'You're F**king With The Magic'

I enjoyed this Economist review of Ken Auletta's book, 'Googled: The End of the World as We Know It'. It highlights one particularly memorable line that sums up that world view where companies choose to ignore the implications of change in their marketplace and hold on tightly to creaking business models. Unfortunately, such determination to retain the cosy 'magic' of the status quo can open the door to a disruptive player like Google or Apple.  "Sometimes it seems as if Google has never come across an industry it doesn’t want to disrupt. Best known for its hugely popular search engine, the internet giant has spread its tentacles into an ever-growing array of businesses, including advertising, telecoms and, most recently, digital-navigation software. The company’s habit of selling services cheaply or giving them away for free has endeared it to consumers. But its tactics have enraged competitors, who complain their new rival is out to destroy the economics of entire industries.  Such griping has been loudest in the worlds of publishing and entertainment. Although media companies are hooked on the money they mint via adverts that run on Google and its YouTube video-streaming business, many of them also accuse the search firm of commoditising their content and of undermining their profits by making it easy for marketers to track the effectiveness of online ad spend. 'You’re fucking with the magic,' says the boss of one big media company to Google’s founders in a memorable scene recounted at the start of Ken Auletta’s new book."

Comments

[Jason]

James, it isn't just Google that is taking apart old business models. Its progress. And we are just touching the tip of the iceberg, which will be revealed more and more over the next 10 to 15 years. Here are my thoughts. http://bit.ly/5HbMof

Jason

[James Cherkoff]

Thanks Jason, I'll take a look...

[Brad Bell]

James - perhaps you'll enjoy Aaron Swartz's take on the book:

Googling for Sociopaths
http://www.aaronsw.com/weblog/googled

[James Cherkoff]

Hey thanks Brad, I'll put it on my list for '10. HNY to you... ;-)

[Rich Sands]

James, you're right on. Google doesn't think of themselves as competing with books, music, maps, etc. - they compete in the search advertising business. So their embrace of open source development including "free" as the price of their non-advertising platform elements fits with their strategy. It feels like competition to anyone who is trying to sell what they're giving away for free, however. More of my thoughts at http://rsandsconsulting.com/2009/12/23/more-google-the-tao-of-open/

Rich

[James Cherkoff]

Thanks Rich, that's an interesting summary...I'll take a look.