Google's run is more than half done

Google's run is more than half done

Summary: Skrentablog argues effectively that Google has won the war of the "third age of computing." But the critical point is that the value of dominance has a shorter half-life than ever before.

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TOPICS: Google
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Skrentablog welcomes our new insect overlords from Google, arguing that the company has won the battle for market dominance in the "third age of computing." Google has, according to this thinking, and it is compelling, become the environment in which all other companies must compete because it enjoys a 10 billion-to-one "fan-out effect." In other words, because Google links everywhere,Google has a year or two of dominance left. it is the starting point for almost all Net usage.

But I want to point to an important fact that Skrentablog doesn't address, even though it raises the question in the first few lines of a long, worthwhile posting:

IBM                1950-1980
Microsoft       1984-1998
Google           2001-

What stands out in those dates?  IBM enjoyed 30 years of dominance. Microsoft 14 years. That suggests that the half-life of the value of market dominance is falling by more than 50 percent in each "age" of computing. Extrapolating from that trend, if we can call it that based on only two ages of computing, Google in 2007 has a year or two of dominance left. 

And, I think, it is reasonable to say this contraction of the dominance cycle is real, as computing is the continuation of earlier information ages that have lasted roughly half as long as the preceding ones: Bureaucratic management and storage of information (approximately 100 years, from 1850 to 1950); printing (1500 to 1900); scribal recording networks maintained by church and mosque (600 to 1450).

Today's high CPMs at Google—Skrentablog's are suspiciously high based on my analysis of Google's business, though John Battelle affirms them—are not evidence of a sustainable model, as all previous forms of advertising have shown. The only thing CPMs do is shrink. In Google's case, I suspect that some CPM inflation is due to defensive purchasing of keywords by brands seeking to usurp competitors attempting to hijack interest by searchers, a phenomenon that could have drastic consequences if the spell of search marketing shows any cracks.

Skrentablog also points to low switching costs as evidence that Google will continue to grow market share beyond today's alleged 70 percent to 80 percent of searches. This is also a reason that Google must spend more to acquire additional traffic according to New Lanchester Strategy, an intriguing approach to understanding the dynamics of monopoly and competition. It is very hard to acquire more than 83 percent of a market without experiencing skyrocketing costs of customer acquisition. In Google's case, those costs might include having to buy upstart competitors that, facing very low costs of entry in a vertical search category, start to hive off Google's most valuable traffic.

Google's time is shorter than anyone is ready to acknowledge, as everyone is too busy trying to figure out how to profit from working with Google. That's the wrong place to be focused, if you want to build your business on stable ground.

As I mentioned the other day, feel free to ring me up on Skype (godsdog is the handle) to discuss in a podcast. (I'd give you a direct link, but ZD's blog platform breaks Skype tags.) 

[poll id=10]

Topic: Google

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55 comments
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  • nonsense

    Of course the thing about the web is that any competitor can hook up to the web and challenge google.
    But then like Microsoft, and Playstation, it's hard to dislodge a Corporation from a product area unless you have some clear advantage.

    I'm not really clear what the author thinks "dominance" is. Both IBM and Microsoft are massive corporations making huge profits. Google is smaller, but still pretty big.

    If the "end of Google's Run" just consists of slowing up a bit and gradually growing profit and turnover (as with IBM and Microsoft), then I guess the author is just talking about a Rising Star becoming a cash cow.

    Maybe something new and great will take over. But then maybe Google will drive the new and great thing.
    There isn't much evidence presented, and the trend extrapolation has to be some kind of joke. I found it funny anyway.
    stevey_d
  • Microsoft enjoyed 14 years of dominance

    Well I think Microsoft is still enjoying it's dominance(much to my dislikes, but thats another story) it still has over 90% of the desktops ???? And it has a very good share of servers in the data center. And with 50 Billion or more in the bank. I think you need to re think the dominance thing at least for Microsoft.
    mrlinux
    • Yes, what happened in 1998...

      ... that marked the end of Microsoft's dominance? W98 didn't have the same success as W95 in public acclaim, or whatever that was, but W98se continued to be acceptable for some time.

      And then there are the Office editions after 1997 and the growth in Microsoft server sales, as you wrote.

      So what ended in 1998 that was disruptive to Microsoft's ascent?
      Anton Philidor
  • Garbage in Garbage out

    So from two data points you predict the future? Your ligc and your conclusions are faulty at best and really bad judgement at the worst.
    Bill Drew
  • Google Run half gone?

    Gee I hope so! Look, it's the dominant search engine only because it delivers so much in response to a query.

    But, that is also it's achilles heel...

    If I am looking for downloads of a demo version of C/Atlas (software) I don't want to have to wade through 100 pages of Geography stuff not knowing if what I am looking for is even there!

    Give me a Search Engine as pervasive as Google **with** "targetting" ability... Then, Google's clock will restart.

    Mike Sr.
    madrucke@...
    • Search w/ targeting ... it's coming...(nt)

      nt
      kckn4fun
  • Story is too fuzzy

    The story is too fuzzy - how do you define "dominance" - and why do you think Microsoft's ended in 1998?

    "And, I think, it is reasonable to say this contraction of the dominance cycle is real"

    Okay, why do you think it's real? Do you have some sort of quantitative method of measurement for this concept?

    Otherwise, this story is simply a lot of words that don't really mean very much.
    CobraA1
    • No Not Warm and fuzzy feeling here.

      Yes, it would seem all warm and fuzzy but for some reason this is not the feeling I?m getting, if Mitch is perhaps off the mark with this one.
      Lucky7Star
  • I'll second and extend that...

    I'll second that motion... seems like you have a good idea here, although, I would extend MS's dominance period a little bit longer, I mean, c'mon, what do most desktops run these days?

    Anyway, I gotta admit I'm building a technology that will hopefully blow the socks off of the likes of Google, MSN, AOL, Ask, Yahoo and all those other search engines that rely on a flawed infrastructure... oh well, maybe I'll fail too, but either way, I do agree on this pattern.
    kckn4fun
  • I agree (with the wrongful stats)

    Sounds like something an eternal "liberal" mind would come up with. Like polls taken from a "select few" and propagated through the masess as something on the order of the Holy Grail.
    Google has the market share right now, and until some new web-feature takes off, they'll still dominate. And when something new does open up? Who's to say Google won't be on top of that, too? (If not actually coming up with it, themselves?)
    Poor jounalism, at it's best.
    (But that doesn't suprise me, anymore)
    mark@...
  • I agree with the others....rubbish story!

    This was a nice read of fiction but thats about it!!

    A badly researched load of words at best!
    usrhlp
  • Really stupid theory #43

    slow news day huh?
    Reverend MacFellow
  • Must be trollin.

    This article has to be a troll for feedback. "Hey, come look at the asinine story they put on ZDNet".

    Not only predicting a trend from 2 data points but even the 2 points are a fiction.

    You guys have any editors?
    Kevin Derby
    • Re: Must be Trolling & Nonsense

      I have to agree. This story must be a crock of ..... More holes than Swiss Cheese and about as much substance as a can of air from SpaceBalls the movie.

      Problems with this thing...

      1. Assumptions that both IBM & Miscrosoft have lost their dominance in their respective markets. Microsoft still has dominance in its core markets, it just hasn't been as successfully dominating new markets it's been going into (i.e. ZUNE), but has been gaining in others (i.e. Xbox 360 is doing very well). Sure, it's lost some share to other OS's and browsers but still is the dominant player, and is expected to be for the next several years minimum.

      2. IBM. Now here's a compnay that DID began to lose heavy marketshare, but turned itself around in the 1990's and still does well today. Sure, they are no longer the domimant player they once were, but they are still doing very well.

      3. Google.... Google is being very smart to expand to other markets since they don't want to have all their eggs in one basket. Unlike Microsoft however, they are succeeding very nicely in new developing markets, using the old Microsoft/Diseny approach. If you can't beat a product, buy it out (i.e. YouTube over Google Video). They are much more in tune with their customers though and aggressive on customer feedback and NOT staying stagnant in any area. This desire to meet customer demand and respond aggresively to customer feedback continues to be a strength for them which maintains them in the postive view of the majority. Postive view is a HUGE asset, becuase as soon as you are no longer deemed the "Postive view" player, people look for an alterantive underdog just to dethrone you. Microsoft is a good example of this, and why Firefox has gained market share, becuase despite it's dominance, Microsoft still has many poeple looking for a better alternative. In the case of Google, Google typically IS the best in it's market, and continue to foster positive influence, which maintains loyalty and fortifies it's position and crossover to other markets.

      Ok... That all said. basing Google's success on 2 companies is just plain silly. You would substanially more histroical data to even remotely hold up your claim, AND... IBM is a completely different kind of company than Google.

      I can VERY EASILY show you companies that have been and continue to be dominant players in their field by adapting to market crossover the same way Google does.

      But alas.. no need, I think my point (and everyone else's) is well made enough.

      PLEASE tell us this post was a joke or just written to get a ris out of the readers, else there's something really wrong with the quality of this post.

      Adam
      ageffner
  • Googles Run

    You may be right butGoogle may be some longer when you consider Western Union was THE communications company in the 19th century and ATT was in the 20th century until the government took it down.
    nimbus3
  • Nonsense!

    "Dominance" is what you make it. IBM had not lost it by 1980 and Microsoft had
    not achieved it by 1984 - thought the writing was on the wall for those with the
    vision (or hindsight) to see. Microsoft has not yet lost its dominance today,
    although its clear that Google has gained a strong enough position to claim it has
    gained a share. I expect Microsoft will be able to claim [b]20[/b] years of
    dominance, giving Google a predicted dozen+. While things are looking bleak for
    MS right now - with their Zune (junk) up against Apple's iPod and their Vista
    (same-ol, same-ol) against Linux and OSX - they are far from dead in the water
    and could linger as a solid force just as a very healthy IBM has.
    [br]
    Who'd have thought [b]I[/b] would ever defend Microsoft?
    [br]
    DLMeyer - the Voice of [url=http://glhorton.podomatic.com] G.L.Horton's Stage
    Page [/url]
    dlmeyer@...
  • Google's run is more than half done

    I tried Google once.
    I tried Yahoo once.
    Their lifes are over in my book.
    johnydii
  • google's dominance limited??

    It is an interesting reflection. Realistically consider that IBM is still a dominating force even though they no longer lead. Many Pc companies predicted their demise but where are those companies today (Compaq)? Similarly Microsoft is still lead dog even though linux is making inroads. No doubt a new presence will dominate at some future date but the old dogs will have plenty of muscle for the forseeable future. The more things change the more they remain the same. New markets will create new opportunities.
    fjtr
  • I Agree!! this link proves it!

    Thanks for the article. Just today this article on a the first Web 3.0 system got released that proves the Google run may be shorter than anyone thinks.

    http://www.theserverside.com/discussions/thread.tss?thread_id=43688

    Regards,
    Tony
    adanecito@...
  • 2 is not statistically worth anything.

    Taking only 2 iterations of IT dominance by companies is not enough to draw a statistical conclusion. You'd need at least a century of data to draw anything worthwhile. Again ZD is paying too much for columnists.
    Narg