Google: WalMart Type Margins Good Enough?
April 18, 2012
For the most part, we all know that Walmart dominated the retail world by cutting or buying out the competition. For several decades they cornered the market with low pricing and an overabundance of locations, weeding out the mom and pop stores of the past.
In the article Asymco: Google makes only $1.70 a year per Android device – Apple 2.0 – Fortune Tech, we can see a very similar comparison between Walmart and Google, where domination and control of specific markets seems to be the approach instead of producing reliable products.
“We have a significant breakthrough in understanding the economics of Android and the overall mobile platform strategy of Google.
P&L considerations were not the only (or even at all) factors in investment for Google,” Dediu writes. “Having a hedge against hegemony of potential rivals, having a means to learn and develop new business and having a role in defining the post-PC computing paradigm is all probably bigger considerations than profitability.”
In the end, you get what you pay for and people are starting to rediscover that philosophy. Issues will eventually arise when companies replace the value of their products and people with their desire for growth and power. Is Google less about becoming Microsoft and more about emulating WalMart? If so, Amazon is a competitor to think about, as WalMart is becoming a yesterday business.
Jennifer Shockley, April 19, 2012
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