October 12th, 2009
The key to understanding Google - CEO admits it is a media company
For a long time I’ve been saying that Google (GOOG) is a media company. For a long time people have been telling me I’m wrong that, “Google is a tech company.”
But what technology can you buy from Google? You can buy a database from Oracle, you can buy microprocessors from Intel. What tech can you buy from Google? (OK, a search appliance box but that’s it.)
Erik Schonfeld writes about Ken Auletta’s forthcoming book: “Googled: The End Of The World As We Know It.”
He quotes from a pre-publication copy in a post titled - Googled: Schmidt Wants To Build A “$100 Billion Media Company”:
In 2007, Eric Schmidt told me that one day Google could become a hundred-billion-dollar media company—more than twice the size of Time Warner, the Walt Disney Company, or News Corporation.
Foremski’s Take: Google, Yahoo, EBay, Facebook, and a host of Web 2.0 companies, and many more, are all media companies. They publish pages of content with advertising around it.
What’s not a media company about that?
These are technology-enabled media companies. They are not tech companies.
Silicon Valley has transformed into a Media Valley and its media companies are doing far better than the traditional media companies such as those in New York, where Conde Nast continues to close magazines.
Google uses technologies to harvest content for free and then serve up ads around that content. It doesn’t want to produce content or pay for content if it can help it, although it does pay for some content on YouTube.
The key to understanding Google is that it’s a media company. It’s a (very highly) technology enabled media company.
It’s jumped to the next level of media companies — it’s already ditched the content creators knowing it can get the content for free (mostly). It will only use technologies to assemble and publish the content and advertising. That’s the key to understanding Google’s success.
What is interesting about the quote from Mr Schmidt is that over the past few years Google hasn’t wanted to portray itself as a media company because it hasn’t wanted to appear as a competitor to media companies. Especially, when it has partnered with them using its AdSense ad network. But most media companies have figured it out by now and see Google as a competitor.
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Please see: “Google Devalues Everything It Touches” - Wall Street Journal Chief
Tom Foremski reports on the business and culture of Silicon Valley at the intersection of technology and media. He also writes at Silicon Valley Watcher. See his full profile and disclosure of his industry affiliations.
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