I read an interesting article in The Guardian about Google, Android and Amazon. It was a long article, and I might not get every detail, but it makes me think about how businesses are built. There is something strange about companies that make their profit from services they don’t charge for. I think everyone who starts to wonder how Google makes money starts out a bit amazed that Google offers free internet search, and then they understand that advertisers pay. And because so many advertisers pay, Google makes its profit.
But if you ask my small company, Stenstrominfo, about paying for ad links, our advice is usually: don’t pay! First, check what happens when you search for the product or the place you sell. If you are on top of the searches, don’t bother to pay. People avoid paid links. So, there must be a lot of companies that think as we do. Also, paying for links lowers your credibility. A ”true” search result based on content and activity is always worth more. This means we recommend that companies access the benefits of Google without paying for them.
And that always gives me the feeling that something must be wrong in Google’s way of doing business – but then again, who am I to speak? Our duo company is smaller than small compared to Google, but even so, I can’t get rid of that feeling.
Then, if I turn it around, what does Google have to do to make as much money as possible from its ”free” services? Well, they need to get better and better at collecting data from their users. Users pay through their search patterns. I don’t think many people really think about that. Good or bad? When does it pass the limit?
It gives you a kind of creepy feeling.
Compare with Amazon. Their business model makes sense. They sell books and are constantly expanding their services to improve. People pay for the books. They don’t need to know ”everything” about people’s search patterns – not like Google – and when they collect data, it’s easier to understand why they do it. They want to sell more books. Fine.
But Google always has something diffuse about its business model. What are they doing with all the information they collect? How far will they go? How do they make use of all their ”free” stuff like Gmail, Google+ and documents? We don’t really know; we can only guess. And we don’t know how they will develop. Because they are not ”selling books”.
Now, Android, an open-source operating system, is another example of Google offering ”free services” again. ”Free” is suspicious. Amazon is in its big way using Android, like Stenströms in a micro-small way is using Google: only picking out the good parts and using it for free, because it’s possible.
And I still think there must be something wrong with Google’s business model. It’s not crystal clear how they make their money. They are not consistent. There always seems to be a missing piece. Where is the limit for ”free”? Android is also part of the messy PC-world thinking, where everyone can choose their own way, which results in a lot of different UIs on tablets, more bugs, more problems, and some kind of organic structure that no one can control.
A lot of people criticise Apple for its closed ecosystem, and maybe they also make jokes about how secretive everything is, but it’s much easier to understand what Apple is and how it makes money. In that regard, Apple and Amazon are more transparent. No one can be suspicious of how Apple and Amazon make their money, because it’s obvious. And when you think like that, Google and Android’s talk about being open and free seems more like a smokescreen to cover up their true goals, or to hide the fact that they might not know what they are doing…
The same goes for Facebook, though its way of using the information is a bit more transparent than Google’s. I think more people understand how Facebook get their money.
The Internet is a global infrastructure. What are search engines from that perspective? How can we trust the search results we get? For example, when I was in Finland, the search results differed significantly from those I got in Sweden. How much does Google adjust my searches after what they believe I am looking for? Censor? Or just practical filters that help me? Google is working on many levels, making money here and there, but always in a kind of sneaky, camouflaged way. Maybe it’s time for a neutral search engine that the users pay for?
The more I think about it I feel that Google (including Android) is about to destroy themselves. They have too many holes and missing pieces, too much space for chaos and not enough control mechanisms. They are losing their glory. My prediction is that they will have to rebuild their business from scratch and create a consistent idea that is simple enough for the general public to understand. No sneaky business. No organic, free and wild structure. Just a simple idea that makes sense and doesn’t make people feel that they are fooled.
Simplicity. Beauty. Logic. A common piece of advice for people starting a new business is to create a business idea that is easy to explain. I believe there is a lot of truth in that.
