Now that it’s unequivocally getting into the publishing business, Google is going to be a fascinating case study in co-opetition.
The big G is in danger of getting itself into a very tight spot. It’s main revenue business is acting as an advertising broker for publishers and media companies yet it continually creeps forward encroaching onto the turf of its clients. Google News was the first major step it took in this direction and it’s been able to push the line that the service complements publisher’s business because it sends traffic their way and Google does not use the site as an advertising vehicle.
However, media companies, who are bitchy at the best of times, must be marking up Google on their competitive analysis chart in big red texter. Not only did Google take a significant stake in media company AOL Time Warner but a service like Google Finance is going to put it in competition with every newspaper in the world.
Down here in Australia, our primary financial newspaper, The Australian Financial Review (published by Fairfax, one of Australia’s two big newspaper companies) has been busily, but under a cloud of secrecy, building out its online service into a full-blown financial information service. I’d be very surprised if most newspaper organisations weren’t going the same way. That’s going to put them all in line for a head-long collision with the likes of Yahoo, Google and Microsoft who are putting signfiicant dollars into their own finance portals.
Yet Yahoo, Google and Microsoft are the three companies behind the world’s biggest online advertising services.
The concept of co-opetition is going to be put firmly to the test but I’m willing to bet that media companies will only sleep the enemy for as long as they absolutely have to. To use Fairfax as an example, they took a big stake in an Australian search company called Mooter who are banging on the drum of enabling publishers to handle their own contextual advertising. The question is whether any individual publisher has enough scale to do contextual advertising well. I would not be surprised to see a number of big media companies join forces and acquire, or build out a competitor, to the Google, Microsoft and Yahoo services. Media companies have a history of coming together to protect their joint interests or when they see they can make a buck out of it. To use my homeland as an example again, AAP, the de-facto wire service here is owned by the country’s three big newspaper publishers.
I think Google would do well to consider if a service like Google Finance is worth the potential grief. Reportedly, it started as a 20 per cent project. My understanding of 20 per cent project is that they’re meant to be related to Google’s core business. I struggle to understand how pissing off your core client base qualifies then as a worthy side-project.
I’ve heard all the rhetoric about the age of co-opetition and as best as I’ve been able to see more often than not it just ends up in a world of pain. Maybe, I’ve got my old school blinkers on again but I think Google would do well to re-look at its ten core philosophies because not only is it beginning to work outside of them, it’s now beginning to work counter to them.
Filed under: Google
Phil Sim 
I was talking to Google’s PR office in the UK for a story recently and they positively bridled when I referred to them as a media owner. They’re a technology company, she said. We were talking about Blogspot specifically and she said that since Google didn’t own the content, it was not the media owner. Jeez, I didn’t know being a media owner was such a bad thing!
Of course, Google IS a media owner as well as being a technology company. They don’t own the content but they own the environment and therefore they can sell ads. In the case of their main search engine, you could argue they own the content too since the content is not the links but the algorithmic generated list of links. But that’s not relevant. Any company that makes its living from selling ads is a media company and Google is no exception to this.
I think there are two types of media companies. Most media owners own the content and sell the ads. Some own the content and don’t sell ads, either because they are funded in some way such as the ABC and the BBC or because they have a different model such as subscriptions or because they are a labour of love such as non-commercial blogs. Then there are others that don’t own the content but do sell ads. Billboard companies fall into this category and so does Google. (Plus TV companies using independently produced programs and newspapers using freelance copy only license rather than own the content).
For Google to become a media owner is no change at all. But for Google to start owning the content (aside from the search results which is a special case) would be quite a big shift. You are right that it could cause some interesting challenges since they would then be competing with many (but not all) of their customers.
There are still big differences between Google and the traditional media owners and it is actually to Google’s advantage. They don’t have to have reporter’s staff on hand or pay for printing but they benefit from the newspaper’s hard work by linking to the stories via Google News. The end result is a better product, in my opinion. Why limit yourself to just one paper (by visiting that paper’s website) when you can theoretically pull the best stories from many of them and read the cream that floats to the top?
As for Google Finance, I think it is a step in the right direction. The chart interactivity alone is intriguing. Just the other day I was trying to get a particular time view of a stock on Yahoo finance and was frustrated having to choose between the several year parameters. Google addressed this problem. They have an interesting trend of finding some seemingly simple technological solutions to old problems, hooking the user, and then refining and adding… it grows on you. Old media should definitely be wary.
Of course there are big differences between Google and traditional media owners. There are also big differences between Crikey and the Nine Network. But they’re both still media companies.
I think Google would do well to consider if a service like Google Finance is worth the potential grief. Reportedly, it started as a 20 per cent project. My understanding of 20 per cent project is that they’re meant to be related to Google’s core business. NO WAY
Good site!!!