What Google Would Do

Is Google’s OS the end of the OS – the long-predicted moment when Google and the web take over the PC? Or is it merely the disruptive OS throwing marbles on the floor for Microsoft and to some extent Apple and the software industry? Or will it be a platform and boon for app developers and PC makers and cloud companies? Or all of the above? Yes.

One may try to parse the motives and implications of the move like Latin haiku, but I think it’s simple; it usually is with Google: It saw an opportunity to serve the end user and took it. The more such opportunities it grabs, the more benefit it brings to more people, the more money it makes. Maps, Docs, Reader, Android, book search, translation tools, GoogleNews are all that. Some attempts don’t stick to the wall; some frontiers remain (it has not won in the social web, the live web, the deep web, and the local web); some things Google has to buy; some still don’t have a clear business model. All have competitors; none is a monopoly, though search and advertising appear that way to some.

How does Google win? Its products are generally but not always better and cheaper (read: free) because Google’s real secret is that it understands the economics of the internet and competed aggressively not against technology and internet companies but instead it competed for advertisers, selling performance over scarcity. The more Google serves end users – and the more it learns about them – the more opportunities it has. These are the economics of free.

I know the question of whether Google is too big will be raised when I appear on Brian Lehrer’s show today (at 11a ET) with Siva Vaidhyanathan. That’s the question Lehrer asked Eric Schmidt at the Aspen Ideas Festival:

“You’ll be surprised that my answer is no,” Schmidt responded. “Would you prefer the government running innovative companies?” No surprise that I agree with Schmidt. Lehrer’s point is that banks needed regulation and that information is becoming as important as money (well, he didn’t go that far). But I say government did regulate banks and AIG and did a horrid job of it. And look at the storm to regulate and break up Microsoft, which is no longer a threat but suddenly a victim. Heh. For that matter, look at what the market did to the oligopoly of Detroit and what Detroit did to itself. Clear Channel, Tribune Company, McClatchy – those are examples in media alone. Big has a way of tumbling of its own weight.

In any case, who’s to say what’s too big? We have a cultural problem of admiring big and then hating big; we want you to grow and then we want to cut you down to size. But this notion of being too big is arbitrary, ultimately meaningless if externally defined.

In this new economy, it may be that Google isn’t yet big enough, that it hasn’t brought its services and innovation – and goad to others to innovate – to enough corners of the internet. We will benefit from there being another operating system that opens up the applications and services to invention, breaking the Microsoft (and Apple) duopoly. We will end up getting cheaper applications and more choice among them. We will end up being able to use cheaper machines because our stuff will be in the cloud.

Yes, Google still has room to grow and there’s more benefit we have to gain. I’ll go farther: Google isn’t yet big enough.

: ALSO: Mashable’s questions about the Chrome OS.

: Gigaom’s good analysis of the news:

Today Google went wild and announced its plans to create the Chrome operating system, which it says will be designed to run on netbooks. But it’s really an attempt to keep Google relevant as an advertising powerhouse as consumers begin spending more time playing with web-connected apps than the web itself. It’s the search giant’s reaction to a wholesale change in computing driven by ubiquitous wireless access and mobility. The Chrome OS is another step in allowing Google to create what we’ve called the OS for advertising — an ad platform that extends across all devices and all screens.

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  • Yes, Google still has room to grow. And for the most part they are achieving their growth via innovation rather than manipulation.

    However, I think we are seeing them near their peak. This is not because they will stop innovating, but because the constraints on them will tighten.

    * Antitrust action will take its toll in the US and especially, later, in Europe where the added factor of cultural antipathy toward America will play a role.

    * Original employee talent will start to retire and some talent will be lured elsewhere by the prospect of things newer or faster-growing.

    * The open-source nature of much of Google’s activity will mean that they will never be able to have the stranglehold on our computing experience that Microsoft once enjoyed.

    * Existing competitors will not cede their territory without a fight.

    * New competitors and innovators will create interference for Google in certain areas or will chip away at Google in others.

    Google will be strong, robust and innovative for many years to come. They will keep exciting us. But the period of its ascendancy is nearing an end and its next challenge will be how to maintain momentum in the face of much stronger headwinds.

    Kind regards,

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  • I’ve long held a belief that unlike other industries, technology loves monopolists (or near-monopolists), and that rather than stifle innovation, they actually drive it. Witness IBM’s mainframe, Wang’s Office Information System, WordPerfect, Lotus 1-2-3, Microsoft Windows, Microsoft Office, the Palm Pilot, America Online, Netscape Navigator, the iPod, and most recently, the iPhone.

    Each was the 800 lb. gorilla of it’s day, and each seemed invincible at the time. The empirical truth about technology monopolies is two-fold: they either go from “first to worst” in an unbelievably short period of time (before Microsoft Word appeared, WordPerfect had near 90% of the Word Processing marketshare. Afterwards – almost 0%), or they retain their monopolist position in a market segment that the market no longer considers cutting edge (anyone want to challenge IBM with a better mainframe? They’re still the leader, after all…)

    (Shameless plug: Much more on this topic here)

    With regards to Google’s Chrome-based OS, I think the problem they’re going to face is the second one mentioned above. The desktop is no longer the power base for personal computing. Google has, ironically, seen to that more than perhaps any other company. So going up against Microsoft Windows might be challenging, but I can’t imagine too many of the 90% of computer users that have Windows today migrating to something else for a marginal improvement in their desktop OS. It just doesn’t matter enough to be worth the effort.

    Now, if the Google OS is aimed at MS Internet Explorer, then it’s a much more interesting (and much more significant) play. I could see Google making the case that your netbook doesn’t need it’s own desktop OS, and that you can basically boot right into your browser (Chrome) and get everything you need from the machine from there. That’s a paradigm shift that will leave Microsoft Windows around as the desktop OS of history (like the IBM mainframe), while introducing a whole other category of devices that don’t have “desktops” per se.

    It’s Scott “the network is the computer” McNealy’s dream, but with the product suite and the capital to back it up…

    • “The Network is the computer” was McNealy stealing “The Network is the System” from Digital. Julius Marcus (VP of Networks at Digital) was touting that line in 1977 – and DEC indeed ran adverts themed around it long before Sun even existed. Even Ethernet came later…

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  • Tex Lovera

    Although I mostly agree with Evan, I don’t think that just because Google’s activities are primarily open-source is a barrier to them gaining a “stranglehold” on our computing experience; I think they’ll accomplish market dominance, but in a different way.

    I don’t believe that Google is a perfectly benign entity. However, I don’t think their approach is to directly obliterate the competition like Microsoft through bullying tactics. Rather, it is to provide superior services/products to gain their dominance.

    But once they have that dominance, then what? That’s what concerns me. Will the “open-source” nature of their activities continue, and be enough of a counter-balance to possible future “Microsoftish” behavior? I guess only time will tell.

  • I loved this post Jeff. Thank you. In particular, I found myself nodding at the mention of Clear Channel and how they ruined terrestrial radio.

  • Its groundbreaking idea from Google web OS and they are planning to wipe out Windows in a most strategic manner. Google clearly pointing to Microsoft when they say “The operating systems that browsers run were designed in an era where there was no web”. But there are few questions which are unanswered like what will happen when we will go offline in Chrome OS? Can we use offline applications like iTunes or Photoshop? Can we run third party applications? How they are going to make profit from it ? I am also bit concerned whether Chrome OS will be embraced by enterprises as it is open source and web based as there is always a security issue….Just wait another thought can Chrome OS will become a global hit especially in small countries where internet is very fickle. But leaving these things aside its going to be win-win situation for the users and it will be interesting to witness the war between giants.

  • I don’t know the details of the Chrome OS, but I wonder why Google didn’t just create its own flavor of Linux. That already has a market share and already has many developers. Why not use the power of Google to push Linux in the direction that Google wants to go, utilizing the existing community rather than competing with it?

    Needless to say, I think that Jeff’s description of the current OS environment as a “duopoly” is incomplete.

  • The reason Google can give things for free is the information that it can collect from users which it then uses to tailor its advertising. I’m one who thinks the current apocalyptic privacy complaints are a bit much, but how much more information will we be comfortable giving to one company?

  • A quick check reveals that the Chrome OS will be built on a Linux kernal, so my previous comment stands corrected. Obviously, I think that this is the right approach.

    • Andy Freeman

      Building Chrome OS on top of a linux kernel does not imply that Chrome will run linux programs. Note that Android is also built on a linux kernel and it doesn’t run (many) linux programs.

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  • Deep web solution by Internous called the Internet Search Environment Number or (ISEN) has an animated video that explains its operations at http://www.isen.org

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  • Or is this Google jumping the shark?

    1. NONE of Google’s products (bought or built) have come close to the original
    2. Google will disappear overnight if a better SE comes along tomorrow.

    • #1 is such a red herring and overused line. Ford never came up with a product with the marketshare of the Model T.

      • Jeff – I agree with your point, but perhaps an auto industry analogy isn’t quite what you were reaching for here? ;-)

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  • Better sell your Microsoft shares before Chrome OS hits the market next summer.

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  • Rob Levine

    At the risk of raining on the parade, Google only makes a profit on a few core businesses, all of which are related to advertising. It may be able to dominate other businesses, but there’s not much hard evidence to support that.

    • Laid Off Too

      Mr Levine, since I’ve been critical of how your comments have been worded in the past, let me congratulate you on a very well worded point,
      I agree with your post. Google is taking on a very big project with some tough competitors. Chrome OS may indeed fail. However, trying something and failing can be a good thing. A popular example is 3M’s Post-It Notes.

    • As I said above, I think this is Google defining a new marketspace, not competing with Microsoft in theirs. I can easily envisage a world in which “personal” computers (i.e., computers that are used for “standalone” activities as well as network activities) are Windows dominated, while “network” computers (i.e., computers that don’t do anything without the network) are Chrome OS dominated.

      The return of the dumb terminal! It’s been a long time, but it makes a lot more sense now.

      And sorry for referencing Scott McNealy twice in two comments, but as Sun proved to us all – there will always be some need for a non-networked machine. I can’t imagine it’s worth Google’s time, money or reputation to chase after that…

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  • I beg to differ. Google is gradually shifting from innovation to manipulation. They’re just following leads and riding on the bird they once captured.

    What I want to say is that I just bought the Samsung Chromebook and I am least impressed with the Chrome OS. It’s a premature release and lacks stability. Just my two coins to the point.

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