Google's preoccupation with the smartphone business will be their undoing in the end. Besides costing them billions of real dollars, it has distracted upper management from the company's core business. If those two things were not enough, the whole smartphone focus has alienated the support of two major bases of positive synthesis -- Microsoft and Apple.
The loss of Apple's goodwill has especially bad long-term consequences. Apple about two steps away from isolating Google from Apple's customers, and that never needed to have happened. When I can ask Siri for information and I get the answer to most of my questions without Google even being part of the process, then Google loses about 45% to 70% of the input needed to fuel its search engine's loop.
While Bing by Microsoft is considered a lightweight by Google's standards, it really can do a reasonably comparable search. Compare the two search engines side-by-side here: http://www.bingiton.com
Five years out and Google could be a marginalized company unless they get back to their knitting quickly and quit playing hardball with companies whose friendship they need.
Exactly. And reading this story leads me to think also of Facebook and how they might be in the same boat as Google. Facebook would not have been so late to mobile:
if they had not tried to arm wrestle Apple several years ago. They might have gotten on iPhones and iPads in a big way more quickly, polish the app, and leverage an Apple partnership much more to their advantage.
Facebook playing hardball with Steve seems somewhat similar to Google trying to play hardball (and betraying) Steve. In both cases, these guys thought they could run a company the way Steve did and they tried to use some key Jobsian business skills (minus the basic integrity) against him. Jobs was known as a great business competitor and his business acumen was respected. He helped build industries and create wealth for very many people when those upstarts were still sucking on pacifiers. Speaking of goodwill, despite public perception, Steve had tons of it.
Those upstarts just didn't get it. Steve offered Larry and Sergy and also Mark wisdom, advice and partnerships. Google intruded on Steve's space, but Apple wasn't stupid enough to go all-in on advertising, search, and social. iAds still struggles, but it's peripheral, not core to Apple. IIRC, Steve stated that propping up iAds was a way for Apple to help developers monetize their efforts.
Yes, they are interested in search, but understanding mobile better, they continue to improve search via Siri (having the added benefit of locking out Google). As you mentioned, Macky, Google's future in search may be in peril.
Ping flailed and was shuttered, but is was a reaction, I think, to Facebook locking Apple out of their social network, or requiring Apple cede user data. Apple, at one point, seemed to all but beg Facebook to develop a good native app for iOS. Zuckerberg didn't like the terms (he needed user data) and declined. I don't think Apple really was interested in developing its own social network. Apple wanted a good native Facebook app because Apple's customers wanted Facebook on their mobile devices.
In none of those instances did Apple pour billions into their efforts or simply fail to move on a core aspect of their business. They saw the big picture and stuck to playing the long game. Facebook's and Google's business models may be broken insofar as they rely far too heavily on delivering eyeballs, as opposed to finding what their customers want and delivering it. Arguably, their customers are advertisers, not end users. I don't think I'm a typical case, but I got off Facebook and dropped Chrome because of degradations in privacy protection (Facebook and Google) and user experience.
I once thought buying Motorola was a great idea. Still do. But google is botching the integration. In fact, they don't seem to be trying.
I owned MOT for a number of years, but saw it's design and innovation in the phone area and chip area lackluster. It wasn't just that the stock was going nowhere (I invest for the long term), it didn't see MOT having any future but some aging IP. The $12.5B Google put out to purchase MOT was too high but I expected GOOG to revive MOT to recoup their purchase price. Not what happened.
If you recall, MOT was the designer and supplier of the G3/G4 and promised G5 Apple was expecting. Apple gave up and went Intel, and now ARM for their mobile devices.
I never understood the rationale for Google buying MOT. If Google was attempting to broaden their core, then they seemed to have forgotten to invest in MOT's core strengths, and pushed them to innovate again. But, alas, they used MOT solely as a pawn in its IP battles, and left MOT to die.
Given the ideas and products some folks GOOG are showing, GOOG seems less a for-profit organization, than non-profit NGO. They seem to be of two minds: madonna and whore; the battle is happening within GOOG.
I once thought buying Motorola was a great idea. Still do. But google is botching the integration. In fact, they don't seem to be trying.
I owned MOT for a number of years, but saw it's design and innovation in the phone area and chip area lackluster. It wasn't just that the stock was going nowhere (I invest for the long term), it didn't see MOT having any future but some aging IP. The $12.5B Google put out to purchase MOT was too high but I expected GOOG to revive MOT to recoup their purchase price. Not what happened.
If you recall, MOT was the designer and supplier of the G3/G4 and promised G5 Apple was expecting. Apple gave up and went Intel, and now ARM for their mobile devices.
I never understood the rationale for Google buying MOT. If Google was attempting to broaden their core, then they seemed to have forgotten to invest in MOT's core strengths, and pushed them to innovate again. But, alas, they used MOT solely as a pawn in its IP battles, and left MOT to die.
Given the ideas and products some folks GOOG are showing, GOOG seems less a for-profit organization, than non-profit NGO. They seem to be of two minds: madonna and whore; the battle is happening within GOOG.
Remember that MOT split into Motorola Mobility (MMI) and Motorola Solutions (MSI), before (in preparation for) the GOOG acquisition.
Some of the reasons we have heard for GOOG buying MMI are:
1. to prevent MMI from filing patent suits against other Android OEM's
2. to realize tax benefits from MMI loss carry forwards
3. to gain a patent portfolio for battling Apple
4. to gain expertise in making devices
For number 4, MMI was losing money before the acquisition and GOOG had no deep experience in creating devices, so I don't believe that was a strong motivation.
For number 3, it seems to be turning out that the useful patents were FRAND type, so that has not been too big a gain.
For number 2, I haven't tried to figure out GOOG's financial statements, but I assume it has been of benefit. Of course for GOOG investors, the tax benefit has been more than offset by the hit to earnings per share caused by consolidating MMI's losses.
For number 1, GOOG eliminated the threat, but the lack of success of leveraging MMI's patents after the merger may indicate that the threat was illusory in the first place.
In summary, I think MMI took GOOG to the cleaners.
So the obvious question is: will actions like the one you describe above and others expose Apple to antitrust suit should they be successful enough to gain more than 40% of market share?
I don't think so. I don't think Apple can realistically shut Google out, and Apple know it.
This shows Google's idiocy in their thinking. They don't need their own OS at all. Even Microsoft can't shut Google out if people want Google's services. But Google want to be dominant like Microsoft and now that they made the bed they must sleep in it.
Google's preoccupation with the smartphone business will be their undoing in the end. Besides costing them billions of real dollars, it has distracted upper management from the company's core business. If those two things were not enough, the whole smartphone focus has alienated the support of two major bases of positive synthesis -- Microsoft and Apple.
The loss of Apple's goodwill has especially bad long-term consequences. Apple about two steps away from isolating Google from Apple's customers, and that never needed to have happened. When I can ask Siri for information and I get the answer to most of my questions without Google even being part of the process, then Google loses about 45% to 70% of the input needed to fuel its search engine's loop.
While Bing by Microsoft is considered a lightweight by Google's standards, it really can do a reasonably comparable search. Compare the two search engines side-by-side here: http://www.bingiton.com
Five years out and Google could be a marginalized company unless they get back to their knitting quickly and quit playing hardball with companies whose friendship they need.
that's pretty interesting. I don't use bing at all, apart from the occasional comparison., but i've noticed that they've switched their layout to one very similar to googles - ie minimal text and identical results layout. i wonder if they will try and switch bing for google and the facelift is to soften the blow. how many people would notice and only know google by name rather than the results. how many people would notice ? I would put money on apple telling microsoft to sort their search out ready for a shift.
I don't think so. I don't think Apple can realistically shut Google out, and Apple know it.
This shows Google's idiocy in their thinking. They don't need their own OS at all. Even Microsoft can't shut Google out if people want Google's services. But Google want to be dominant like Microsoft and now that they made the bed they must sleep in it.
simple question...would you put all your eggs in one basket?
simple question...would you put all your eggs in one basket?
I don't think this is about spreading the risk at all. This is all about control and dominating market, now and future. They saw the void Microsoft didn't fill so they filled it. But while they're dominating mobile phone market just as they planned, they got more income from iOS than their own OS. This beg a question about their wisdom that they thought things through? Did they think things through when they bought Moto? Does having your own mobile OS worth being an enemy with your closest friend and main source of income? Does it worth being a hypocrite (open yet not open)? etc.
MotoMo just announced a half-billion dollar loss, so added up it's been a $13 billion dollar blunder...if not more.
These kinds of losses and poor acquisitions come right out of the cookie jar. Think about it, how much did Google have to earn in order to have this much flushed away? Normally it would be around 1:20 ratio.
Motorola is a sink hole and will continue to leak money. $13 billion is just the start.
I once thought buying Motorola was a great idea. Still do. But google is botching the integration. In fact, they don't seem to be trying.
Motorola has been in big trouble for years, despite being put on the map by Verizon's original Droid Ads. As Verizon moved to label other companie's phones as Droids, that gain has been lost, and Motorola's sales have been dropping.
There's really little Google can do about it. Other Android ODMs are already not comfortable with this purchase as it pits Google against their "customers", something you learn in business 101 to not do.
The problem Google now has is that they can't give Motorola preferential treatment. That even means that phones developed by Motorola by themselves to be competitive and gain marketshare will be looked at askance by Google's partners. Google has put themselves in a pickle with this, and I don't see a way out other than selling off the hardware division. But then that spun off, or sold division would find itself without patents with which to defend itself.
It's noteworthy that this is specifically an antitrust suit. Antitrust comes into play only when a company is successful to a certain point (some have noted 40% of market share as one metric courts sometimes use to pursue antitrust actions).
With Android's majority of the mobile market, it's exposed to such actions in ways that Apple, with its 29%, cannot be.
But again, antitrust is a function of success. One can be as controlling as they want, such as you describe above, and as long as their success is limited in market share they can avoid antitrust actions.
So the obvious question is: will actions like the one you describe above and others expose Apple to antitrust suit should they be successful enough to gain more than 40% of market share?
Right now the strategy of prioritizing profits over market share has been a very good one in many ways, not the least of which is completely bypassing such questions. But sometimes things can grow beyond expectations...
You're not getting some of the concept here. Antitrust isn't that simple. Even if a company has 90% marketshare, it isn't violating antitrust law. There is a difference between a natural monopoly and a built up monopoly, and an abuse of monopoly.
A natural monopoly develops if a company, through their product development and marketing manages to have a product that's so popular that it sells a very large percentage of all the products in the category, it could approach 100%. And that's ok. Nothi g wrong with that.
A built up monopoly develops if a company buys out competing companies in a product line until it controls a very large, usually 60%, though as you point out, it could be lower, share of the market. Around that point, the government will step in and prevent further monopoly inducing purchases.
Abuse of monopoly develops when a company that has a natural monopoly attempts to do whatever limits competition from building up their own sales. It could be lowering prices to the point that smaller companies can't afford to remain in business. That's like what Amazon has been trying to do with e-book sales. After the competition is vanquished, prices are raised to even higher levels than would have been the case with successful competition. They could also refuse to allow other companies to "plug" into their systems. Either with software or hardware. They are allowed to charge a reasonable fee to do so in the case of hardware.
But some of this is difficult to pursue. For example, is a company with a very large monopoly or two in different areas than one it is entering, allowed to use those enormous monopoly profits to (or attempt to) dominate another area by underselling, or giving away for free, something that will damage sales of other competitors?
Apparently yes. Both Microsoft and now Google are doing this.
Comments
Quote:
Originally Posted by Macky the Macky
Google's preoccupation with the smartphone business will be their undoing in the end. Besides costing them billions of real dollars, it has distracted upper management from the company's core business. If those two things were not enough, the whole smartphone focus has alienated the support of two major bases of positive synthesis -- Microsoft and Apple.
The loss of Apple's goodwill has especially bad long-term consequences. Apple about two steps away from isolating Google from Apple's customers, and that never needed to have happened. When I can ask Siri for information and I get the answer to most of my questions without Google even being part of the process, then Google loses about 45% to 70% of the input needed to fuel its search engine's loop.
While Bing by Microsoft is considered a lightweight by Google's standards, it really can do a reasonably comparable search. Compare the two search engines side-by-side here: http://www.bingiton.com
Five years out and Google could be a marginalized company unless they get back to their knitting quickly and quit playing hardball with companies whose friendship they need.
Exactly. And reading this story leads me to think also of Facebook and how they might be in the same boat as Google. Facebook would not have been so late to mobile:
http://allthingsd.com/20121019/facebook-we-werent-moving-fast-enough-in-mobile/
if they had not tried to arm wrestle Apple several years ago. They might have gotten on iPhones and iPads in a big way more quickly, polish the app, and leverage an Apple partnership much more to their advantage.
Facebook playing hardball with Steve seems somewhat similar to Google trying to play hardball (and betraying) Steve. In both cases, these guys thought they could run a company the way Steve did and they tried to use some key Jobsian business skills (minus the basic integrity) against him. Jobs was known as a great business competitor and his business acumen was respected. He helped build industries and create wealth for very many people when those upstarts were still sucking on pacifiers. Speaking of goodwill, despite public perception, Steve had tons of it.
Those upstarts just didn't get it. Steve offered Larry and Sergy and also Mark wisdom, advice and partnerships. Google intruded on Steve's space, but Apple wasn't stupid enough to go all-in on advertising, search, and social. iAds still struggles, but it's peripheral, not core to Apple. IIRC, Steve stated that propping up iAds was a way for Apple to help developers monetize their efforts.
Yes, they are interested in search, but understanding mobile better, they continue to improve search via Siri (having the added benefit of locking out Google). As you mentioned, Macky, Google's future in search may be in peril.
Ping flailed and was shuttered, but is was a reaction, I think, to Facebook locking Apple out of their social network, or requiring Apple cede user data. Apple, at one point, seemed to all but beg Facebook to develop a good native app for iOS. Zuckerberg didn't like the terms (he needed user data) and declined. I don't think Apple really was interested in developing its own social network. Apple wanted a good native Facebook app because Apple's customers wanted Facebook on their mobile devices.
In none of those instances did Apple pour billions into their efforts or simply fail to move on a core aspect of their business. They saw the big picture and stuck to playing the long game. Facebook's and Google's business models may be broken insofar as they rely far too heavily on delivering eyeballs, as opposed to finding what their customers want and delivering it. Arguably, their customers are advertisers, not end users. I don't think I'm a typical case, but I got off Facebook and dropped Chrome because of degradations in privacy protection (Facebook and Google) and user experience.
I think that was the thinking. And by doing so, now Apple is shutting them out. Isn't life weird?
deleted
Well the FTC just helped fix it. No more frivolous FRAND-abusing suits.
Quote:
Originally Posted by stelligent
I once thought buying Motorola was a great idea. Still do. But google is botching the integration. In fact, they don't seem to be trying.
I owned MOT for a number of years, but saw it's design and innovation in the phone area and chip area lackluster. It wasn't just that the stock was going nowhere (I invest for the long term), it didn't see MOT having any future but some aging IP. The $12.5B Google put out to purchase MOT was too high but I expected GOOG to revive MOT to recoup their purchase price. Not what happened.
If you recall, MOT was the designer and supplier of the G3/G4 and promised G5 Apple was expecting. Apple gave up and went Intel, and now ARM for their mobile devices.
I never understood the rationale for Google buying MOT. If Google was attempting to broaden their core, then they seemed to have forgotten to invest in MOT's core strengths, and pushed them to innovate again. But, alas, they used MOT solely as a pawn in its IP battles, and left MOT to die.
Given the ideas and products some folks GOOG are showing, GOOG seems less a for-profit organization, than non-profit NGO. They seem to be of two minds: madonna and whore; the battle is happening within GOOG.
Remember that MOT split into Motorola Mobility (MMI) and Motorola Solutions (MSI), before (in preparation for) the GOOG acquisition.
Some of the reasons we have heard for GOOG buying MMI are:
1. to prevent MMI from filing patent suits against other Android OEM's
2. to realize tax benefits from MMI loss carry forwards
3. to gain a patent portfolio for battling Apple
4. to gain expertise in making devices
For number 4, MMI was losing money before the acquisition and GOOG had no deep experience in creating devices, so I don't believe that was a strong motivation.
For number 3, it seems to be turning out that the useful patents were FRAND type, so that has not been too big a gain.
For number 2, I haven't tried to figure out GOOG's financial statements, but I assume it has been of benefit. Of course for GOOG investors, the tax benefit has been more than offset by the hit to earnings per share caused by consolidating MMI's losses.
For number 1, GOOG eliminated the threat, but the lack of success of leveraging MMI's patents after the merger may indicate that the threat was illusory in the first place.
In summary, I think MMI took GOOG to the cleaners.
I don't think so. I don't think Apple can realistically shut Google out, and Apple know it.
This shows Google's idiocy in their thinking. They don't need their own OS at all. Even Microsoft can't shut Google out if people want Google's services. But Google want to be dominant like Microsoft and now that they made the bed they must sleep in it.
Quote:
Originally Posted by Macky the Macky
Google's preoccupation with the smartphone business will be their undoing in the end. Besides costing them billions of real dollars, it has distracted upper management from the company's core business. If those two things were not enough, the whole smartphone focus has alienated the support of two major bases of positive synthesis -- Microsoft and Apple.
The loss of Apple's goodwill has especially bad long-term consequences. Apple about two steps away from isolating Google from Apple's customers, and that never needed to have happened. When I can ask Siri for information and I get the answer to most of my questions without Google even being part of the process, then Google loses about 45% to 70% of the input needed to fuel its search engine's loop.
While Bing by Microsoft is considered a lightweight by Google's standards, it really can do a reasonably comparable search. Compare the two search engines side-by-side here: http://www.bingiton.com
Five years out and Google could be a marginalized company unless they get back to their knitting quickly and quit playing hardball with companies whose friendship they need.
that's pretty interesting. I don't use bing at all, apart from the occasional comparison., but i've noticed that they've switched their layout to one very similar to googles - ie minimal text and identical results layout. i wonder if they will try and switch bing for google and the facelift is to soften the blow. how many people would notice and only know google by name rather than the results. how many people would notice ? I would put money on apple telling microsoft to sort their search out ready for a shift.
simple question...would you put all your eggs in one basket?
Quote:
Originally Posted by AbsoluteDesignz
simple question...would you put all your eggs in one basket?
I don't think this is about spreading the risk at all. This is all about control and dominating market, now and future. They saw the void Microsoft didn't fill so they filled it. But while they're dominating mobile phone market just as they planned, they got more income from iOS than their own OS. This beg a question about their wisdom that they thought things through? Did they think things through when they bought Moto? Does having your own mobile OS worth being an enemy with your closest friend and main source of income? Does it worth being a hypocrite (open yet not open)? etc.
Quote:
Originally Posted by Macky the Macky
MotoMo just announced a half-billion dollar loss, so added up it's been a $13 billion dollar blunder...if not more.
These kinds of losses and poor acquisitions come right out of the cookie jar. Think about it, how much did Google have to earn in order to have this much flushed away? Normally it would be around 1:20 ratio.
Motorola is a sink hole and will continue to leak money. $13 billion is just the start.
Motorola has been in big trouble for years, despite being put on the map by Verizon's original Droid Ads. As Verizon moved to label other companie's phones as Droids, that gain has been lost, and Motorola's sales have been dropping.
There's really little Google can do about it. Other Android ODMs are already not comfortable with this purchase as it pits Google against their "customers", something you learn in business 101 to not do.
The problem Google now has is that they can't give Motorola preferential treatment. That even means that phones developed by Motorola by themselves to be competitive and gain marketshare will be looked at askance by Google's partners. Google has put themselves in a pickle with this, and I don't see a way out other than selling off the hardware division. But then that spun off, or sold division would find itself without patents with which to defend itself.
A mess all around.
You're not getting some of the concept here. Antitrust isn't that simple. Even if a company has 90% marketshare, it isn't violating antitrust law. There is a difference between a natural monopoly and a built up monopoly, and an abuse of monopoly.
A natural monopoly develops if a company, through their product development and marketing manages to have a product that's so popular that it sells a very large percentage of all the products in the category, it could approach 100%. And that's ok. Nothi g wrong with that.
A built up monopoly develops if a company buys out competing companies in a product line until it controls a very large, usually 60%, though as you point out, it could be lower, share of the market. Around that point, the government will step in and prevent further monopoly inducing purchases.
Abuse of monopoly develops when a company that has a natural monopoly attempts to do whatever limits competition from building up their own sales. It could be lowering prices to the point that smaller companies can't afford to remain in business. That's like what Amazon has been trying to do with e-book sales. After the competition is vanquished, prices are raised to even higher levels than would have been the case with successful competition. They could also refuse to allow other companies to "plug" into their systems. Either with software or hardware. They are allowed to charge a reasonable fee to do so in the case of hardware.
But some of this is difficult to pursue. For example, is a company with a very large monopoly or two in different areas than one it is entering, allowed to use those enormous monopoly profits to (or attempt to) dominate another area by underselling, or giving away for free, something that will damage sales of other competitors?
Apparently yes. Both Microsoft and now Google are doing this.
deleted