Android as a moat protecting Google’s (advertising) castle; “advisor-tising” and the Infovalet

InfoValet mark

Infovalet mark

We exchange email yesterday with my CircLabs Inc. colleague, Jeff Vander Clute, about a blog post written by venture capitalist Bill Gurley. Gurley’s post  (LINK) argues that Google is giving away the Android operating system — and many things around it — because no one can compete with free and the mass adoption of these free services is making Google’s advertising business unassailable.

Vander Clute remarked about Gurley’s thesis:

Fascinating points leading up to the legal destruction of wealth. It stands  to reason that the marginal cost of software development going to zero in the  long run means upside going to zero. Entrenched players for whom software > development is cheap or a byproduct can choose to give away a version of  *your* product for free or less than free.

Right. So one begins to realize this essential truth — Google is neither a technology company, nor a search company. It has become a marketing company. Currently its business is the selling of advertising. It didn’t start out that way. It started out intending the organize the world’s information and make it useful and accessible. But now Wall Street expects it to feed its advertising juggernaut first.

For the advertising to remain effective, Google is going to have to learn more and more about us. The looming battle: On what terms does it learn about us and operate in what I’ve begun to call the “advisor-tising” space? For Google the engineering and software — Android, maps, apps, wallets — is now focused on drawing more and more of us in, and learning more and more about us, so that we can be better and better packaged and presented to people who want to sell us something.

At least in the world I come from, there is the intention to provide a service — civic information — that rides atop advertising and is served by it rather than vice versa. At least that’s been an aspiration for the news industry and the continuing focus of its best thinkers.

The good news: Gradually, Google — and Facebook — are going to figure out that being the “infovalet” requires a new kind of trust relationship with the user if you want to remain their most-favored agent. And that will involve providing something of value beyond a lot of free, ad-supported services. How about news? Google has for now one of the must trusted and recognized brands in the world. It will need to adopt the role of infovalet to keep that enviable position.

Figuring out that relationship is the next phase of the web and what fascinates me and why I crafted our RJI white paper as “Paper to Persona.” And it’s a playing field where news organizations have strength — if they can just learn to use technology as adroitly and innovatively as do Facebook, Google and Amazon.

About these ads

One response to “Android as a moat protecting Google’s (advertising) castle; “advisor-tising” and the Infovalet

  1. You wrote:

    “At least in the world I come from, there is the intention to provide a service — civic information — that rides atop advertising and is served by it rather than vice versa.”

    I wish it were so, but I truly don’t believe that there are many large, mainstream news organizations being run with this ethos anymore. The reporters in the newsroom may feel that way, but they are increasingly not the ones driving the bus.

    The same demands that Wall Street makes of Google, it makes of publicly held news companies. And just as these demands have shaped and changed Google’s business, they have shaped and changed news companies’ business as well. There’s no line on a profit and loss statement for providing civic information or inciting the passage of a new law or bringing an unethical politician to justice.

    I’m actually reading a book right now that traces the gradual change that has befallen news companies from a time before the Internet and any other disruptive technologies: http://www.amazon.com/Read-All-About-James-Squires/dp/0812921011

    In short, I think it only fair to look at our business with the same critical eye that we turn on Google, Facebook, etc. If we are truly committed to continuing our role as civic information providers above all else, we have to be honest about whether that’s still the goal and if it is demonstrated by news organizations in their actions, not in their words.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s