eWEEK content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
Dallas Mavericks owner and high-tech market pundit Mark Cuban posted an interesting piece this weekend on businesses that offer users content for free. It’s a timely piece, given the furor over Wired Editor in Chief Chris Anderson’s new book “Free: The Future of a Radical Price.“
Basically, Cuban argues that those successful companies that provide free content face incredible pressure from all fronts. They get successful and then get bloated because they add more people and infrastructure to make more money to keep offering users free services.
Then they get even bigger and have to make even more money to sustain themselves. Along the way, these businesses tend to lose sight of innovation, or stop innovating and get their asses handed to them by a more evolved but no less free player.
Yes, Cuban uses Google, which makes $15 billion to $20 billion a year in online advertising sales from providing search and Web services for free, as one of the examples. Cuban wrote:
“For Google, who lives and dies by free, we dont (sic) know who their Black Swan company will be. But we all know it will happen don’t we? The only question is when. Of course Google knows it as well. Which is exactly why they invest in everything and anything they possibly can that they believe can create another business they can depend on in the future. They are spending incredible amounts of money in search of the “next big Google thing.” When their Black Swan competitor appears, they won’t be in a position to compete with the newly presented model, particularly if its free based because their ecosystem has bloated to the point where they can no longer create anything for free.“
Of course, those who have been reading this blog know I agree with Cuban’s rationale about why Google has its fingers in so many other Web services pies. I’ve often referred to this phenomenon as Google’s need to feed the machine.
Google’s search ad belly has gotten so big that the company must sustain itself somehow, which is why we’ve seen Google create Google Apps, Android, Chrome and several other Web services. Greed is good.
The company’s vaunted search engine programmers have hardly stopped innovating; they are pumping out new features with regularity. But let’s face it, tag clouds in Google Book Search and RSS feeds in Google Blog Search aren’t directly going to help the company make the money it needs for sustenance.
At best, such features will keep Google from losing users and ad clicks to upstarts. These actions are routine maintenance, not innovation. So in come Google Apps, Android, things like OpenSocial and Friend Connect.
Not unlike Google’s search engine itself, Google is crawling through the high-tech market, searching for the next big thing that will keep them being the It company.
Cuban argues that Google’s demise is inevitable and advises the company to recognize when its Black Swan appears on the horizon and sell out before it’s too late to make as much cash as possible. Spoken like a true business investor or ship captain; Cuban wears both hats.
I have mixed feelings here. The practical side of me says Cuban is correct, that nothing lasts forever and that Google and its free Web services will get snuffed like so many others. It may take five years, or 10 years, but there may well be a world without Google, though I can’t imagine it.
Indeed, as a consumer of Google Web services, this logic sickens me. If Google were to die, it would be like Coca-Cola folding and ceding its guarded formula to some brash newcomer. It would take me awhile to get over it.
So, have we seen Google’s Black Swan, as Cuban calls it? I don’t believe so. Some thought it might be Facebook, but I’m not convinced people will forgo Google to live wholly in Facebook.
The social network is growing rapidly, but I’m not sure what the company might do to keep people living in its walled garden in totality. I love Facebook, but we still need Google because we still want to Google.
Facebook won’t squash Google anymore than Twitter will squash Facebook. Sure, we love to tweet, but there are things that we like to do in Facebook that we can’t do on Twitter, including play with other cool apps and host video, events and other content.
Could Google’s Black Swan be Microsoft’s Bing search engine? I’m serious. Who is to say the Bing team won’t stumble upon something that users love but didn’t know they needed until it was given to them?
This would be something that we haven’t seen yet from Google, some profound game changer. Perhaps the Bing team will create some amazingly needful and necessary semantic or Deep Web search construct that delivers something Google can’t. Bing has already shown a willingness to let users search for Twitter tweets, something Google doesn’t yet do.
What if Bing finds the next big search tool and throws millions of dollars into it? There’s no question Google would be in trouble. Other than that, I don’t see current real-time search engines, Wolfram Alpha or anything out there bowling over the Google search engine Gobbler.