Mknac’s Weblog

Diving into the shallow pool of Web 2.0 and Social Media head first!

Are you a Google or a Yahoo?

The Search; How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture” by John Battelle is a book that provides a fascinating look into how Google became the largest media company in the world today. Battelle also provides insights into how search engines work and the differences between major search engines such as Google, Yahoo, MSN, AltaVista and many others.

“The Search” uses numerous examples of people, companies and events that have been transformed along with Google’s rise to the top of the search engine pile. Ultimately the search engine battle I feel boils down to two issues. Which companies can better develop a business model to generate revenue from searches and which companies can provide search results that are closer to your intent.

I’ve always been a Yahoo person myself as my experience is that I’m able to more easily find what I’m looking for on Yahoo rather than Google. Could people be predisposed to a search engine because its algorithms more closely approximate your thinking? Based on the statistics I guess I’m in the minority on this issue as more people use Google than any other search engine. Based on revenue, Google has developed a business model that’s clearly out producing its competitors.

The amount of services that Google provides is incredible. Just to think that a few years ago many of these services that we now rely upon every day didn’t exist. Google is mining our digital clickstream to develop services that they want to provide all covered with ad producing revenue.

Google has certainly achieved many remarkable goals and provided convenient and useful services and programs to its users. I’m not sure if it’s good or bad to have so much market power and information in the hands of one company. Could you argue that Google is a monopoly? I don’t think you’d win that argument at this point.

Although Google may have a “do no evil” ideology they certainly have done evil; whether it was intentional or on purpose is debatable. The old saying “power corrupts and absolute power corrupts absolutely” might be of value here.

Why do we trust Google with this much information about us and control over that information? Is it a matter of time before the ideology of “do no evil” is absolutely corrupted? Only time will tell if Google is able to maintain the trust it has built with its users.

June 18, 2008 Posted by | Uncategorized | , , , , , , , , , , | Leave a comment

“The Long Tail”

I recently read “The Long Tail” by Chris Anderson. In this book Anderson describes an Internet business model that many e-retailers, such as Rhapsody, Itunes, and Amazon, are successfully using. Further the author describes old brick and mortar business models and provides some context and history on the evolution of business models.

I totally agree with Anderson’s ideas. In fact Anderson’s “The Long Tail” explains what I think that I and most others inherently understand about why e-businesses are able to make a profit and provide goods at a lower cost than a brick and mortar store. However there is one key aspect of the long tail I didn’t get until reading “The Long Tail;” volume in the long tail.

The Long TailThe long tail is a statistical curve showing the probability of sales. Rather than looking like a bell shaped curve the long tail is skewed to the left with a declining long tail to the right that never reaches zero. What this means is that although some items aren’t high volume sellers they do sell consistently over time at a low volume. What you lack in individual sales volume you can more than make up for in overall volume of items in the long tail.

If an e-music retailer has hundreds of thousands of songs that sell say 4 times a year that’s significant money as opposed to the current hit of the week. Considering that the digital storage cost of those low purchase songs in the long tail is next to nothing this isa great deal for the e-retailer. A brick and mortar store can’t afford to stock old songs that only sell once a quarter.

The other day, I now realize, I found myself buying a song in the long tail. I was surfing Itunes and came across Frank Sinatra’s “New York, New York.” I thought here’s a great old song so I purchased it. Clearly this song is a niche market in the long tail. Not selling at high volume but selling consistently in the long tail.

The long tail concept can be applied to many other products. I thought that the example of Lulu.com, a book self- publisher, and Amazon’s print-on-demand books intriguing. When somebody buys a book from Lulu or specific Amazon books the digital file is then printed and shipped. The product exists only in digital format until purchased so there are limited storage costs. The company only incurs a cost (printing and distribution to the buyer) when it gains the revenue from the purchase.

I had a long tail epiphany at work today that reading “The Long Tail” made possible. I was looking at trends of my organization’s Intranet site; specifically our newsletter. Our newsletter is a long tail product. When an issue comes out there is heavy consumption of it then it slows off. I did a quick check of past issues out to six months and all had a long tail. Although an issue was old people are still occasionally downloading it.

If you’re reading this there is a good chance that you too have bought or have products in the long tail but just didn’t realize it.

Reference:

Long Tail Graphic: Anderson, C (October 2004) The Long Tail. Retrieved June 12, 2008 from the World Wide Web.

June 12, 2008 Posted by | Uncategorized | , , , , | Leave a comment