Net Results: Whether you love Google and hail it as the purveyor of all things cool, or hate it for beginning to turn into a tech Godzilla, one thing is certain: This is one company that has totally understood the net and how to make it pay, writes Karlin Lillington
In figuring out ways to combine free services - to consumers - with income generation (for Google, hard cash paid by advertisers and clients for ad placements and services), Google has stumbled across the holy grail of the web.
Let me rephrase that. The company most certainly has not stumbled into this valuable state, although it might like to make it appear that way.
Google loves to be seen as a goofy good guy, accidentally figuring out ways to make us happy with all its fun stuff while at the same time making enough to stay afloat and to keep on providing us with online things to play with.
But its gameplans have been keenly analytical and smart from early on. The company is certainly extremely wise in understanding that, post all the dotcom fiascos and shareholders' burnt fingers, no one wanted to hear loudmouth plans about what a company can or is going to do for us.
Strangely, in a world smothered in advertising and brand promotion, we want to figure it out for ourselves. We love to feel like we are always part of an in crowd catching on by word of mouth to the latest new thing, in the so-called "gift economy" tradition of the pre-commercial net.
The gift economy thesis is that people do all sorts of really wonderful things on the net and give them away for free because they get plenty of useful or just plain old fun things back. Hence from practically day one, someone figured out how to create games, newsgroups, mail lists, websites full of information, little free programs and so on - gift economy goods.
Against a free market backdrop, who'd have thought that millions of people would really enjoy doing things for others for no remuneration at all? But they do, and that's one of the reasons why people really like the internet, and really don't like companies that overtly try to make money off them while banging on about how technically slick they are.
That, I think, is one reason why Google has adeptly created an image of itself as the ultimate gift economy site - free search engine, free news aggregation, free search toolbar, free Google Earth for looking at the whole planet - used constantly by TV news in the US to show the arrival of Hurricane Rita - and now, free Wi-Fi (more about that in a moment).
Of course, it is really nothing of the sort. "Gift" be damned; it sucks in money very successfully for what it does, but conveniently for us, we - the little guys using the web - don't directly pay, so this all goes on out of our line of sight.
All of this explains why Google is one of the hottest companies on the planet at the moment, and its association with a project brings kudos and worldwide interest.Meanwhile, back in the bank accounts, Google sits on an extraordinary cash pile of $7 billion (€5.86 billion), a combination of income received and funds raised through two sales of shares.
Interestingly, what it doesn't spend that $7 billion on is swathes of advertising and, going back to an earlier point, that is what indicates just how attuned the Silicon Valley firm is to the nuances of the net.
While it does make incredible stuff - I mean, life without Google Search is impossible to imagine any more - we like to feel that Google is all about our owndegree of web smartness too. We found it ourselves, or we went there because someone told us about it, and now we use it, and tell others to use it and we are all part of a cool little Google family. We don't need no stinking advertisements!Well, except those that Google Adsense dishes out to our own little sites!
Now I see that Google has got the people all excited yet again, this time for making a bid to run a free public Wi-Fi system in San Francisco. San Francisco mayor Gavin Newsom had said that he wanted to make it the first city to provide a totally free Wi-Fi service in the US. In August he asked for bids, and now we know that Google made one of the 12 bids submitted.
The idea is that Google will make its own profit by delivering advertisements to users of the network, including the location-based advertisements that many advertisers dream about. Whether San Francisco opts for Google's service or one of the other 11 remains to be seen.
The free Wi-Fi scheme, once implemented, will undoubtedly lead to other cities considering similar set-ups - not a situation likely to make telecommunications providers very happy. Estimates are that San Francisco's 49 square miles could have a complete wireless infrastructure - which doesn't require expensive equipment, but just some small broadcast stations set up on stoplights or street lights at regular intervals - for about $10 million. That's a droplet in Google's $7 billion bucket, or, say, a fraction of the cost of the Irish Government's mothballed electronic voting machines.
Clearly, lots of providers feel that they'd be happy to build that infrastructure and can make money back by offering users a free service accompanied by advertisements, with perhaps the opportunity to pay a nominal monthly amount to avoid the advertisements. Think about it - such a system would eliminate the need for landline DSL connections or paid wireless connections. Anyone could get online with a laptop or PC with a Wi-Fi card or home base station.
Which makes you wonder why it couldn't be done here, in every city, town and village. Of course it could. Imagine if someone saw a Google-style business plan for the whole country.
Which is why Google scares the pants off a lot of other companies, including some of the biggest in the world. It keeps making "free" work for consumers. And because it does "free" first, it gets first chance at new markets by making the markets up as it goes along. Be afraid, telecoms industry, be very afraid.
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