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.