Productivity applications tower over search's role in generating new revenues

Productivity applications tower over search's role in generating new revenues

Summary: It would make Google's current revenue model highly extensible beyond search, and remake the multi-billion-dollar business-to-business advertising and direct marketing industries.

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TOPICS: Browser
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So the WSJ says the AOL-MSN talks continue over which search engine will ultimately support the massive AOL/Time Warner user base. Web portal executives pooh-pooh Google's chances of rapid advancement outside of search. Crystal ball gazers the world over are still trying to figure out what the Sun-Google snuggle earlier this week amounts to, or not. And long after the eBay-Skype deal, countless heads continue to be scratched.

What's more, the Web 2.0 conference added 40,000 watts to the building amplification that, yes, something really is up these days. The press frenzy prior to the snuggle was further evidence that Next Big Things are in motion, but damned if anyone really knows just what and just how. The press can smell a good story long before the facts gel, unless apparently it has to do with WMD.

Yes, the gathering momentum around the next big thing is palpable. But comments from Yahoo!'s CEO Terry Semel and InterActiveCorp's CEO Barry Diller were the tip off to me this week that the hype around Google should in no way be under-valued. There was something in the posture of the comments that smelled of ... fear. And that's because of the truly momentous opportunity that now exists to wrench away from Microsoft the pernicious iron grip and selfish stagnation that Redmond has visited upon personal productivity applications for lo these last 12 years.

The gathering promise, and, yes, fear, is that Google -- using the best utility computing grid and fiber network money can buy, AJAX, Java, open XML formats, $91 billion in market cap, the attention of the world, open source applications code, and the best little Googleplex of highly motivated engineers -- might actually have a chance at changing the game on personal and baseline business productivity applications.

Because if even just a handful of baseline productivity application functions -- word processing, email, calendar, VOIP telephony, spread sheet, presentation graphics -- can be sourced as services from the Web instead of objects from the local or NOS hard drives, then the proverbial finger has been removed from the dike. Once these services are freed to the Web then the trick of context that Google mastered with search can be applied to business and personal commerce processes and communications. And we get a new revenue model for supporting IT and communications.

So it's not about the location of the server, or the bandwidth, or PC's waist line, or the operating system, or the object model. It's about the revenue model. When productivity applications as functional service components become free and reliable ... When users and IT executives recognize that they can trust these services to run baseline applications logic while protecting their data and privacy ... When users and their bosses trust the services provider enough to trade a very slim amount of information back from the user to the services provider on the nature (not details or data) of the action at hand -- then:
  • Just as with search today, when the services provider such as Google knows a little bit about what the user is up to as documents are created and communicated it can match that action contextually to myriad valuable information and services on the fly. And the provider can charge handsomely for the privilege of matching up workers as buyers and related business services as sellers, and do it highly efficiently, on a global scale.
  • Microsoft's revenues go down, the total cost of IT to the users goes down, and the way that businesses reach out to each other with business services and value goes way up. That's because if these types of transitions happen, and the new revenue model gains traction to move toward mainstream, there is less reason to keep paying Microsoft for Office renewal licenses. The new revenue model subverts the old.

Just as Google can well afford to provide trusted, reliable search for free in exchange for charging businesses for placement of contextually relevant and mostly welcomed ads and links, imagine the search model in the context of business activities. I create a document as an invoice, and I see unobtrusive links to bill collectors, certified email delivery services, updates to my accounting software, and an online MBA course. I create a spreadsheet to analyze my quarterly earnings, and I see unobtrusive links to investment bankers, business loan providers, tax consultants, and an ad for a happy hour two blocks away at 5:30 p.m. sharp.

The model, by the way, also works quite well on the consumer side. In fact the same infrastructure and logic supports both. When I add in my calendar that long-awaited two-week vacation, I get a link to a bathing suit sale, a local dog boarding kennel, and flight insurance.

Now, today when I do a Google search, maybe 10% or 15% of the time am I actually shopping; that is, looking for related information that I will act on with my wallet. But when I use my business productivity applications I'm almost always doing business, and I may even more frequently welcome more information on helping me to do work and run my business or P&L faster, better, and cheaper. If you give me free applications and match associated relevant services to my activities that I find even modestly valuable and unobtrusive, I will partake. Small and medium businesses should even find this compelling, as they waste less time seeking out the services they need. The services, in effect, find them.

And should -- and I grant you there are lot of ifs in here -- this model even unseat 10% of Microsoft's Office licenses of 400 million users -- then we have a whole new ball game. It would make Google's current revenue model highly extensible beyond search, and remake the multi-billion-dollar business-to-business advertising and direct marketing industries. eBay might be in a position to pickup some of this revenue too, but Yahoo! or AOL? I'm not so sure. Microsoft could certainly get in the game, but at what cost to its current business?

Topic: Browser

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14 comments
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  • Hilarious or aggravating?

    So my productivity applications would be showing me ads based on a third party's reading of what I'm doing at any given time.

    Quoting:
    I create a document as an invoice, and I see unobtrusive links to bill collectors, certified email delivery services, updates to my accounting software, and an online MBA course. I create a spreadsheet to analyze my quarterly earnings, and I see unobtrusive links to investment bankers, business loan providers, tax consultants, and an ad for a happy hour two blocks away at 5:30 p.m. sharp.

    So, am I angry that my confidential document is being read?
    Do I think ads on a spreadsheet are so stupid an idea that I laugh indulgently?

    Do I keep the software after the first ad I see?

    That last question I can answer: No.
    Anton Philidor
    • got to disagree

      Eudora has used little ads to pay the cost of providing a "free" version of their email client for years.

      Not only are the ads not annoying, they are so inobtrusive that if a reminder message didn't pop up occassionaly I would forget I was running in Sponsor Mode rather than Registered Mode.

      Bjorn A Freeman
      bjornafreeman@...
      • Opera recently removed its banner.

        That must be intended to gain greater distribution.

        FlashGet, a download manager, has ads with the trial version. Some people were so aggrieved they had the trial version classified as spyware in the database Microsoft maintains.

        Watch the comments - and download counts - on ZDNet downloads when some free software becomes adware.

        Including advertising can be a significant problem for acceptance.
        Anton Philidor
    • Out of Context

      You should also quote:

      "Just as Google can well afford to provide trusted, reliable search for free in exchange for charging businesses for placement of contextually relevant and mostly welcomed ads and links, imagine the search model in the context of business activities."

      from the first sentence of the same paragraph. They can determine a "doc-type" from template useage (templates are a no-brainer, even M$ uses them) in a very unobtrusive fashion - without reading your "confidential document" contents.

      If they can truly do the trusted/reliable part, they can have my eyeballs. You keep giving your money to M$ - I'm sure Bill will appreciate it.
      nottheusual1
      • If the content of the ads...

        ... is to be related to the content of the documents, which is the basis for the revenue model discussed, then Google would be "reading" the content of the documents. QED.
        Anton Philidor
    • Agree with your answer

      No.

      No, not hilarious.

      No, not aggravating.
      IT_User
      • Won't happen anyway.

        Business functions paid for by ads?
        A search company deciding to compete with Microsoft in its core business?

        Would you as a shareholder consider this the best use of your money?

        Whence the market cap?
        Anton Philidor
    • Sooooo - Keep your..

      MS products (or whatever else you use) and be happy. This sounds like one hell of a technology to me.

      I have always maintained that running your apps on the server side are much easier to maintain and give you a lot better versitility.

      BTW - MS has been doing some of this for a long time. It is called "Terminal Services". I have several clients doing this and it works great. So if you pull your apps off a more expensive Terminal Services installation and move it to a less expensive JVM, who cares????

      Like my customers always say - As long as it works.
      djc1309@...
  • Missing the Point-To-Point...

    The company that ultimately "cleans up" will be the one that provides the UNDERLYING technology needed to enable ANY of these companies to provide online apps that work seamlessly, in real-time over the web.

    To all of you Web2.0 "next Bill Gates" wanna-be's, jump on and read fully this U.S. Patent:

    http://www.6324586.com

    Don't say I didn't warn you!
    DenverGEEKS
    • hmmm . . .

      Here's the real link to the real patent:

      http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=/netahtml/srchnum.htm&r=1&f=G&l=50&s1=6,324,586.WKU.&OS=PN/6,324,586&RS=PN/6,324,586

      But it appears to be the same.

      In any case, I don't see how this patent will make much of a difference for most apps, as it's only about syncronizing time.

      Besides, I don't think there's much chance it will hold up to scrutiny. It'll probably fall the first time it's contested.
      CobraA1
  • Sounds Like mid-90s and The Minority Report

    I'm not one to criticize GOOGs scalable revenue model....but this sounds like Minority Report (if you ever saw the movie) where advertisers profile you based on iris-scanning and market to you.....personally by talking to you etc. It was also very, very annoying. WATCHING it was annoying, much less living it.

    It also sounds like alot of business models we heard about in the early 90s.

    Keep the dream alive, I guess.

    Isaac Garcia
    http://www.centraldesktop.com/
    isaac@...
  • Privacy

    I personally don't mind giving out my usage statistics or other similar information if it is used to increase my productivity. Even with software packages that ask me to if I will allow a report of an error when a program crashes to be sent to the manufacturer of the software, I always allow it. If it will help the manufacturer make better or more stable software, I think it's a good thing. I really don't understand why anyone would be against that. However, that's me. And unfortunately, from what I have seen, most people are not like that. Most people don't want ANY information, no matter how vague or unidentifiable it is, to be sent to anyone. I never understood this but that's how (in my opinion) most people are. So I really don't think this will be accepted positively by end users.
    fabricio
  • Services

    As one of your colleagues has already said - TRY a web app and then try and beat it up.

    The concept of putting my business on the Web makes me shudder. The closest I get to this nightmare is when all the power goes out and no-one can do any work. It's not enough to say that Google is up most of the time - it may not be google, it may be your machine/network/router/ISP/Internet problem and yes it does happen - not frequently. but frequently enough for me to be able to see disaster looming.

    If you suddenly have no access to your e-mail, documents, data and whatever other material you are foolish enough to keep on the web, then the ideal of Web services may pale a little. I won't even touch on business confidentiality etc.

    Some people may be able to get by on Webmail and some Web-based group productivity suite, but I prefer to leave the Web for research and for the few apps on it that I use - Google of course and Google Earth Pro - gee guess what? Google Earth is a local app. It may consume web services, but it sure aint running off the Web.

    And then there's the interface - even assuming we limit it to IE, most Web-based services suck. Slow, non-standard and trapped within a browser.

    This doesn't mean that a lot of people mightn't benefit from Web-based services - as long as they are not too critical. I use my Gmail for extra back up of important documents - but I don't rely on it.

    People also want to extrapolate from a few Web services (and yes I did try some of the available ones) that offer convenience, to a revolution of the desktop. My perspective is from someone who does a lot of graphics, video and audio editing as well as designing eLearning. Do I want a Web-based graphic program or video editor? - no. Even if I want to design a website - I'm going to do it on my local machine and server or at least with Front Page or Dreamweaver doing the grunt work on my local computer.

    So I do believe that Web-based services will continue to expand, but for serious and business users, putting all your eggs into one basket or in this case a somewhat fragile link to the Web is crazy.
    TonyMcS
  • How I can get recognised?

    I've been developing AJAX applications for the last five years. People tell me I have the most advanced web application on the planet, yet it gets constantly ignored. If I had had the funding the startups are getting now when I started I could have completely redefined this market.

    Convea is far more than an AJAX web application, it's an entire web application framework, it's almost a WebOS, so far ahead of anything that's available.

    We've been told in the years gone by that our software was just ahead of it's time, so if now IS the time then is anyone going to at least mention Convea along with it's peers?

    We're are wanting to do so much here, this visions are absolutely wonderful but we've essentially stalled for last two years trying to build products that are easy to digest- nobody understand a platform they want a solution. The shame is that with a platform you interest developers and suddenly you really do have a WebOS anyone can drop into and access super-lightweight rich web applications anywhere. It's the most exciting and the reason we've stuck it out for the last five years on zero budget.

    Somebody, please! Say hell to Convea! http://www.convea.com
    alanc5