Google and Its Approach to Strategic Action
January 2, 2010
A happy quack to the reader who lives in the sunny Mediterranean basin for a link to “What’s Strategic for Google?” I sure did not know, and I found the comments in Chris Dixon’s blog interesting. The main points are ones that the popular pundits track like a Kentucky hound after a squirrel: Google buys companies and Google makes most of its money from advertising. The key point in the write up is expressed in this statement:
A project is strategic for Google if it affects what sits between the person clicking on an ad and the company paying for the ad.
The article then goes through a “Google stack” which consists of the components of Google between a “human” (essentially a user) and money. Mr. Dixon then asserts:
At each layer, Google either wants to dominate it or commoditize it.
When I read this piece, several thoughts crossed my mind:
- The patent documents which I have reviewed do not support a tactical view of Google’s strategic actions. In fact, some of these documents and their related technical papers focus on technical innovations that are loosely coupled with the Google that generates most of its money from advertising. Today is one thing; tomorrow at Google is another. I think there is a significant risk to look at Google in terms of advertising, based on my research.
- The argument seems oddly disconnected from the prescient analysis of domain evolution expressed in “The Nature of Technology”. The fact that monetization via advertising or some other direct means is the way to analyze Google’s strategic moves ignores some of the other and more “meta” aspects of what Google’s imperatives are. In fact, some of these imperatives are beyond the control of Google’s management in certain cases.
- The Wall Street and journalistic approach to Google looks at one factor: money. That’s a useful perspective if one has a single tool like a hammer. Google operates more like the broad concept of Henry Ford for a single, integrated manufacturing operation exemplified in his River Rouge construct. What may be strategic to Google is a big idea like Henry Ford’s migrated into a digital construct.
As an addled goose, I will leave it to the reader to determine if one should view Google as a company that defines strategic solely to get money or if Google is breaking new ground and money is simply a side product.
Stephen E. Arnold, January 2, 2009
A freebie. My goodness with Europe and the US governments closed to celebrate the month of that two sided dude Janus, to whom do I report. I will officially alert the most amenable Helsinki Commission (Commission on Security and Cooperation in Europe).
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