Google and the Open Source Card
August 7, 2009
Digital video is a high stakes game and only high rollers can play. Hulu.com has the backing of several motivated outfits with deep pockets. Smaller video sites are interesting but the punishing costs associated with dense bit media are going to be too much for most of these companies over the next couple of years.
Google is committed to video. A big chunk of the under 40 crowd love to fiddle with, wallow in, and learn via video. I don’t, but that does not make any difference whatsoever.
There are two different views of the Google acquisition of On2’s video compression technology. On one side of the fence is a traditional media company, the Guardian newspaper. You can read “Google Buy Up Will Help Cut YouTube Costs.” The idea is that Google is not making money via YouTube.com. Therefore, the all-stock deal worth about $110 million gets Google some compression technology that will reduce bandwidth costs and deliver other efficiencies. The On2 technology also has the potential to give Google an edge in video quality. This is an AP story, so I don’t want to quote from the item. I do want to point out that this on the surface seems like a really great analysis.
On the other side of the fence is the viewpoint expressed in The Register. Its story “Is Google Spending $106.5 Million to Open Source a Codec”?” is quite different. Cade Metz, a good thinker in the opinion of the goslings here in Harrod’s Creek, wrote:
But if you also consider the company’s so far fruitless efforts to push through a video tag for HTML 5 – the still gestating update to the web’s hypertext markup language – the On2 acquisition looks an awful lot like an effort to solve this browser-maker impasse.
Mr. Metz sees the On2 buy as a way for Google to offer an alternative video codec which sidesteps some issues with H.264 and other beasties in the video jungle.
In my opinion, The Register is closer to the truth that the Guardian. Google is playing an open source trump card. Making open source moves delivers two benefits. The first is the short term solution to the hassle over video standards. Google offers an attractive alternative to the issues described by Mr. Metz. The second advantage is that Google reaps the benefits of contributing to open source in a substantive way.
Open source is a major threat to Microsoft and some other enterprise software vendors. Google is playing a sophisticated game and playing that game well in our opinion. The Register’s story gets it; the Guardian’s story does not.
Stephen Arnold, August 7, 2009
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