Google surely loses no opportunity to drum the message that they are the leading search company primarily because of their genius engineers solving hard computer science problems.
No doubt this propaganda is great for their hiring engine. Which computer science undergraduate wouldn't want to solve 'hard problems' and get paid a lot doing it while getting fat on the gourmet snacks?.I have to commend them on this marketing stunt. And they promptly justify why they need to continue doing this for the foreseeable future - because search has practically zero switching costs for the user, therefore Google has to remain significantly better off than competitors if it wants to be the leader in search.The argument is also used to potentially ward off antitrust allegations. Competition is only a click away.
Recently Google's chief economist Hal Varian tried to explain on his NY times column and a post on the official Google blog on why Google was successful .He talks about kaizen - the Japanese product development methodology of continuous improvement. Google's billion queries a month give it ample data to improve the algorithm. Sure all this helps Google stay ahead and the messaging certainly does help win with antitrust regulators.But why doesn't anyone care to point out that their dominant share in search is not as easy to out perform as they claim it is - build a better search engine and users will come flocking to you because search is a 1 click switching cost business.No!There is something called Network effect and Google benefits from many network effects to the extent that breaking their monopoly is not as simple as doing a better search engine. Looks like their internal propaganda got Hal too.
Network effect or demand side economies of scale happens when the product's utility improves as more people use it. Lot of products to name which have benefited from the network effect - the telephone, fax machine, Windows, social networking and search.
Google's network effect? Here is how
A better search engine - more users - better trained algorithm.
A better search engine - more users - more advertisers - more tools and SEO -> more advertisers -> more users because of better targeted ads.
10 years ago when 2 PhD students came up with a great search engine they were at the right place at the right time. Network effects compounded from then on to make them the leader in search.
When demand side economies of scale work in your favour it is good enough to be only marginally better off than the rest of the pack.The 'low switching cost' actually works in Google's favour here. After all why would the end user switch to another search engine even if it is just 0.05% worse off than Google, when Google is just a click away and the users have all the network effects accruing to them.
So is Google's market share solely because it out executes everyone else on sheer engineering brilliance? You got to be kidding yourself. Network effects of the search economics and the serendipity to hitch a ride on it at the appropriate time have played a bigger role than Google would have you believe. How do you think Microsoft got what it has with Windows today?
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2 comments:
Vivek Krishna said...
Can you briefly (for a lay person) explain the technical reasons why the BIS is agains OOXML. That will help the larger populace take an unbiased stance
- Its patented and not everyone is free to read / write OOXML files. You need a license from Microsoft to do that. Too bad for a open standard. Microsoft reserves the right to whom it may grant the permission and at what cost
- OOXML is 6000 pages long, the final draft is not yet ready, no software in the market can implement such a standard.
- It was made to kill ODF, which many government bodies have started using. They need a open standard. Microsoft was loosing sales of MS Office since doc files are just binary blobs. In order to bid for government projects they needed a vaporware standard. They created OOXML just for that - they have no intention to implment it.
- Microsoft controls the standard. No one knows whether and under what license they will release it in future. The future is totally uncertian.
- MS Office is Microsoft main cashcow and they are crossing all lines of decency to protect that. Once the iron hold on documents is lost - MS Office looses its luster. People have been locked in doc/xls/ppt for years - there are no other options.
- MS Office / OOXML will only work on Windows - or whatever Microsoft decides to support. Linux support is just another vapourware.
- There are a lot of undocumented tags that only Microsoft knows about.
- Its just a paper standard - with no real world implementation till date.
- It is not suitable for fast track process. Microsoft tried to buy their way out of this. They need to go through normal process like ODF/PDF etc.
- Its neither open nor xml. Microsoft is misuing the word "open" a lot lately.
..to name a few...i hope you got the point.
They want India to rubber stamp their illegal behaviour and corruption.
OOXML is **not** suitable for **fast track process**. India objected to that. Let OOXML go through a through normal process like everyone else does.
Microsoft clearly bought the votes by stacking the international panels with their own people/bribing. It was vote grabbing - rather than anything technical.
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