Drummond (SVP and CLO for Google) posted a blog post called “When Patents Attack” claiming that these companies were ganging up against Google in an effort to stop Android and oppress them. Some highlights:
Microsoft and Apple have always been at each other’s throats, so when they get into bed together you have to start wondering what’s going on.
But Android’s success has yielded something else: a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents.
A smartphone might involve as many as 250,000 (largely questionable) patent claims, and our competitors want to impose a “tax” for these dubious patents that makes Android devices more expensive for consumers. They want to make it harder for manufacturers to sell Android devices. Instead of competing by building new features or devices, they are fighting through litigation.
Patents were meant to encourage innovation, but lately they are being used as a weapon to stop it.
I might actually argue that patents were not intended to encourage innovation, as much as to protect innovation. Sure, knowing your innovations are protected is encouragement, but that was not the point of them.
Google is claiming that this group of companies is fighting against them through litigation. But Google forgets to mention that they ran into the other people’s business with a free product, determined to overrun the market. Microsoft has to charge for their software…its their business, it is how they make money. To truly compete (with open source software), companies like Microsoft would have to have that revenue from somewhere else. They’d have to develop the ad revenue that Google has. And, at this point, it’s impossible. Google is such a large corporation that almost no one can compete with their power. How can Microsoft win hardware manufacturers’ hearts because Google has such a large ad revenue that they can afford to make it free?
It’s as if the I-make-the-rules-because-I-own-the-guns gang leader gets upset because the rival gang leader goes out and buys his own gun. Oh no, who makes the rules now? Who enforces what rule now?
In the business world, you have to play by the rules of the game…whatever that game is, at whatever time it happens to be. If you want a piece of mobile advertising, you partner with a computer giant for their release and then go behind their backs and release a similar mobile operating system for free so that the cost to manufacturers is much lower. If you feel as if you’re losing ground to an operating system that is being given out for free and you know that that operating system violates several patents that a now defunct tech company owns, you buy them up to even the playing field.
It’s the way that business works. It’s the way the world works.
So, play by the rules. Throw the cheap shots. Invade others’ turf. Undercut their margins and prices. Talk yourself up and convince people to become addicted to your products.
Do all these things, because it’s business, innovation, and the American Dream.
But for God’s sake, don’t complain about it.
You were the one who spurred it on to begin with.
For the record, I really enjoy both Google and Apple’s business models. I think Google’s is a bit scarier but I have faith that our government will help keep us protected in a situation where Google would become Big Brother. I’m just, as in the case of Casey Anthony, tired of people (especially company leaders) publicly complaining about how the rules were followed.
Play the game, because the game is all you have.